Munich Airport

Integrated Report 2022




Economic and industry-specific conditions

At this time, global economic developments are dominated by the war in Ukraine and the impact of the receding coronavirus pandemic. Economic activity is declining worldwide, both in industrial nations and in the emerging economies. High energy and commodity prices, along with disrupted international supply chains, hinder production and drive up inflation rates. As a result, real disposable incomes have declined. High economic uncertainty and rising interest rates in many parts of the world have a negative effect on investment activity. Therefore the outlook for global economic growth is subdued. The ifo Institute forecasts economic growth of 1.6% and 2.6% for 2023 and 2024, respectively. 21)

According to the ifo Institute’s forecast, economic output in industrialized nations is likely to expand at a rate of 0.7% in 2023. Weak GDP growth of 0.9% is expected for the USA. In the UK, the economy is actually expected to shrink by 0.9 % in 2023. Both countries are fighting high inflation. This has a negative effect on private consumption, while corporate investments are hindered by higher interest rates. 21)

According to the forecast, the emerging markets group will achieve overall economic growth of 3.5% in 2023. The Chinese economy is expected to grow at a rate of only 4.5% in 2023. China’s strict zero covid policy has had a negative effect on the country’s economy for some time. After the Chinese government ended most of the pandemic measures in December 2022, economic growth was inhibited by high sick leave numbers. Moreover, the situation in the Chinese real estate market remains tense and the export business is declining. The Indian economy is characterized by relatively high inflation and a struggling industrial production sector. Accordingly, the projected 2023 growth rate of 4.9% is slightly below average. 22)

In the euro zone, economic output is expected to grow by 0.6% in 2023. Economic performance is inhibited by supply shortages, higher energy prices and pronounced economic uncertainty. High inflation rates and producer prices put pressure on private consumption and industry. In addition, a cooling global economy also reduces demand from abroad. The effect on euro zone countries varies depending on the dependence on Russian energy supplies and national economic structures. The ifo Institute expects GDP in France to grow by 0.6% in 2023. For Italy and Spain, growth rates of 0.4% and 1.7%, respectively, have been forecast. 23)

According to the forecast, the German economy will expand by 0.1% in 2023. Due to the high proportion of industry, the economic situation in the Federal Republic is particularly vulnerable to supply shortages and higher energy prices. With the introduction of the electricity and gas price «brake», the federal government has already taken measures to lessen the impact of energy costs on private households and companies. Furthermore, the German economy is also suffering from a growing shortage of skilled labor. Inflation is at a historic high, and a rate of 6.4% is forecast for 2023 (2022: 7.8%). In 2024, consumer price inflation should normalize at a rate of 2.8%. The resulting decline in disposable real incomes will have a decidedly negative effect on private consumption, particularly in the six winter months 2022/2023. The construction sector is also expected to continue to cool due to higher interest rates and higher construction costs. Production activities in the industrial sector will continue to expand at a moderate pace, thanks to a high volume of orders on hand. A large expansion will probably occur as the supply shortages gradually fade into the background. The unemployment rate is expected to grow moderately by 0.2% to 5.5%. 23)

The oil price (Brent) increased significantly in 2022 compared to the previous year. In 2022, the annual average oil price was $99.1 per barrel (2021: $70.7 per barrel). The ifo Institute expects that the oil price will fall to $85.5 per barrel in 2023. 23)

The demographic and economic general conditions in Bavaria and especially in the airport catchment area mean that further strong growth in transportation demand can be expected at Munich in the medium to long term despite short-term slumps. According to the results of the regionalized population projection by the Bavarian State Statistical Office, Bavaria’s population will grow by 5.4% by 2041 compared to 2021. A strong to very strong population increase is expected in the Munich region in particular. In the state capital of Munich, the figure is expected to be +7.3%; the rural district of Munich is likely to increase by 6.1%. Four of the fastest-growing districts are also located in the nearby catchment area of Munich Airport. Growth of 12.2% and 11.5% is forecast for the districts of Ebersberg and Dachau, respectively, and 12.4% and 13.2% for the districts of Pfaffenhofen a. d. Ilm and Landshut, respectively. 24)

Compared to other industry sectors, the global aviation market is suffering more severely from the coronavirus pandemic. But most of the global travel restrictions have now been lifted. This should lead to a general recovery in 2023. IATA expects that global passenger demand in 2023 will reach 85.5% of the level seen in 2019. Airline revenues are actually projected to reach 93% of the pre-pandemic level. 25)


Forecast course of business

The aviation industry is still affected by the effects from the coronavirus pandemic and the war in Ukraine. Nevertheless, Munich Airport expects a continuous recovery trend in 2023, following the positive development of travel demand in 2021 and 2022. In 2023, the Group is currently expecting passenger numbers to increase by around a third compared to the previous year. The expected passenger volume is thus more than 80% of the pre-crisis level in 2019. However, this assumption remains highly uncertain and depends heavily on whether the coronavirus pandemic continues to recede (or makes another appearance), as well as the developments in the Ukraine conflict. If these crises escalate again, it would implicate negative effects on business performance, the earnings situation and all key financial figures in the Group.

Munich Airport assumes that the impact of the coronavirus crisis and the Ukraine conflict will continue to have a lasting effect on the Group’s economic development in all business units in 2023. Besides the lower passenger volumes compared to the years before the crisis, there are also a series of macroeconomic trends that continue to have an effect in this regard. Disrupted supply chains, continued high inflation and rising interest rates, high energy costs as a result of the energy crisis, as well as a tense labor market situation continue to affect the results of operations, assets, and financial position.

Depending on the further course of the various crises, deviations from the following forecast are possible.

With regard to revenue from airport charges, the Executive Board assumes an increase in line with the development of traffic.

It is expected that the revenues in the retail segment will grow disproportionately to the recovery in traffic as wealthy customers continue to return.

Revenue from catering and hotels as well as from handling operations, parking and advertising is assumed to grow at a slightly lower rate than growth in air traffic.

Revenues from rentals and leases are expected to be slightly positive compared with 2022.

Other revenues, which include throughput charges for aviation fuel supply, revenues for utilities and fuel, and revenue from management, consulting and training services for the aviation industry, develop significantly less than traffic growth, but also depend on it only to a limited extent. One exception are the revenues for utilities and fuel, which have almost doubled due to increased airport operations and positive price effects.

In total, management expects revenues to grow by a quarter compared to 2022.

Overall, the cost of materials is expected to increase at a slightly higher rate than revenues. This development is mainly due to much higher expenditures for energy and utility services, and fuels. Similarly, in the gastronomy and retail segment, the cost of sales is also increasing due to rising passenger volumes. The maintenance and remodeling measures included in the cost of materials will also increase due to the catch-up effects from the crisis years.

Personnel expenses in the Group will increase at a moderate pace - mainly because of the higher number of employees, as well as rate hikes and wage increases. Moreover, the removal of short-time work in 2023 also has an effect (as compared to 2022).

Other expenses are also expected to rise as business picks up.

Depreciation and amortization will decrease due to asset impairments recognized in 2022.

The financial result is expected to deteriorate due to the annual compounding effects in connection with financial liabilities from interests in partnerships. Steadily increasing interest rates for new loans and variable interest loans also have an effect.

Because of the big increases on the expense side, which cannot be easily addressed with countermeasures, Munich Airport anticipates another negative earnings before taxes (EBT) for the 2023 fiscal year, despite the significant increase in revenues.

The Executive Board is making significant efforts to secure the Group’s liquidity and create additional financial flexibility. This will be achieved through cuts in all operating expenses and investments. For example, construction projects that are not operationally necessary or strategically relevant are postponed into the future. Management remains committed to strategic projects such as the pier in Terminal 1 and LabCampus.

Munich Airport is in constant contact with its principal banks regarding any liquidity requirements that may arise. During the course of 2023, the traffic, earnings and liquidity forecast will be continuously updated and the financing requirements will be derived. This ensures that the Group has the necessary liquidity at all times.

The anticipated liquidity depletion assumes that the implemented measures for expenses, investments and personnel are implemented, and that air traffic recovers and reaches the expected level. If these assumptions do not come to pass in the manner outlined, this may lead to an increased liquidity demand and consequently to earlier consumption of the existing liquidity reserves. From its current perspective, Munich Airport will be able to cover any higher liquidity requirements on the capital market.

Projected major financial and non-financial key performance indicators:

Projected major financial and non-financial key performance indicators

   in %in %
EBT [in TEUR]–65,358Increase10.030.0
Carbon reductions (in tonnes) 1)3,216Decrease–38.0–33.0
Passenger Experience Index Overall Satisfaction80.4Unchanged  
Lost Time Incident Frequency (LTIF) 2)19.9Decrease0.02.0
  1. Depending on the data basis, the savings are determined on the basis of measurements, product data sheets or performance data on nameplates and documented in the CO₂ database. In exceptional cases, experience values of comparable measures that have already been completed and verified are used.
  2. Applies to FMG and AE; 2019 (LTIF: 21.96) was used as the reference period.

Earnings before taxes (EBT)
Overall, Munich Airport expects EBT to improve significantly, but still to be negative. Exact developments will mainly depend on the future progress and the impact of the coronavirus pandemic and the Ukraine war, therefore they are difficult to estimate at present. This means that in 2023, Munich Airport will again remain below its pre-crisis level.


Carbon reductions
Compared to the reporting year, Carbon reductions are expected to decline to approximately 2000 tonnes in the 2023 fiscal year. The planned measures should primarily reduce the energy requirement for lighting and air conditioning technology.


Passenger Experience Index (PEI)
The forecast value for the Passenger Experience Index (PEI) for 2023 is set at the level of 2022 (over 80), as the impact of the ongoing coronavirus pandemic on PEI cannot be determined at this time.


Lost Time Incident Frequency Rate (LTIF)
Due to the current coronavirus situation and its impact on air traffic, the current trend in the Lost Time Incident Frequency (LTIF) is difficult to predict. The forecast of accident numbers for 2023 is based on the forecast hours worked in 2023. This assumes a 2% improvement in LTIF.

To achieve this goal, measures are planned to minimize the potential impact on accident occurrence. The project to strengthen the occupational safety culture at AE Munich will be continued as soon as possible. The aim is to reduce occupational accidents by ensuring safe behavior in the workplace. In addition, work organization at FMG and AE Munich is analyzed in dialogue with managers, with a focus on accident occurrence/reduction and risk assessments, and optimized where necessary.

  1. ifo Institute, Economic Forecast Winter 2022, December 2022; German Council of Economic Experts, Annual Report 2022/23 November 2022
  2. ifo Institute, Economic Forecast Winter 2022, December 2022; German Council of Economic Experts, Annual Report 2022/23 November 2022;; 22 December 2022
  3. ifo Institute, Economic Forecast Winter 2022, December 2022
  4. Bavarian State Statistical Office, Regionalized Population Projection for Bavaria to 2041, January 2023
  5. IATA, 2023 to bring further pax recovery but softer cargo, 16 December 2022; IATA, Press Release No: 56, 6 December 2022
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