Munich Airport has a 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.
Value distribution 2017
in € million
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 the region which are generated by supplier and service relationships of 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.
Proximity to the airport is crucial for companies
Effects resulting from the use of Munich Airport are known as location effects. They include positive economic effects, such as an increase in productivity and investments, plus a high level of employment and innovation. Proximity to the airport is seen as an important criterion for companies deciding to settle in the area. The airport also offers impressive advantages for the tourism industry.
Central procurement of services
Group-wide product group management
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 is comparable to the requirements of a small town: the 139 product groups range from office supplies through road construction to vehicles and buildings. In 2017, the total procurement volume1) of the Munich Airport Group amounted to around 680 million euros. All procurement by specialist areas and subsidiaries is handled by the central Group-wide product group management system. Only the product groups merchandise, food & beverage, and medical equipment are purchased directly by the subsidiaries.
Legal provisions in respect of procurement
The Munich Airport Group, a sectoral contracting entity, operates in the field of «Ports and Airports». As such, the procurement policy is based primarily on public procurement legislation. In the case of public orders, there is a Europe-wide call for tender in accordance with binding specifications under procurement law. Orders that are not subject to public procurement legislation are normally put out to tender by the Group on the basis of a formal process.
Around 5,100 suppliers work for the Munich Airport Group. The supplier structure during 2017 was relatively consistent with the previous year. 97 percent of the companies supplying Munich Airport are headquartered in Germany. Of these, 54 percent are from Bavaria and 34 percent are from Munich and the area surrounding the airport.
In 2017, Flughafen München GmbH assessed around 150 of its framework agreement partners according to the following criteria: the quality of the product or services, reliability, service and price trends, as well as the companies’ certification according to quality and environmental standards. In the event of poor outcomes, the suppliers had the opportunity to eliminate existing deficiencies in supplier audits.
The product group structure at Flughafen München GmbH
- Office and other overheads
- Raw materials
- General services
- Vehicles, machinery, and equipment
- Semi-finished products, tools
- Electrical, automation, and process control technology
- Construction and planning
A party submitting a tender must confirm it complies with statutory provisions in order to rule out anything that would prevent it taking part in public procurement or tendering procedures. Those submitting tenders must also provide evidence that they comply with the standards relating to quality assurance and environmental management. The top priority when commissioning products or services is to draw up agreements that satisfy environmental, social, and economic requirements. For example, in the new call for tenders for service clothing for around 2,000 employees in 2016/2017 by Flughafen München GmbH, one component of the service description was compliance with the minimum criteria regarding ethical standards and ecological and human ecological requirements for fabrics and materials. The Munich Airport Group awards contracts on the basis of cost-effectiveness and places particular emphasis on the utilization of materials and products that are both durable and use low levels of natural resources. For investment goods, any subsequent costs for servicing and maintenance (life cycle costs) are also considered, where necessary. The Group is mainly supplied by business partners in the region, which helps reduce transportation distances and CO2 emissions. For example, Allresto purchases food worth almost 20 million euros each year – nearly all of which originates from Bavaria, and at least half comes from the area directly around the airport.
1) The figures relate to the total procurement volume placed by the Munich Airport Group in 2017.