The SEA Group pays utmost attention to risk management in its business activities and has adopted specific monitoring and mitigation processes and procedures aimed at guaranteeing airport safety and service quality, protecting tangible and intangible assets of interest to stakeholders and creating value over the long term.
In 2016, in order to support existing measures, management decision-making processes and stakeholder assurance, the SEA Group initiated an Enterprise Risk Management (ERM) project designed to build a model for the identification, classification, measurement, monitoring and homogeneous and transversal assessment of operational risks.
The SEA Risk Model was thus defined as an annual assessment to involve management and area-specific risk specialists and ensure compliance with regulations and applicable reference standards.
This model aims to identify and assess the main business risks and define specific mitigation plans as required. The result of this activity provides the Board of Directors, the Control and Risk Committee and management with an overview of the main risks SEA is exposed to, facilitating mitigation, monitoring and the definition of actions to be implemented rapidly should risk events occur.
On September 21, 2017, the Board of Directors approved the Enterprise Risk Management Policy, which defined an ERM division, under the responsibility of the Chief Financial and Risk Officer, as a second level of risk management control to support corporate structures in the identification and management of business risks, through the development of tools, frameworks and methodologies, and to guarantee periodic reporting to middle and top management on the evolution of the risk profile.
This means that, with the support of risk specialists and the ERM division, corporate and line managements are the primary owners of the identification, assessment and management of the risks for which they are responsible. Top management then periodically reviews the overall company risk profile and opportunely orients the management of the main emerging risks, approving proposed response plans in line with the strategic objectives and corporate risk propensity defined by the Board of Directors. Finally, the Internal Audit team independently verifies the effectiveness and effective implementation of the complete risk management system.
SEA Group risk factors
The risks to which SEA Group is exposed can be grouped into four main categories: external risks, operational risks, financial risks and legal and compliance risks.
External Risks
SEA Group operates as an airport manager under a fully regulated regime, however, the Group's earnings and financial results are significantly influenced by worldwide socio-political, macroeconomic and competitive dynamics.
The following are the main strategic risks that can have particularly significant effects on SEA Group performance.
Airline strategies
As for the other airport operators, the future development of activities depends significantly on the strategic choices of airlines, which are dependent also on the global economic-financial performance. Over recent years a significant shift has also taken place in demand, generated by the increased presence of low cost airlines with a consequent increase in terminal competition.
The volume of passenger traffic and cargo in transit at the Linate and Malpensa airports represents a key factor in the results achieved by the Group. Any reduction or interruption to flights by one or more airlines operating out of the airports may result in a reduction in such traffic, with consequent impacts on activities and Group results.
In this context, the restructuring/sale of Alitalia may result in a reduction in flights at the Group’s airports, although SEA expects this risk to be mitigated by the probable redistribution of passenger traffic between airlines operating on the market and the capacity to attract new airlines. Any redistribution of traffic may require a certain period of time, temporarily influencing Group results.
Development of SEA’s regulatory framework and of the airport sector
SEA Group activities, as is the case for all Italian Airport Managers, are subject to a high level of regulation which impacts in particular the allocation of slots, the control of air traffic and the establishment of fees concerning services offered (airport fees, security control fees, fees for the use of common use assets and centralised infrastructure for handling services). Any change to the regulatory framework may impact the Group’s results.
Competition
The strategic choices of other operators representing an alternative to air transport, if not coherently integrated into a broader connectivity vision, may pose a threat to the domestic development of traffic at the Milan airports.
In particular, the technological development of fast rail transport has made it possible to reduce travel times from Milan to Rome and Naples, and has made it easier to reach even more distant destinations by rail. The increase in frequency of high-speed trains along these routes may lead to a reduction in air traffic through Linate airport.
Operating and business risks
The operating risk factors are strictly related to the carrying out of airport activities and may impact the short and long-term performances.
Safety & security
The occurrence of accidents would have consequent impacts on group activity and may also impact passengers, local residents and employees.
In order to monitor, mitigate and identify the action plans in the case of emergencies, theSafety Management System continues to operate, consolidating and further improving the results achieved in previous years. The guideline principles of the SEA airport Safety policy have remained unaltered in their consistency and suitability:
- guarantee design compliance, the construction and maintenance of flight infrastructure and plant and equipment satisfying the highest sector standards;
- ensure a review of operating processes to achieve the highest compliance possible with national and international regulations concerning Safety;
- monitor the maintenance of safety standards for all operators and external parties of any type within the airport sites;
- guarantee ongoing and appropriate training of personnel, with priority for operational staff, placing particular focus on the requirements and the consequent actions for an improved level of Safety;
- guarantee education and communication, so that all events which may affect Safety are flagged through the filling out of a Ground Safety Report.
Ground Safety Report and Safety Key Performance Indicators
As in previous years, in 2017 the safety events highlighted during the year were appraised and classified, based on the rules defined and communicated also with other operators at the periodic meetings of the Safety Committee.
The main event indicators, as per guidelines for aeronautical events classification, did not highlight any particular criticality in terms of maintaining good levels of aeronautical safety.
Activity and Service Interruptions
Group activities may be interrupted through: strikes by personnel, by those of the airlines, of personnel dedicated to air traffic control services and of the public emergency service operators; the incorrect and non-punctual provision of services by third parties; adverse weather conditions (snow, fog etc.).
Natural events, such as lightning, and overload short circuits may, for example, cause electrical blackouts with the consequent shutdown of information systems, affecting displays and leading to departure delays.
Corporate procedures have been readied to optimize the management of such events. In addition, risk transfer actions have been activated where possible, through opportune insurance plans.
Supplier Reliability
Any bankruptcy or operational difficulties of individual or difficult-to-replace suppliers may have an impact on the Group in operational and economic-financial terms.
In order to minimize exposure to such risk, the company is implementing a structured supplier qualification and performance monitoring system.
Human resources
The reaching of Group objectives depends on internal resources and relations with employees. The non-ethical or inappropriate behaviour of employees may have legal and financial consequences on company activities. The body of procedures, also in compliance with the 231 Model adopted by the Group, the Ethics Code (now the Conduct Code), training and in-house education on these issues, together with the talent development plans and the ongoing cooperation and dialogue with the trade unions, support an organisation which minimises the risks related to human resource management.
Information Technology
The increasing aggressiveness and pervasiveness of cyber attacks on a global level and new Digital Transformation technology initiatives involving the SEA Group may, by their particularly critical nature, increase the risk of vulnerability of airport information and technology systems.
SEA pays great attention to the protection of its IT systems and telecommunications infrastructure from unauthorized access and cyber attacks that may cause the temporary suspension or hindering of operational services. Periodic vulnerability assessments and penetration testing are performed on systems using the most advanced technologies and methodologies, and a dedicated information security division has been established within the ICT Department. Activities are underway for obtaining ISO 27001 certification and a Cyber Risk framework is being defined to monitor all corporate technical and conduct requirements.
Financial Risks
The management of financial risks is carried out by the Parent Company which identifies, evaluates and implements actions to prevent and limit the consequences of the occurrence of the above-stated risk factors.
Credit risk
The credit risks represent the exposure of the SEA Group to potential losses deriving from the non-compliance of obligations by trading and financial partners.
This risk is primarily of an economic/financial nature, or rather the possibility of the default of a counterparty, and also factors of a technical/commercial or administrative/legal nature.
For the SEA Group the credit risk exposure is largely related to the deterioration of a financial nature of the principle airline companies which incur on the one hand the effects of the seasonality related to aviation operations, and on the other consequences of geopolitical events which impact upon the air transport sector (wars, epidemics, atmospheric events, rise in oil prices and economic/financial crises).
In order to control this risk, the SEA Group has implemented procedures and actions to monitor the expected cash flows and recovery actions.
In accordance with the internal policy on receivables the client is required to provide guarantees: this typically relates to bank guarantees issued by primary credit institutions or deposit guarantees.
In relation to the payment terms applied for the majority of the clients, credit terms are largely concentrated within 30 days from the relative invoicing.
Trade receivables are reported in the financial statements net of doubtful debt provisions, which are prudently made based on the underlying disputes at the balance sheet date. The doubtful debt provision necessary to adjust the nominal value to the realisable value is determined analysing all receivables and utilising all available information on the debtor. The SEA Group, against overdue receivables, receivables in dispute, or for which there is a legal or administrative procedure, utilises the same write-down percentages.
Market risks
The market risk to which the SEA Group is exposed comprises all types of risks directly and indirectly related to market prices. In 2017, the market risks to which the SEA Group were subject were:
a. Interest rate risk
The SEA Group is exposed to the risk of changes in interest rates in relation to the necessity to finance its operating activities and the use of available liquidity. The changes in interest rates may impact positively or negatively on the results of the SEA Group, modifying the costs and returns on financial and investment operations.
The SEA Group manages this risk through an appropriate mixture between fixed and variable rate loans, with the objective to mitigate the economic effect of the volatility of the interest rates.
Variable interest loans expose the SEA Group to a risk originating from the volatility of the interest rates (cash flow risk). Relating to this risk, for the purposes of the relative hedging, the SEA Group makes recourse to derivative contracts, which converts the variable rate to a fixed rate or limits the fluctuations in variable rates over a range, in this manner reducing the risk originating from the volatility of the rates. We highlight that these derivative contracts, underwritten exclusively for the purposes of hedging market rate volatility, are recorded through the cash flow hedge method.
At December 31, 2017 the gross financial debt of the SEA Group was comprised of medium/long-term loans (medium/long term portions of loans) and short-term loans (exclusively the medium/long-term portion of loans maturing within 12 months. At this date SEA did not make recourse to short-term debt).
b. Currency risk
The SEA Group, with the exception of the currency risk related to the commodity risk, is subject to a low currency fluctuation risk as, although operating in an international environment, the transactions are principally in Euro. Therefore, the SEA Group does not consider it necessary to implement specific hedging against this risk as the amounts in currencies other than the Euro are insignificant and the relative receipts and payments generally offset one another.
c. Commodity risk
The SEA Group is exposed to price variations, relative exchange rates and energy commodities (gas and marginally, electricity). In this respect, it should be noted that the Group’s electricity production is predominantly intended for internal needs (56.7% of energy sold), while the heat produced is partly intended for airport uses (73.8%) and partly transferred to third parties (26.2%). The Group mainly procures gas in order to feed the two cogeneration plants for the production of electricity, heat and cooling. The SEA Group, limited to only SEA Energia, is exposed to changes in prices, and the relative currency fluctuations, of the energy commodities utilised i.e. gas. These risks derive from the purchase of the above-mentioned energy commodities, which are principally impacted by fluctuations in the prices of the underlying fuels, denominated in US Dollars. At the SEA Group, these fluctuations are absorbed through formulas and indexing for the pricing structures adopted under the sales contracts.
In 2017, the SEA Group did not undertake any hedging of this risk, although not excluding the possibility in the future.
Liquidity risk
The liquidity risk for the SEA Group may arise where the financial resources available are not sufficient to meet the financial and commercial commitments within the agreed terms and conditions.
The liquidity, cash flows and financial needs of the SEA Group are managed through policies and processes with the objective to minimise the liquidity risk. Specifically, the SEA Group:
- centrally monitors and manages, under the control of the Group Treasury, the financial resources available, in order to ensure an efficient management of these resources, also in forward budgeting terms;
- maintains adequate liquidity in treasury current accounts;
- obtains committed credit lines (revolving and non) which covers the financial commitments of the Group in the coming 12 months deriving from the investment plan and debt repayments;
- monitors the liquidity position, in relation to the business planning.
For further information, reference should be made to paragraph 4 “Risk management” of the Explanatory Notes to the Consolidated Financial Statements.
Legal and compliance risks
The Group operates in a sector regulated at a national, EU and international level.
A significant part of SEA Group revenues derives from the activities carried out based on the agreement signed between Società per Azioni Esercizi Aeroportuali SEA and ENAC, with duration until May 4, 2041. The Agreement provides for a series of obligations relating to the management and development of the Milan airport system, in addition to advanced withdrawal in the case of serious non-fulfilment by SEA and dissolution conditions in the case of a delay for more than 12 months in the payment of the fee due by SEA, or in the case of a declaration of bankruptcy by SEA. The conformity of the processes and procedures to national and international standards leads to the consideration that the risk of non-compliance with the concession rules is remote.
In this regard, European certification for adjustment to EU Regulation 139/2014 establishing the technical requirements and administrative procedures for EU airports was obtained.
Risk related to the European Commission Decision of December 19, 2012 concerning presumed State Aid to SEA Handling and the Decision of July 9, 2014 to explore the establishment of a newly incorporated and capitalised company Airport Handling
(a) Proceedings regarding the European Commission decision of December 19, 2012
With decision of December 19, 2012, the European Commission judged that the share capital increases carried out by SEA in favour of its subsidiary SEA Handling in the 2002-2010 period for approx. Euro 360 million, constituted State Aid incompatible with the internal market, and consequently imposed upon the Italian State the obligation to demand restitution of the presumed State Aid from SEA Handling.
As more fully described in the Annual Financial Report 2016, SEA, in the context of a formal 'alternative execution' project of the decision, without prejudice to any reservations and objections on the decision’s unlawfulness, has taken a series of measures - in the framework of the discussions between the Italian authorities and the European Commission - including: (i) SEA Handling’s liquidation and definitive exit from the market, (ii) the incorporation of Airport Handling to continue offering ground handling services at arm’s length, with other handling companies and in absolute economic discontinuity with SEA Handling, (iii) the assignment of the entire stake in the share capital of Airport Handling into a trust called the "Milan Airport Handling Trust", in order to exclude any form of SEA control over Airport Handling and continuity between SEA Handling and Airport Handling, (iv) the sale of 30% of Airport Handling shares to a third operator with the option, under certain conditions, to purchase an additional 40% of the shares.
In relation to the above-mentioned decision three independent appeals were made before the European Union Court, by the Italian State, by SEA Handling and by the Milan Municipality.
However, with the liquidation of SEA Handling having been concluded in the meantime and the company having sold all remaining assets and defined all its assets and liabilities, following the approval of the final liquidation financial statements by the shareholders' meeting on July 10, 2017, the company filed an application to be removed from the Companies Register.
By reason of the changed de facto and de jure situations relating to SEA Handling, the Court of the European Union, at the request of the European Commission and SEA Handling, ascertained by Order of January 22, 2018 that the matter of the dispute concerning SEA Handling’s appeal has ceased to exist since the appellant company was dissolved. As a result, the Court found that there was no longer a need to adjudicate on the appeal brought by SEA Handling.
In parallel, having taken note of the Italian Government’s observations regarding SEA Handling’s dissolution, it ordered the cancellation of the case relating to the appeal brought by the Government against the Commission’s decision.
Given the above, the only appeal currently pending against the Commission’s decision is that brought by the Municipality of Milan. The hearing was held on February 28, 2018. A decision is expected during the current financial year.
(b) Proceedings relating to the commencement of the European Commission’s preliminary investigation of July 9, 2014
On July 9, 2014, the European Commission launched a formal investigation, under the powers conferred upon it with regard to State aid, to get a better insight on certain aspects concerning the economic discontinuity relationship between SEA Handling and Airport Handling, and the possible existence of (additional) alleged State aid in SEA’s capitalisation of the new company.
By decision of July 5, 2016, sent to SEA by the Ministry of Transport on July 19, 2016, the European Commission concluded the investigation proceedings initiated in relation to the incorporation and capitalisation of Airport Handling S.p.A., noting: (i) the absence of economic continuity between SEA Handling SpA and Airport Handling SpA, (ii) the absence of the transfer to Airport Handling SpA of the obligation to repay the incompatible State aid, and (iii) the absence of State aid in the incorporation and capitalisation of this company.
The decision was published in the Official Journal of the European Communities dated December 1, 2017.
In the absence of appeals within the time limits envisaged by EU law, the Commission’s decision became res judicata and final.
Meanwhile, the process of SEA’s divestment of control over Airport Handling was completed:
- In December 2014, jointly with the Milan Airport Handling Trust’s Trustee, SEA conferred a mandate to an independent financial advisor in order to identify potential investors interested in acquiring a stake in Airport Handling;
- In September 2015, the Trustee signed a binding agreement with dnata, a leading international company in the Emirates Group active in the airport handling sector, for the sale of 30% of the Airport Handling shares, and a similar percentage of the Financial Instruments of Participation (FIPs) held by SEA in Airport Handling, with the assignment to dnata, on closing, of the majority of members of the board of directors and, therefore, of Airport Handling’s Governance;
- The agreement also provides for an option in favour of dnata for the purchase of an additional 40% of shares (call option) and a corresponding share of FIPs, upon the occurrence of certain conditions. The European Commission’s positive decision with regard to the July 2014 investigation no longer made it possible for dnata to exercise a put option provided in the event of an unfavourable decision;
- The closing of the transaction took place on March 23, 2016, after the decision of the Anti-trust Authority which, in the transaction in question and pursuant to Article 6, paragraph 1 of Law No. 287/90, did not recognise the establishment or strengthening of a dominant market position such as to eliminate or substantially and indefinitely reduce competition. As a result of this, it reclassified the portion of other financial assets held by SEA under the proposed sale as "current";
- Dnata’s investment in Airport Handling led to the company’s valuation of Euro 25 million. The amount confirmed the assets recorded in the Balance Sheet up to the previous half-year report. The transaction, in view of the sale of the first 30%, led to the payment of Euro 7.5 million by dnata as a lien for a predetermined period of time, and provided for the additional payment of Euro 10 million for the acquisition of the additional 40% stake (amounts to be divided proportionally between shares and EFIs respectively, held by the Trustee and SEA).
On the basis of current forecasts regarding the negotiations underway for the sale of the further share in Airport Handling through the Trust, the directors considered it appropriate to reduce the value of the assets recorded in the balance sheet for Euro 3,476 thousand. Moreover, estimating that these negotiations will be concluded by 2018, the 40% share of other financial assets under negotiation were reclassified from "non-current" to "current”.
Risk connected to the Extraordinary Administration Procedure of Alitalia SAI S.p.A. pursuant to Art. 2, paragraph 2 of Decree-Law No. 347/2003
The decree of the Ministry of Economic Development of May 2, 2017 declared the opening of Alitalia SAI S.p.A.’s extraordinary administration procedure pursuant to Art. 2, paragraph 2 of Decree-Law No. 347/2003 ("Alitalia in Extraordinary Administration Procedure 2017" or "Alitalia Procedure").
Status of the Procedure
Applications for admittance to liabilities - general terms
Applications for admittance to liabilities in the Alitalia in Extraordinary Administration Procedure 2017, pursuant to Art. 93 of the Insolvency Law, must be submitted by all Alitalia creditors: workers, suppliers and anyone having a claim against Alitalia, accrued prior to May 2, 2017.
Applications for admittance to liabilities in the Alitalia in Extraordinary Administration Procedure 2017 must contain the requirements referred to in Art. 93 of the Insolvency Law and must cover all "insolvency" claims accrued prior to May 2, 2017.
Secured creditors must indicate the type of right in their application, the applicable rule and any assets on which the right is to be exercised. Recognition of the right entails a preference in the percentage and payment order of claims admitted to the statement of liabilities.
In the absence of an indication and recognition of the right, the debt is admitted to the unsecured creditors’ list. It will then be settled proportionally to the receivable admitted and on the basis of the remaining assets.
Claims accrued post-May 2, 2017 are paid in pre-deduction by the Extraordinary Administration Procedure 2017.
An appeal may be presented pursuant to Art. 111-bis of the Insolvency Law only in the event of the debt’s non-admission or in the case of a dispute on the quantification or recognition of the right by the Procedure.
Pending legal proceedings
All legal proceedings pending at the date of the opening of the Procedure to which Alitalia is a Party will be declared interrupted, pursuant to Art. 43 of the Insolvency Law and, therefore, may be resumed within 90 days from the date of May 2, 2017.
Contracts in progress
All contracts that are unexecuted or not fully executed by both parties at the time of the opening of the Alitalia in Extraordinary Administration Procedure 2017 will continue, but the extraordinary administrators ("Administrators") may dissolve any contracts not deemed necessary.
Contracts in progress will continue to be executed until such time as the dissolution right is exercised.
Only after the Alitalia Procedure’s execution programme is authorised can the contracting party give written notice to the Administrators to make their decisions on the contract known within thirty days from receipt of the notice; the contract is considered to be dissolved should the time limit pass.
In the case of dissolution, or should the Administrators take over the contracts that are in progress at the date of the Alitalia in Extraordinary Administration Procedure 2017’s opening (May 2, 2017), the rights of the other contracting party are regulated by the provisions of Section IV, Chapter III, Title II of the Insolvency Law.
The SEA Group has receivables arising prior to May 2, 2017 (“Existing Receivables”) for: (i) landing and take-off fees and apron and hangar fees; ii) duties on the loading and unloading of air cargo; (iii) passenger fees; (iv) fees for security services and control; v) surtax and charges; (vi) space and parking fees; vii) sundry fees.
With particular reference to the Existing Receivables,
- In the event of takeover by the Administrators (which must be expressly declared), the company, also on the basis of legal advice obtained by SEA, believes that they must be fully paid pursuant to Art. 74 of the Insolvency Law by treating them as Current Receivables;
- Should the Administrators fail to takeover, insolvency rules will follow, through which SEA may invoke the recognition of a special chattel lien referred to in Art. 1023 of the Navigation Code with reference to the secured receivables.
With the application for admittance to liabilities sent to the Administrators on December 5, 2017 (Registry No. 06275), SEA requested admittance to Alitalia’s liabilities for the total amount of Euro 41,050,979.58, of which:
- Euro 6,294,881.49 in addition to the interest accrued and matured up to the sale of the aircraft (including related appurtenances and separable parts pursuant to Art. 1023 of the Navigation Code) on a preferential basis pursuant to Art. 1023 of the Navigation Code;
- Euro 25,133,700.27 (Euro 2,527.77 of which are for interest accrued up to May 2, 2017) as an unsecured debt, formulating an express application to pre-deduction admission for the amount of Euro 1,562,565.78 (Euro 1,131.68 of which are for interest accrued up to May 2, 2017), should the Extraordinary Administrators decide to takeover the Service Contracts;
- Euro 9,622,397.82, in pre-deduction for the supply of services and activities in favour of the A.S. Procedure (between May 2 and October 31, 2017).
Following admittance to liabilities, SEA S.p.A. received payments from Alitalia in Extraordinary Administration amounting to a total of Euro 4,592,611.44 relating to pre-deducted receivables post-May 2 (originally amounting to Euro 9,622,397.82). Thus, the receivables admitted to pre-deduction amounted to Euro 5,029,786.38 at March 16, 2018, of which Euro 4,592,529 for additional rights and Euro 437,257.38 for various invoices.
By means of the certified email communication of February 7, 2018, the Administrators informed creditors that they had filed a request with the Court of Civitavecchia to split the statement of liabilities, starting with an examination of the section for workers and, at the same time, scheduling a series of hearings (starting with the one already set for February 21, 2018) in which to verify the proof of debt.
Given that the Administrators stated that they intend to first address the workers’ applications, SEA’s application, registered under No. 06275, could therefore be included in the expected "fourth partial project of the statement of liabilities", to be filed by October 22, 2018.
At the same time, however, the Administrators have announced that, in any case, they want to reserve the right to assess whether to split the statement of liabilities project further "to enable them to more efficiently examine homogeneous classes of creditors (e.g.: passengers and airports, suppliers, institutions and banks)". It follows that SEA’s application could again be postponed to a date later than October 22, 2018.
It should also be noted that claims arising post-May 2, 2017 and up to June 30, 2017 have been fully paid to-date, save for the amount of Euro 513,362 in relation to which an analysis is underway between the parties, and the amount of Euro 1,804,346 for unpaid surtax.
With regard to the valuation of receivables, it should be considered, however, that – in view of current circumstances – there are no recorded defaults or non-payments by Alitalia in relation to Current Receivables that are pre-deductible and holding preferential claims. In view of the overall behaviour and statements made by the Administrators, there are no elements suggesting that these will not take over the current contracts with SEA once the Administrators’ programme is approved. The treatment of existing receivables depends on this decision and it should be noted that a substantial part of these receivables hold preferential claims.
In the current state, taking into account the uncertainties related to (i) the fact that the Administrators’ Programme has not yet been approved and its implementation methods are not known (ii) the Administrators have not yet declared the takeover of current contracts with SEA, with the consequent equalisation of the Existing Receivables to Current Receivables, it is believed, in view of present circumstances and on the basis of information currently available, that the current uncertainty and risk profiles have been assessed in the broader context of the overall assessment of trade receivables. The update of estimates has been provided to obtain more complete information, even ahead of the abovementioned events.
Public information on Alitalia’s economic and financial context does not exclude the possibility of losses of a significant extent emerging in relation to the receivables registered.
SEA set aside Euro 25,252 thousand as doubtful debt provision (referring to the existing receivables prior to May 2, 2017), for which there is currently no guarantee on collection.
It should be noted that lodged claims also include surtax on boarding fees amounting to Euro 6,173 thousand for which SEA acts as a withholding agent. These have a corresponding debt entered as a liability toward Institutions (INPS and Ministry of the Interior) for which the carrier is the debtor. No specific doubtful debt provision has been set up.