(News Bulletin 247) – The airport operator opened very sharply lower on Monday after the Minister of Transport, Clément Beaune, declared that he wanted to put an end to the single revenue cash register system for large airports. A measure which, however, does not really concern ADP.

The nervousness of the market is such that shares can suffer significant sell-offs following a misreading of a press article by investors. This is what seems to be happening to the ADP group on the stock market this Monday. The operator of Paris airports fell by more than 6.5% this Monday at the start of the session and fell further by more than 4% around 10:35 a.m.

According to an analyst who knows the company well, this stock market turbulence is due to an erroneous market reading of several press articles.

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A question of revenue scope

La Tribune and Les Echos reported, respectively on Friday evening and Monday morning, that the Minister of Transport, Clément Beaune, had announced that he wanted to put an end to the single checkout system at major French airports.

As explained by the Transport Regulatory Authority (ART), this single or double cash register system raises the question of the allocation of unregulated activities (such as income from shops) in the allocation of revenue. Should they be integrated with civil aeronautics revenues, that is to say the fees collected by airports from airlines?

“In a single cash register system, the airport’s activities, whether of an airport or commercial nature, are integrated into the regulated scope. In this framework, airport fees take into account the results of commercial activities, including profits can thus reduce the fees paid by users to ensure coverage of the costs of airport public services”, develops the Authority.

Conversely, in a dual cash register system, a clear separation is made between “pure” airport activities and commercial activities, which therefore depend on a separate cash register. “The regulated fund is supplied exclusively by aeronautical activities and constitutes the regulated perimeter. In this context, the charges associated with airport public services are entirely financed by airport fees,” explains the ART.

A wrong reading

However, during a congress organized by the Union of French Airports, Clément Beaune declared on Friday that he had “taken the decision to set up a model of equipped and incentive cash register”, reports La Tribune.

The daily specifies that this hybrid model would amount to a dissociation between airport activities while still allowing part of the revenue to be transferred to the regulated scope.

According to the financial analyst previously cited, these statements make the market fear a negative impact of this potential new regulation on ADP. Wrongly, however.

“I really think that this is a bad reading on the part of the market quite simply because Parisian airports do not already operate with a single cash register system. This probably constitutes a misunderstanding,” judges this analyst.

Indeed, if the single checkout system is in force in the airports of Marseille, Bordeaux, Lyon, Nantes and Toulouse, this is not the case for the Parisian platforms or Nice, as is also well written in the articles from La Tribune and Les Echos.

Beyond the turmoil of this Monday, let us remember that regulation constitutes one of the most important frameworks for analyzing actions in the airport sector. The lack of visibility on long-term regulation and therefore on the evolution of airport fee rates that the airport collects from airlines, had also pushed HSBC to lower its recommendation on Groupe ADP in September to “keep ” to “lighten”.