1. BUSINESS PLAN January - December 2007
PUBLIC ENTERPRISE FOR AIRPORT SERVICES “MACEDONIA” - SKOPJE
BUSINESS PLAN
January - December 2007

2. Contents Introduction notes Planed global activities Regulative
Planed business activities in basic operative frames - air traffic at the Airports
Planned business in commercial activities at Airport “Alexander the Great” and Airport “St. Paul the Apostle” and General Directorate

3. Contents
Planned business activities of other Departments at Airport “Alexander the Great” - Skopje and Airport “St. Paul the Apostle - Ohrid
Planned business activities at PEAS “Macedonia”
Finance plan
Revenues
Expenses
Expected results

4. Vision

5. Objectives and purpose
Air traffic is the one of the most important resources of the worldwide economy. Developing as industry, technology and service is one of the greatest contributions of the modern society.
Airports are the main component of the air traffic industry that is uniting development of the business and tourism.
Thereupon with their development, airports are increasing economy of the country and they have key part in development of the air traffic and economy in the region.

6. Objectives and purpose
Existing of the two international airports in Macedonia at level of technical and operative function are suffice of the current state needs and it is a right basic for defining a new phase of development and building up of these two airports by
Long term Project Task and
Following instructions and recommendations by the Government of the Republic of Macedonia, meaning Ministry of Transport and Communications, as well as recommendations of technical support for transport and management by the Air Euro Safe

7. Defining Development Concept
Model of public enterprise according to the new regulation and it’s transformation in join stock company,
Concept of developing the runway up to III category,
Multiply of traffic operative surfaces,
Building up and modernization of the terminal up to “C” category (IATA standards),

8. Defining Development Concept
Facilities for airline companies, rent-a-car, etc,
Cargo center with container transport,
Floor garage,
Hotel,
Building up the trade zones etc.

9. Accomplishment of purposes
Studies for economy warrant of the investments
Master plan
Investment program
Study recommending best model for development of Airport “Alexander the Great” and Airport “St. Paul the Apostle”

10. Global Activities

11. Mission Statement
Primary mission of PEAS “Macedonia” in year 2007 will be:
Providing higher level of quality services at the Airports,
Fast and dynamic development,
Increasing of security, safety and concurrency in the region.

12. Key to success
Planed working activities of PEAS “Macedonia” in 2007 are based on
realized traffic and results from the past 2 (two) years
the real air traffic forecasts and commercial activities for year 2007 and takeover of runways from CAA are taken in to consideration.

13. Planned Postulates
Increasing the traffic at Airport “Alexander the Great” and Airport “St. Paul the Apostle”::
number of operations up to 3,3%,
number of passengers up to 4,5% and
tonnage of cargo shipments up to 8,9%
Increasing the revenues from made activities (aeronautical revenues, commercial revenues, and other revenues) up to 11,07%

14. Planned Postulates
Transformation of PEAS “Macedonia” in to join stock company under government authority;
new statute will be prepared
territorial issue will be regulated and
percentage value of Public Enterprise’s capital will be entered in the PEAS “Macedonia” register books.
Public enterprise actively participates in International tender of creating a consultant team for preparing Study with model for development of Airports.

15. Planned Postulates
Program that includes all necessary investments in Airport “Alexander the Great” and Airport “St. Paul the Apostle” for
Equipping both airports with new specialized vehicles for winter service, handling, rescue and fire fighting, security, sanitary services;
Improving the electrical systems, set power units, heating and cooling, telephony, protection from birds, purify and water supply, X-Ray as well as improving the personnel working and self-protection uniforms.
Progressions in IT check-in passengers, announcing the flights and advancement in advertising billboards and lighting system.

16. Planned Postulates
Building up passenger terminal at Airport “Alexander the Great”- Skopje in first two phases (five in total)
With international tender that will put up the handling services in terminal at level “C”, which will be increased up to 1,5 million passengers
In addition, existing terminal and outbuilding of Administrative - technical building, police, companies and customs are included
Financial construction will be supplied 40% from own resources, and rest of the funds will be supplied from bank credits. Construction will be in phases with dynamic plan for several years.

17. Planned Postulates
During year 2007 announcement of international tender for project and realization of Airport Terminal (I phase, refresh of existing building) is planned.
Enterprise’s basic activities (non aeronautical services)
will be appointed to increase marketing level of present and development of the new effect following the example of modern airports in the region and abroad.

18. Planned Postulates
Improving the general efficiency, as a measure of total success in the enterprise’s economy.
Will be separate program index towards to rational usage of disposable resources and peak of usage effects.
Outsourcing politics in part of catering, parking, VIP and CIP, Free Shop, security, exchange office and sanitary.
Improving operating and organization efficiency using the experience of already approved projects in this area.

19. BACKGROUND

20. Ownership
Currently with Airport “Alexander the Great” and Airport “St. Paul the Apostle” is managing Public Enterprise for Airport Services “Macedonia”-Skopje.
PEAS “Macedonia”- Skopje is an enterprise established by Government of Republic of Macedonia with 100% government ownership.

21. Activities
Basic activity of this Public enterprise (PE) is handling aircrafts, passengers, baggage, goods and mail; operating on both airports “Alexander the Great” and “St. Paul the Apostle”.
Besides basic activities, Public enterprise is performing additional commercial activities that are usually performing at the airports:
managing free shops, catering restaurants, leasing business and advertising premises, parking areas, VIP and CIP salons, exchange offices etc.

22. Management
Board of Directors are managing Enterprise, authorized by the Government of the Republic of Macedonia, under leadership of Director elected by the same Board of Directors, according to made changes in the Law on Public Enterprises.
In the process is transformation of the Public enterprise in Join Stock Company with government ownership, and when this procedure is finished enterprise will be functioning according to Company Law.

23. LEGISLATIVE

24. Domestic Legislative
Aviation Law; Law on Public Enterprise; Law on Public Procurement; Customs Law, Collective agreement and Law on labor relations and Company Law.
Regulations and Rulebooks:
Regulations on safety and security of the airport,
Rulebooks on airports and other regulations.

25. International Legislation
International rules and recommendation in the area of air traffic that address civil aviation administration:
ICAO
IATA and
Required Standard agreements on loan services (SGHA).

26. International Legislation
Following implications will proceed in the Assembly with ratification of Common European Aviation Area Agreement:
Liberalization process, increasing flight frequency of the regular airline carrier and opportunity of attracting new airline carriers.
Corrections will be in the part of Agreement’s clause between Government of Republic of Macedonia and MAT- Macedonian Airlines. When regulation come into force, above-mentioned Agreement must be discontinued or must be put in order with law and regulation of the Europe Union, according to Protocol. Influence of law cost carrier
Aim of PEAS “Macedonia” in 2007 year will be attracting law cost carriers, which will help increase revenues from the primary operations

27. PLANED BUSINESS ACTIVITIES
IN THE AIR TRAFFIC

28. Aeronautical Services
PEAS “Macedonia” is planning
operations during 2007 year
which is growth of 3,3% comparing to year 2006;
passengers will be transported
which is growth of 4,5% comparing to passenger traffic from previous year
2.570 tonnes cargo and mail will be also transported
that will be growth of 8,9% comparing to year 2006.

29. Traffic forecast

30. Forecast Factors
Traffic statistics data of Airport “Alexander the Great”;
Growth of traffic in percent compared with 2004/2005 and first 10 month of 2006;
General information of traffic growth - in the world, Europe and in the region (from ACI reports)
Methodology forecast of development feasibility study for “Alexander the Great” from Scot Wilson,

31. Forecast Factors
According to real economy growth of domestic Market, traveling requests with air traffic transportation are increased.
Progress in carriers services, increasing number of carriers, or expending present frequencies.
Variable growth of traveling requests due to liberalization of administrative regulations (alleviation during visa procedures, “open sky”, etc.)

32. Traffic Departement – “Alexander The Great”- Skopje

33. Traffic Departement – “Alexander The Great”- Skopje
Handling of aircrafts in commercial aviation.
Handling of 990 aircrafts in noncommercial aviation (general and military aviation).
Handling of incoming passengers.
Handling of outgoing passengers.
Handling of transit passengers.
Handling of transfer passengers.
Handling and processing of tonnes baggage in arrival and departure.

34. Operative Department
Summer schedule flights S`07 and winter schedule flights W`07/08, as well as weekly schedule flights are preparing in annual working plan.
Operative pursuing and recording of traffic will be weekly done.
Annual report for realized traffic in year 2007 will be prepared until end of January 2007 and it will be print like almanac.

35. Operative Department
Monthly reports of realized traffic at Airport “Alexander the Great” and PEAS “Macedonia” will be prepared till middle of next month and it will be proceed to
Ministry of Transport and Communications, Institution Statistics of Republic of Macedonia, ACI (Airport Council International), ICAO (International Civil Aviation Organization) and others.

36. Protocol Service
Working flow in Protocol service usually depends on magnitude of international politics and economy activity in our country.
Due to new resolutions for foreign economic investments in our country, meaning more domestic and foreign business travels in year 2007, are expected.

37. Protocol Service
Improving and developing of working procedures, as well as interior and technological equipping of VIP and CIP salons is planning during 2007.
According to international experiences and needed trends of CIP passengers, these salons technologically will be equipped and following procurement will be done:
new VIP vehicle
new furnishing in CIP (Audio system, TV, internet, Free shop)
CIP change of PP pricelist, CIP club card, etc.

38. Training Center
According to CAA, ICAO and IATA program, annual plan for year 2007 includes education of personnel, meaning professional training of employees in Traffic Department at Airport “Alexander the Great”.
Own Training Centre that will expand activities in the other departments and services is planned to be opened.

39. Cargo Center at Airport “Alexander The Great” - Skopje
Reconstruction and modernization of Cargo center facilities:
Providing separate warehouse for handling and processing of special cargo (provide handling and processing conditions for special cargo and storage in appropriate facilities. Radioactive materials with low radiation, dangerous goods, live animals, valuable and frozen cargo etc. according to IATA standards).

40. Cargo Center at Airport “Alexander The Great” - Skopje
Reconstruction and modernization of Cargo center facilities:
Providing separate room for storage of domestic goods,
Connecting Cargo center warehouses.
Dislocating of existing facilities of Cargo center, while renovating, and temporary locating of new modules.

41. Cargo Center at Airport “Alexander The Great” - Skopje
Reconstruction and modernization of Cargo center facilities:
Building up new working premises in Cargo center for Cargo Department purposes, Customs purposes, shipping representatives, delivery express etc.
Reparation of present import and export hangars
Preparation for handling and processing of ULD containers.

42. Cargo Center at Airport “Alexander The Great” - Skopje
Modernization of facilities in the Cargo center:
Providing new software solution for running of Cargo Center and installation of scan system for shipments and AWB (bar code);
Supplying new computer equipment;
Computer register of accepted and storage shipments and pursuing of delivered shipments provided by PEAS “Macedonia” web site

43. Cargo Center at Airport “Alexander The Great” - Skopje
Presentation and affirmation abroad of Cargo center services:
Presentation of new Cargo center services
Presentation of new price politics
Preparing strategy for attracting new domestic and foreign shipping and transport firms
Participation of Cargo center in the affirmation part, providing services and branding of delivery express
Providing special conditions for possible cooperation with Free economy zone

44. Cargo Center at Airport “Alexander The Great” - Skopje
Activities in Cargo center related to human recourses:
Professional edification of Cargo center employees with
providing professional literature and forming small library regarding to cargo traffic, as well as
professional training of employees with course attendance, helping them to get an appropriate certification and opportunities for knowledge refreshment

45. Cargo Center at Airport “Alexander The Great” - Skopje
Activities in Cargo center related to human recourses:
Organizing attendance of seminars and getting advices helping them to bring closer EU and IATA standards
Visiting International airports and their cargo centers so further cooperation will be more successful, getting new experiences and opportunity for implementing them in practice

46. Cargo Center at Airport “Alexander The Great” - Skopje
Activities in Cargo center related to human recourses:
Define and increase employee’s responsibility, motivation and stimulation, or appropriate sanctioning is necessary in Cargo center through implementing procedures related to Traffic department, meaning handling service, so cooperation between them will be successful.
Implementation of new, simplified procedures provided with new Customs Law of Republic of Macedonia, Europe Union and IATA
Supplying new Personnel Protective Equipment

47. Cargo Center at Airport “Alexander The Great” - Skopje
Activities related to Veterinary Directorate cooperation, regarding to Phytosanitary and Veterinary Border Control
Building of phytosanitary and veterinary station financed by EU.
One part of the activities will be in year 2008, according to realization of Investment program.
With realization of the planned activities Cargo center is expecting to be closer to EU regulations, international conventions and IATA.

48. Traffic Department “St. Paul the Apostle” - Ohrid

49. Traffic Department at Airport “St. Paul the Apostle” - Ohrid
Handling and processing of 480 aircraft in the commercial aviation;
Handling and processing of 70 aircraft in the general aviation;
incoming passengers in terminal;
outgoing passengers in terminal;
Handling of transit passengers;
Handling of tonnes baggage;
Handling of 20 tonnes of Cargo & Mail.

50. Cargo Center - Ohrid
Increasing commercial revenues according to services & taken activities:
Aims of taken measures that will increase revenues should be group of small and medium stage companies that gravitate towards Airport “St. Paul the Apostle”.
Acquisition and presentation of transport conditions for export and import goods;
Marketing contact with potential clients via , TV reports, flyers;
Maximum utilization of present infrastructure - storage facilities, transport vehicle.

51. Planned Business Activities From Commercial & Other Services

52. Non Aeronautical Services
Non Aeronautical Services will be direct towards promoting of present and developing of new contents following the example of modern airports in the region and abroad.
In the Scot Wilson (2004 year) Study it is point out that revenues from the non aeronautical services, nominal and per passenger, are not appropriate developed.

53. Non Aeronautical Services
However, increasing level of 20% at free shops, store, advertising and parking is planning with expanding of traffic capacity and infrastructure.
Changes of these revenues can be making in outsourcing catering, parking, free shop and other, so stimulating part will be successful fee.

54. Commercial and marketing department in PEAS “Macedonia”
Enlarging list of client using advertising facilities so present capacity of business premises will be maximum utilized;
At the same time Airports will be supplied with all necessary materials, spare parts, inventory and goods for further selling, on time, in the most economical and quality way. Furthermore, this sector will be realizing resolutions from the Committee on Public Procurement, related to procurement, prices, agreed goods quantity and quality.

55. Commercial and marketing department in PEAS “Macedonia”
Attracting airline companies which are not operating at Airport “Alexander the Great” in Skopje and Airport “St. Paul the Apostle” in Ohrid;
Opportunities of usage shipping advantages, capability of catering service, specific accommodations (VIP, CIP and business salon) at Airport “Alexander the Great” in Skopje will be promote in public.

56. Commercial and marketing department in PEAS “Macedonia”
Catering Service - Airport “Alexander the Great” - Skopje:
Improving will be according to HASAP standards
larger offer of airline companies and other subjects,
outsourcing and other.
Catering Service - Airport “St. Paul the Apostle” - Ohrid:
Larger revenues from catering meals and beverages and other catering services, after constructing a buffet out of airport building, buffet in the exiting terminal & business salon.

57. Safety and Security Department
Safety and Security department with
Fire Fighting and Rescue,
Anti diversion Protection,
Security Protection and
Medical services have to provide fire fighting and rescue security of air traffic devices and installations at Airport “Alexander the Great” in Skopje, as well as operative - technical security, anti diversion protection and medical support.

58. Safety and Security Department
In Anti diversion Protection part, whole certification according to Basic and Refreshment training is planning.
Equipping and modernization of anti diversion protection devices are also included in the plan.
In the Training center, better education and training in all security segments is taking into consideration, so for that purpose special personnel will be create and will be train.
Attention will be at quality of security services, cooperation with authorities according to their warranties in aviation security.

59. Maintaining Department
In 2007, Airport “Alexander the Great” within electrical, machine-constructing maintaining, parking, winter service, sanitary and horticulture services will prevent current and investment maintaining the existing facilities and equipment.
During 2007 in department’s frame, activities for regular and secure traffic operations in winter conditions will be taking. In addition, radio links and telephone network at the airport constantly will be maintaining.

60. Maintaining Department
Planned activities:
Renovation of parking fleet through operative leasing,
construction of new wastewater treatment plant,
resolving sanitary problem with water,
procurement of necessary airport equipment, and other.

61. PEAS “Macedonia” Directorate
Planned Business Activities

62. Finance Department
During 2007, finance department will finish begun processes with implementation of international accounting standards.
After Grant Thorthon estate is estimate, Finance department will proceed according to decision & conclusions from the ongoing audit.
Issue of special engage will be rationalization of the constant cost structure. Costs according to places and organs will be review and compared to experiences of the similar regional and other airports.

63. Finance Department
Although general finance situation will be determinate from the realized aeronautical and other services, finance politic will be creating according to finance principle and rules of financing. From the business aspect enterprise and it`s positive financial status, based on keeping the term structure of resources and liquidation sources, improving the capital structure and financing the development from own finance potential strategy, tactic of finance managing will be developed.

64. Finance Department
Professional analyzes of financial state and structure, according to international standards and rules conception of financial strategy and financial politics, is in process, and it will be present in front of the managing structures of the enterprise.
Financial department will be working on methodology of rewarding the employees, according to invested labor, so flat or variable part will be pay off and that will be a way to stimulate each employee.

65. Finance Department
Separately will be treated and deliberated basic economical principles:
Productivity issue as a measure for progress (showed qualitatively and quantitatively) related to put effort in the given time period;
Economical issue as a measure of put effort related to complete investments in given period;
Profitability issue as a measure for maximizing the long term profit compared to engaged capital.

66. Department for Legal, Personnel and Mutual work
Participation in Public enterprise transformation into join stock company with government ownership;
According to regulation modifications and other general acts, new statute is preparing;
Business procedures with adequate working strategy for human recourses;
Analyze of current company running; define of methods and procedures that should be example for developing of overall organizational and operative enterprise managing.

67. Department for Legal, Personnel and Mutual work
Manager contract for the managing teams will be prepared withal transformation in Joint Stock Company
New Rulebook for organization & systema-tization of the Public Enterprise will pass
Besides authorization given by General Manager of PEAS for representing the enterprise at courts, department will take over and resolve all legal actions and will cooperate with lawyer’s offices.

68. IT, Planning & Supervision Department
Necessary personnel equipping
Processing WEB sites of the enterprise, presentation of information, interaction with customer users related to services, provided by the enterprise.
Forming local program team, obligate to reply to all variety applicative solutions
Hardware upgrading of the information system and computer network, as well as improving mobile and wireless connection.
Professional training of IT personnel through attendance of seminars and courses

69. IT, Planning & Supervision Department
Improving IT knowledge of personnel, through organizing courses together with enterprise’s training center
Applicable solutions in financial management
Applicable solutions as air traffic application together with passenger’s system information or cargo center application, will be processed by programmer team

70. IT, Planning & Supervision Department
According to point out needs will focus on five main tasks:
Building and reconstruction phase of Airport “Alexander the Great”
Building and reconstruction phase of Cargo center at “Alexander the Great” in Skopje
Participate in Investments at Airport “Alexander the Great” and Airport “St. Apostle Paul”
Taking part in solving and proving the estate owner of terrain and facilities
Providing construction and other license related to designing and constructing of facilities

71. Financial Plan

72. Revenues Revenues 2006 2007 Plan Percentage Air Traffic Revenues
6,85%
Commercial Revenues
29,77%
OPERATIVE REVENUES
11,07%

73. Structure of Planned Operating Revenues
Aeronautical revenues
Non-aeronautical revenues
Runway maintenance revenue
From this revenues, participation of Airports is: Airport “Alexander the Great” with 93,04%, Airport “St. Paul the Apostle” with 6,96%.

74. Expences Expences 2006 2007 Plan Percentage Employee Expenses
-0,65%
Material Expenses
15,98%
Non Material Expenses
72,00%
Depreciation
9,93%
Financial Expenses
15,47%
Total Operating Expenses
10,22%

75. Structure of Planned Operating Expences
Employee expences
Depreciation
Financial expences
Material expences
Non-Material expences

76. Expected Results
According to all forecast plans in year 2007 PEAS “Macedonia” is expecting to achieve positive financial result of 101,29 million denars or 1,65 million euros.
Profit will be reinvesting for Investment program purposes, using the tax changes that will positively influence on PEAS “Macedonia” reinvestment benefit.

77. Thank You For Your Attention