Table of Contents Overview 2 Catalyst 2 Summary 2 Airlines under increasing financial pressure due to competition, regulatory costs and oil price fluctuations 6 Increased competition and rising regulatory costs affecting European and North American airline companies 6 Oil price fluctuations continue to hamper industry 7 Consolidation in the airline industry increasing airport reliance on fewer buyers 9 Strong decline in the number of airlines in Europe and North America 9 Bankruptcies also reducing the number of players 10 Consolidation in the airlines industry is reducing negotiating power of airports 11 Decline in retail revenue also affecting airports negatively 12 Expansion into less mature regions and consolidation between airports required 14 Asia is witnessing an airport boom presenting growth opportunities for European/North American airport groups 14 Major airports will have to continue welcoming low budget airlines 15 Consolidation in the airline industry negatively impacting airports 17 Airports would do well to expand operations to less mature regions and welcome low-cost airlines 17 Appendix 18 Sources 18 Further Reading 19 Ask the analyst 20 About MarketLine 20 Disclaimer 20

List of Tables Table 1: UK Air Passenger Duty Rates, GBP and $, 2015-2019 7 Table 2: Top five airline‟s share at Hartsfield-Jackson Atlanta International Airport, January 2018 9 Table 3: Percentage change in the revenue of Frankfurt Airport and value of German airline industry, 2013-2017 12 Table 4: Largest airlines in Italy in terms of passengers carried, 2016-2017 13List of Figures Figure 1: Average price of crude oil, $ per barrel, and % growth in the global airline industry 2013-2018 7 Figure 2: Monarch Airlines Operating Profit/Loss, $ m, 2012-2016 10 Figure 3: Air Berlin Revenue per Kilometer (RPK), $m, 2012-2016 11 Figure 4: Chinese population in income brackets as % of total population, 2010-2015 14 Figure 5: The under-construction Beijing Daxing Airport 15