ETAG 2015 Conference ‘China in our hands’

Gordon Dewar

Chief Executive, Edinburgh Airport

January 2015

2014 – the most successful year for any Scottish airport

2

5,000

6,000

7,000

8,000

9,000

10,000

11,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2 w

ay p

asse

nge

rs (

00

0s)

EDI total passengers (000s)

Developing connectivity through Partnership

• Partnership is at the heart of everything we do

• Partnership with airlines first and foremost

• Partnership with Scottish agencies

– Transport Scotland

– Visit Scotland

– Scottish Enterprise

– Marketing Edinburgh/City of Edinburgh

3

Operational Partnerships

• New check-in technology

– Technology providers and airlines

• New security technology

– Working with Gatwick and Macdonald Humphrey

• ‘Record breaking’ extension build in 18 months

– Balfour Beatty

• Educational Partnerships

– Napier and Edinburgh Universities for placements, research and Intern projects

4

Lowest/Flexible Capacity Cost

Eliminate Queues Lowest Operating Cost

Remote

On Arrival Common

All 3 elements required together

Our customer approach: Check-in

Ryanair -120 STD opening

6

Ryanair: -180mins STD opening

Our customer approach: Check-in

Our customer approach: Understanding their requirements

7

So, how do we get airlines to come?

• We talk their language…

• Etihad presentation – Detailed business case for why the airline should join us in Edinburgh

8

Source: CAA Passenger Survey 2013. 9

17.6%

15.7%

11.7%

8.2%

5.7%

5.6%

4.1%

3.6%

2.8%

2.7%

2.5%

2.4%

2.3%

2.1%

2.0%

2.0%

1.4%

1.1%

1.1%

1.1%

1.0%

1.0%

1.0%

1.0%

1.0%

EDUCATION

OIL & GAS EXTRACTION

OTHER

COMPUTER CONSULTANCY

RETAIL AND REPAIR

BANKING & FINANCIAL SERVICES

RESEARCH & EXPERIMENTAL DEVEL

AIR TRANSPORTATION

MOTOR VEHICLES 4 WHEELS & PARTS

ACTIVITIES OF ORGANISATIONS

MANAGEMENT, LEGAL, FINANCIAL

ENGINEERING ACTIVITIES

CONSTRUCTION

ELECTRIC, GAS & HOT WATER SUPPLY

HOSPITAL, DENTAL SERVICES

ELECTRICAL COMPONENTS & LIGHTING

PUBLIC SERVICES ACTIVITIES

OPERATION OF SPORTS ARENAS

INSTRUMENTS, MEDICAL EQPMT, OPTIC

MOTOR DEALERS & SERVICE STATIONS

SOCIAL WORK ACTIVITIES

ADVERTISING

WATER TRANSPORTATION

AMUSEMENT & RECREATION

GENERAL SCIENTIFIC

EDI long haul business travel 2013 - by industry

EDUCATION 21%

OIL & GAS EXTRACTION

17%

RETAIL AND REPAIR

13%

SECURITY 11%

CONSTRUCTION 7%

PUBLIC SERVICES

ACTIVITIES 6%

ELECTRIC, GAS, STEAM

& HOT WATER SUPPLY

5%

OTHER 20%

Reason for travel between EDI and Middle East 2013

2009 ranking

4 1

3

8 15 6

22

2009 % share

9.9 13.8

12.3

3.9 2.1 6.7

1.0

Edinburgh’s universities have a global reach

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• Over 24,000 international students study in Edinburgh • Heriot Watt University

• campuses in Dubai and Putrajaya, Malaysia, housing a total of 7,000 students • provides distance learning for a further 12,000 students in 150 countries

• University of Edinburgh • Has international offices in New York, Sao Paulo, Mumbai and Beijing

EDI leakage onto DXB-GLA Emirates service

• 36% of all DXB-GLA passengers were travelling to/from the core EDI catchment

• 146k passengers travelling DXB-GLA are starting/ending their journey in the core EDI catchment

• A DXB-EDI route would expect >180k passengers per year, more than DXB-GLA in its first year of operation

• ME capacity in Central Scotland will shift towards EDI

11 Source: 2013 CAA passenger survey

145,812

180,589

75,939

-

100,000

200,000

300,000

400,000

500,000

GLA- DXB

2 w

ay p

ax

EDI GLA-DXB passenger leakage 2013

Secondary zones

Core GLA catchment

Core EDI catchment

145,812

37,970

37,970

180,589

-

50,000

100,000

150,000

200,000

250,000

EDI GLA

2 w

ay p

ax

An unconstrained market would look like…

Core GLA catchment

Secondary catchment

Core EDI catchment

By S15 EDI capacity to eastern hubs will be similar to GLA

• Despite current growth projections in 2015 EDI still have less capacity to eastern hubs than GLA – Assume QR daily – TK 9 per week for S – EY daily as scheduled – EK remains at double daily

• Analysis of DXB-GLA indicates 36% of market is travelling to/from EDI catchment

• Market capacity is switching to the preferred Scottish destination

12

-

20,000

40,000

60,000

80,000

100,000

120,000

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

2 w

ay c

apac

ity

Central Scotland capacity to eastern hubs Jan-12 to Jul-14 and projections to Aug-15

DXB-GLA IST-EDI DOH-EDI AUH-EDI

Source: CAA airport statistics Jan2012 to July2014, Aug 2014-Aug 2015 EDI projections

EDI share

Indirect flights also used to access the UAE from EDI

• As well as accessing the UAE via EK DXB-GLA service passengers also fly indirectly from EDI

• EDI indirects to DXB 7.3k

• EDI indirects to AUH 2.9k

• 10.2k indirects to DXB/AUH in 2013

• 156.2k passengers travelled

between EDI catchment and DXB/AUH in 2013

13

0

200

400

600

800

1000

1200

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

De

c-1

3

2 w

ay in

dir

ect

s

EDI indirects to DXB and AUH 2013

EDI-DXB indirects EDI-AUH indirects

Source: indirects Beontra B Route Development 2014

EDI catchment passengers using DXB-GLA have a more favourable inbound:outbound mix

• Overall DXB-GLA market is 37:63 Non-UK:UK split

• EDI catchment 43:57 • GLA catchment 36:64 • DXB-EDI core catchment has higher

business mix than the DXB-GLA core catchment market

• Inbound and business passengers

use DXB-GLA to access the core EDI catchment area

14 Source: 2013 CAA passenger survey

14%

8%

25% 39%

4% 10%

EDI catchment of DXB-GLA reason for travel

Non-UK Business

UK Business

Non-UK VFR

UK VFR

Non-UK Leisure

UK Leisure

6% 6%

21%

47%

8%

12%

GLA catchment of DXB-GLA reason for travel

Non-UK Business

UK Business

Non-UK VFR

UK VFR

Non-UK Leisure

UK Leisure

EDI core GLA core

Business 22% 12%

VFR 64% 67%

Leisure 14% 20%

Australia is the most popular onward destination but the EDI catchment has a core market to/from China

• Australia is the most popular onward destination for both catchments

• 18% of EDI catchment onward passengers are travelling to/from China via DXB-GLA – c.19k

15 Source: 2013 CAA passenger survey

37% 18% 8% 6% 5% 4% 23%

Final country EDI catchment DXB-GLA Australia

China

South Africa

New Zealand

Thailand

India

Other

43% 7% 6% 6% 5% 5% 27%

Final country GLA catchment DXB-GLA Australia

India

New Zealand

Thailand

Pakistan

South Africa

Other

Total P2P Onward pax/ k % share pax/ k % share pax/ k

all DXB-GLA 402 23% 92 77% 311

EDI catchment DXB-GLA 145 26% 38 74% 107 GLA catchment DXB-GLA 181 23% 41 77% 140

EDI catchment has a strong Chinese market

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37% 18% 8% 6% 5% 4% 23%

Final country EDI catchment DXB-GLA Australia

China

South Africa

New Zealand

Thailand

India

Other

57%

13%

12%

8% 3%

2% 1%

4%

EDI catchment DXB-GLA top countries of residence

UK

New Zealand

China

Australia

UAE

South Africa

Qatar

Other

Source: 2013 CAA passenger survey

• Almost a fifth of onward EDI catchment passengers are travelling to/from China

• 12% are Chinese residents • Shanghai is the largest destination for EDI catchment followed by Perth,

then Sydney

Final country Residency

Summary

• EDI is the destination of choice for passengers travelling to and from Middle East to Scotland

• 36% of EDI passengers currently travel to Middle East and beyond from GLA – 146k passengers in 2013

– EDI catchment on DXB-GLA is more inbound and business focussed

• Despite current growth projections in 2015 EDI still have less capacity to eastern hubs than GLA

• Excellent hub potential for onward connectivity to Asia and Oceania

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My challenge to you in 2015

• How do we understand better?

– What are we offering new markets that is unique and attention-grabbing?

• China – a real opportunity for us to sell Edinburgh and Scotland as a destination

– ETAG Chinese working group? Help us identify any potential projects we can work on together?

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