FRANCE. Groupe ADP has announced an eight-year, €8.4 billion investment to upgrade and expand Paris Charles de Gaulle and Orly airports.
The company is proposing an ‘Economic Regulation Agreement’ (ERA), covering the 2027-2034 period, “to provide visibility and stability for all stakeholders”.
This proposal is based on a moderate traffic growth assumption of +1.6% per year on average; creating capacity for 18 million additional passengers a year; cost-saving measures within the regulated scope, with a savings plan target of around €130 million by 2034; a proposed average increase in airport charges based on the Consumer Price Index +2.6 points for the period 2027-2034, proportional to the amount of the investment; plus additional measures.
The company said the backdrop its investment plan is a series of “urgent and demanding challenges”.
These include decarbonising the aviation sector, tackling increased competition between hubs against a backdrop of regulatory and fiscal pressure in France, continuing to develop and support (more moderate) traffic growth, and increasing the attractiveness and distinctiveness of its hubs compared to competitors.
Elaborating, ADP noted a dip in competitiveness among its Paris airports, citing a ten-point decline in connecting traffic at CDG in 2023 compared with 2019 with the airport now ranking seventh worldwide in terms of connectivity (fourth in 2019), behind hubs in the Middle East. The competitiveness of CDG is also being “undermined by rising costs linked to inflation and increased sectoral taxation,” added ADP.
Also, while total traffic growth will moderate to around +1.6% a year, international traffic is expected to grow by an average of +2.7% per year over the period and should account for 56% of traffic at Paris airports in 2034, compared with 51% in 2019.
The group also highlighted a need to modernise infrastructure. The phases ahead will include improving traffic flow and streamlining passenger journeys (2027-2030); boosting existing infrastructure while building the first part of a new satellite to the east of Paris CDG with a 28,000sq m international boarding lounge, plus delivering new infrastructure (to 2034). The last phase will add the second part of the new satellite, noted above, following the demolition of Terminal 2G, alongside new transport connections.
Groupe ADP Chairman & CEO Philippe Pascal said, “The industrial project that we are presenting today is an essential element in guaranteeing that Paris airports develop in a reasoned and sustainable manner. Our goal is to successfully transform Paris airports, decarbonise the sector and increase the competitiveness of the entire airport ecosystem in Paris.
“We see this as our responsibility and our core business. To successfully carry out this transformation, the historic investments – averaging more than €1 billion a year over eight years – would be financed by a new economic regulation agreement.
The draft Agreement presented seeks to strike the right balance between an unprecedented level of investment, the profitability of which is both guaranteed and capped by law, and fees applicable to airlines which, after the proposed increase, will remain in the lower range of fees applied by our competitors.
“It aims to place us firmly in line with our competitors: thanks to our ability to create the conditions for growth and increased efficiency for airlines, and to improve service quality for passengers in a context that requires efficiency to be placed at the heart of development and a fair economic balance between airlines and Groupe ADP.
“In addition to the Economic Regulation Agreement, in 2027, our future strategic plan will embody our long-term vision of value creation across all our activities, so that Groupe ADP can fully assume its role as an economic, social and regional driver of France’s influence.” ✈
