european journal of social sciences issn: 1450-2267 - EuroJournals

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European Journal of Social Sciences – Volume 5, Number 3 (2007) on the Frankfurt stock exchange and has become a member of Germany’s M-DAX mid-cap index of blue chip companies. After Deutsche Lufthansa, Fraport ranks as the second largest aviation-related company in Germany. The Financial Times also covers Fraport in its survey of European Top 500 companies. Fraport's expertise is based on almost 80 years of aviation history at Frankfurt am Main, Germany. Founded in 1924, Südwestdeutsche Luftverkehrs AG – Fraport’s forerunner – began operating Frankfurt Airport at the former Rebstock airfield. In 1936, Frankfurt Airport (airport code = FRA) was inaugurated at its present-day location, adjacent to the Frankfurter Kreuz autobahn intersection about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA serves as Fraport’s home base and showcase for the company's know-how and technologies. Besides managing Frankfurt Airport, Fraport AG and its affiliated businesses provide a wide range of planning, design, operational, commercial and management services around the world. Furthermore, Fraport AG also serves as a neutral partner to the world's major airlines: offering a complete package of aircraft, cargo, passenger and other ground handling services, as well as aviation security services at FRA and elsewhere. The company is also expanding its activities in airport retailing, airport advertising, IT services, e-commerce, intermodal concepts, hub management, and other areas. ICTS Europe, a wholly owned Fraport subsidiary, is now the largest provider of aviation security services throughout Europe. To strengthen FRA’s competitive position in international aviation and to meet future traffic needs, Fraport AG is spearheading the largest development in the airport’s history. The €3.3 billion Airport Expansion Program (AEP) includes the construction of a fourth runway for landings and a third passenger terminal with a design capacity of more than 25 million passengers per year. The new runway will allow FRA’s so-called coordinated runway capacity to grow from 80 to 120 aircraft movements per hour – a 50-percent increase. In addition to the AEP, Fraport’s is moving ahead with plans for a new maintenance base at FRA for Lufthansa’s future fleet of Airbus A380 superjumbos that will be delivered beginning in 2007 (www.fraport.com). Fraport AG has an extensive risk management system. They are timely determined, evaluate and control the risks with which their activities are related. The primary objective of their risk management system is to ensure a controlled treatment of risk. This gives room to maneuver, enabling risks to be taken if the weighting of opportunities and risks entered into appears to be favorable to the Fraport A.g. As part of their value-oriented management approach, they make their capital expenditure decisions based on this principle. In the Fraport A.G., risk management is integrated in the operating business processes. Management of risks is made by those responsible for the business segments. Risks from group companies are controlled by Fraport AG, partly via the business segments and investment controlling department and partly by representatives of Fraport AG on the relevant supervisory boards. The central body responsible for the risk management system is the risk management committee, made up of representatives from the group's segments. The risk management committee, which reports directly to the executive board of Fraport AG, is responsible for monitoring risks and coordinating measures from the group's point of view. Risk transfer by entering into insurance policies is controlled by their subsidiary, Airport Assekuranz Vermittlungs-GmbH (AAV). Group-wide guidelines require a quarterly documentation and reporting of risk situations. This regular reporting format can be supplemented, on a case-by-case basis, by reporting significant changes. Materiality limits are set for this purpose. The executive board is thus in a position to meet its responsibility for the entire group. The ability of their risk management system to function is checked by their internal auditor department. Their findings serve to continually improve the risk management system. All risks are defined as significant, to the extent they are quantifiable, if their effect on earnings is at least € 10 million before tax, as well as risks which are not quantifiable but could have a similar effect on the net assets, financial position and results of operations. An overall evaluation of the risks to which Fraport AG is exposed revealed that continuation of the company as a going concern is not endangered as far as its 68
European Journal of Social Sciences – Volume 5, Number 3 (2007) net assets and liquidity are concerned and there are no discernible risks endangering continuation of the company as a going concern in the foreseeable future (Fraport A.G., 2006). Fraport has a comprehensive risk management system. It makes sure that significant risks are identified, monitored constantly and limited to an acceptable level. Fraport actively looks for opportunities and tkaes them when this is justified by the ratio of the size of the anticipated benefits to the risks involved. Controlled risk exposure is the primary objective of Fraport’s risk management system. This objective is the basis fort he following risk policiy principles: • The risk strategy is co-ordinated with the corporate strategy and is required to be consistent with it, as the strategy specifies how strongly the company’s operations are exposed to risks. • Risk management is integrated in the ongoing business process. • Risks are maneged primarily by the organizational units that operate locally. • The aim of the risk managemen process is to make sure that significant risks are identified, monitored constantly and limited to an acceptable level. • Active and open communication of the risks is a major success factor in the risk management system. • All the employers of Fraport A.G. are expected to participate actively in risk management in their area of responsibility. 5.2. TAV ERM Practice TAV Airport Holding Co. is the biggest and pioneer as an airport operator in the Turkey. Also TAV has many superior and different characteristics from the other airport operators in the Turkey. TAV operates 3 main and biggest airports in the Turkey: Istanbul-Atatürk, Ankara-Esenboga and Izmir- Adnan Menderes. TAV is operates Gurcistan-Tıflis Airport from February, 2007. Also, TAV is operating broad geographical field as an operational. TAV with its know-how and expertise has been awarded with the construction and B.O.T projects inside and outside of Turkey since 2003. The projects are investment, construction and operation of Ankara Esenboga New Domestic and International Terminal, Izmir Adnan Menderes International Terminal and Tbilisi and Batumi Airports, The Construction of Cairo International Terminal Construction, TB3/Eygpt, Tohid Iranian School Construction/UAE, Emirates New Engineering Centre Hangar Roof Structural Steel Work/UAE, Majestic Tower (G+6P+46) in Al Memzar/Sharjah/UAE, Al Sharaf Shopping Mall Construction, UAE. As the company has grown so fast for the last years, the management has made the decision to gather all the investment, construction and operation activities and facilities in the aviation sector under one roof and for this purpose TAV INVESTMENT HOLDING Co. (TAV Holding) has been established on 1 July 2005 to unite all TAV group companies. TAV Airports Holding Co. is rapidly growth duration both Turkey and the across the world as an airport operators. Their growth includes service concept and geographical area in the both the managerial and the operational context. This growth increase and diversify of their risks. Also, growth process is risky. TAV managers are aware of the providing to the continuously and sound growth. The process and providing of its continuity is risky. ERM is indispensable and important implementation issue for sustainable growth, protect and increase of corporate value, provide to reasonable assurance for organizational objectives, effective and successful airport management to TAV. TAV is get ERM implementation decision at the end of the 2005 within a formal framework. In the 2006, TAV ERM model developed with university-private sector collaboration. Created Airport ERM model tailored according to the characteristics and needs of TAV airport holding Co. (The model is basically based on: “Kucuk Yilmaz, Ayse. ‘Enterprise Risk Management Implementations and Model Suggestion to Airports’, Doctoral Dissertation, Anadolu University, Social Science Institute, Civil Aviation Management Branch, Eskisehir, Turkey, 2007”). ERM model identifies 32 steps of the ERM implementation process, which are designed as the 6 key components and their subcomponents: i. Analysis of Internal environment and Determination of Requirements of ERM 69
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european journal of social sciences issn: 1450-2267 - EuroJournals

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