ADP CEO launches big 2016-20 strategic plan
By Doug Newhouse |
Apart from providing more support for ‘high-performing airlines, Aéroports de Paris is planning major and ongoing improvements in retail, real estate and all additional growth drivers, according to Chairman and CEO Augustin de Romanet.
He recently unveiled ADP’s strategic plan for 2016-2020 called ‘Connect 2020’ to the financial sector, following the signing of the Economic Regulation Agreement with the French Government which forms the basis of ADP’s strategy. [The French state owns 50.6% of ADP today-Ed].
Significantly, at the head of this strategy is a programme to improve the hub performance of CDG as a hub and amend and redistribute costs to make long haul traffic for airlines more competitive for airlines using Paris airports. [This comes in the wake of recent threatened cuts to long-haul flights by Air France-Ed].
Commenting on this initiative, Augustin de Romanet said: “Up until now, we put long-haul flights in an unfair position which we are going to do away with. Secondly, we are going to support high-performing airlines. An airline which has fast turnarounds, bases its aircraft at our airports and flies out early in the morning and returns early evening with more flight routes is going to get our support.
“We are also going to optimize the Paris-Charles de Gaulle Hub, as I pointed out, by investing in linking satellites and terminals under one roof. And last but not least, the key element of quality of service. Under the ‘Connect 2020’ plan, we have set for ourselves far-reaching quality of service goals to become a European hub frontrunner.”
Augustin de Romanet added that he hopes these initiatives will help ADP’s international activities to become the group’s third most important business line.
He said: “Therefore assuming growth in passenger traffic of approximately 2.5% per year, we should reach EBITDA growth of 30-40% between 2014 and 2020. We should be able to maintain a dividend payout ratio of 60%. All of this will be backed by our €4.6bn ($5.2bn) investment programme in the regulated scope, as well in retail and real estate over the period.”
At the same time, de Romanet confirmed his belief that there is still ‘enormous growth potential’ in ADP’s retail activities: “ADP is a retail success story. During our IPO in 2006, the average sales per passenger in airside area was €9.80 ($11.18) and is currently – or rather in 2014 – it was €18.30 ($20.88).
“We count on capitalising on three components. The first is continuing to cultivate the ultimate passenger experience by improving the offering, expanding the surface and selecting the products that we sell on each transport network.
“Secondly, we need to build up the reputation of ADP pre-boarding retail shops. This means attracting clients from their departure hall. Finally, by optimising our management practices, such as creating joint ventures, we are better positioned to oversee the management and ensure consistent quality of service.
“We have already done so for newsagents with Relay@ADP and for advertising with JC Decaux. We are going to enter into one with SSP for bars and restaurants. It’s a model that will continue to deliver results.”
Concluding, while looking forward, de Romanet said: “I hope that ADP in 2020 will be a well-established brand recognised for its quality of service. A brand is promise: I promise you a level of service and I deliver it.
“I hope that this promise is embodied at Paris-Charles de Gaulle, Paris-Le Bourget and Paris-Orly, marked by outstanding quality of service. I hope that it also reflected abroad in our airport design, construction and operation. I want a French Touch or a Paris Airport Touch in everything we do.”
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