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. 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.
Effects resulting from the use of Munich Airport are known as location effects. These 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 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 and expand 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 Munich Airport Group amounted to around € 750 million. 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 were procured directly from 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, it ensures its procurement policy is consistent with public procurement legislation. Where public contracts are involved, calls for tenders are issued on a Europe-wide basis in keeping with the binding regulations under procurement law. The Group normally puts contracts that are not subject to public procurement legislation to tender based on a formal, company-specific process.
Supplier structure and management
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.
Local help for the airport
For flight operations to run smoothly during the winter, runways, aprons, and taxiways must be free of snow and ice. To clear the area of more than four million square meters, Munich Airport has been actively supported for more than 20 years by farmers and haulage firms from the region. To this end, tractors are equipped with specialist devices such as plows, sweepers, and radio equipment.
In 2018, 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 company’s 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
Responsibility in the supply chain
A party submitting a tender must confirm it complies with the statutory provisions in order to rule out anything that would prevent it taking part in public procurement or tendering procedures. They 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 (Legal basis: Section 21 SektVO, Section 7 SektVO). For vehicles and equipment for the FMG vehicle pool, it must be ensured that environmentally-friendly vehicles, specifically those with low CO2 emissions, are procured. 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 around 20 million euros each year – nearly all of which originates from Bavaria, and a good 50 percent of which comes from the area directly around the airport. Moreover, the food purchased is predominantly seasonal produce.