The company states what significance aspects of sustainability have for added value and how deep in the value chain the sustainability criteria are verified.
Munich Airport does not have a conventional supply chain, but procures a wide range of products and services needed to operate an international hub airport. The range of essential products are comparable to the requirements of a small town: The 139 product groups range from things like office supplies and road construction to vehicles and buildings. In 2018, the total procurement volume1)
of the Munich Airport Group amounted to around 750 million euros. All procurement by specialist areas and subsidiaries is handled by the central Group-wide product group management system. Only the merchandise, food & beverage, and medical equipment product groups are procured directly from subsidiaries. FMG takes sustainability criteria into account throughout its entire value-added chain
. Its main focus is the area of procurement. When issuing calls for tenders for services, it always adheres to national and EU legislation and treaties, the application of which is then confirmed again when the offers are submitted. The purchasing policies contain precise sustainability criteria, while adherence to competition requirements is monitored by the in-house Compliance division. As part of its supplier management process
, FMG conducts annual assessments of around 150 partners under framework agreements. In 2018, suppliers were again evaluated on the basis of such criteria as product quality or the quality of the service provided, reliability, and developments in terms of services and pricing, as well as whether companies were certified in accordance with quality and environmental standards. In the event of poor outcomes, the suppliers are given the opportunity to eliminate existing deficiencies in supplier audits. FMG’s current supplier structure allows regional economic cycles
to be strengthened, traffic emissions lowered, and the risk of violation of human rights reduced.
Around 5,100 suppliers work for the Munich Airport Group.The supplier structure during 2018 was relatively consistent with the previous year. 98 percent of the procurement volume of the airport went to companies headquartered in Germany. Of these, 61 percent are from Bavaria, and 38 percent are from Munich and the area surrounding the airport.
Munich Airport has regional economic impact at a number of different levels. A basic distinction is made between the effects resulting directly from airport operations on the one hand and the effects of its use on the other.
Further information: Value creation
1) Figures relate to the total procurement volume of the Munich Airport Group in 2018. Value-added effects resulting from airport operation
The value-added effects generated by airport operations can be categorized into direct, indirect, and induced effects.
- Direct effects: All value created by Munich Airport’s economic activities. The direct value created is used to pay salaries and wages.
- Indirect effects: The sum of all effects in a region, which are generated by the supplier and service relationships of the companies at Munich Airport.
- Induced effects: Economic activities with a value-added effect in the region, which are generated by purchases made using income at Munich Airport.Munich Airport takes account of all stakeholder groups from the outset in its corporate strategy in order to ensure sustainable value creation. As part of its day-to-day business, it influences a wide array of stakeholders, and internal and external factors. In order to present these qualitative and quantitative interactions of the business model, Munich Airport has defined for itself six forms of capital of the IIRC. These six forms of capital are a key baseline in the four business units Aviation, Commercial Activities, Real Estate and Participations, and Services & External Business for generating new values (contribution to value creation). FMG takes key sustainability criteria into account throughout its entire value-added chain. The strategic starting point for all of FMG’s sustainability measures within value creation is the concept of holistically sustainable operation, which is based on the following fundamental pillars:
Solid funding forms the basis for a company’s long-term earnings power, profitability, and financial stability. Munich Airport obtains financial capital from operating cash flow from its business activities and from loans. Infrastructure: The wide range of services offered by Munich Airport is reliant on building and transport infrastructure that works and that taps into and makes the most of existing space. Servicing, maintenance, and needs-based expansions are FMG’s key parameters for ensuring that the airport campus remains attractive.
As the operator of a major piece of infrastructure, Munich Airport is aware of its responsibility to the environment. The aim is to keep our impact on nature and the environment to a minimum, for the sake of future generations as much as for own. Key issues include aircraft noise, air pollutants, climate protection, water and waste management, and the protection of nature and species.
FMG has acquired a great deal of expertise – covering areas such as the value of a brand; the technical, process-based, and organizational knowledge called upon in consultancy projects worldwide; and copyrights for airport software and in-house developments. And Munich Airport will continue to enhance its business further in the future. Innovations are an essential part of this.
Good cooperation with the region is essential if Munich Airport is to succeed, with open and honest dialog with the surrounding communities playing a key role. As well as being a major employer, an engine for the economy, and a gateway to the world, FMG’s daily challenge is to be a responsible neighbor – in an open dialog and with commitment to the region. The Group cultivates long-term, mutual relationships with key stakeholders in its bid to generate a feeling of trust and acceptance in the society around the airport.
Employees are critical for the success of a company. With this in mind, the airport is well aware of its special responsibility as an employer. In order to live up to its obligations in this respect, Munich Airport also places a lot of emphasis on having a modern and effective human resources policy devised with people and business needs in mind. The airport offers its employees an array of opportunities and a diverse range of tasks in an exciting environment.
Contribution to value creation 2018
Different products and services are generated (output) in the four business units. The value-added process is based on six forms of capital (input), which the airport uses to generate new values. This is the basis for the next fiscal year (outcome).
The overriding objective is to ensure the economic and sustainable business activity of the airport. However, the airport is also aware of the negative effects that its business may have, and is making targeted efforts to avoid these, keep them to a minimum and, where required, compensate for them. Munich Airport pursues a corporate strategy that focuses on sustainable value creation, which takes account of the entire value-added chain. It has launched an array of projects to make sure all of its stakeholders will benefit wherever possible and to protect its position as a global leader.
The business model is described in detail here: Business model