FHZN

CHF 261 CHF 8.01B market cap February 21, 2026

Flughafen Zurich AG FHZN BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

PriceCHF 261

Market CapCHF 8.01B

EVCHF 9.38B

Net DebtCHF 1.38B

Shares30.7M

2 BUSINESS

Flughafen Zurich is the sole operator of Switzerland's largest airport, serving 31+ million passengers annually through a hybrid-till model: ~55% regulated aviation charges (landing fees, passenger charges, noise surcharges) and ~45% unregulated commercial revenue (The Circle real estate, retail, parking, international airports). Through subsidiary ZAIA, it operates 10 airports in Brazil, Chile, Colombia, Curacao, and holds a 40-year concession for India's Noida International Airport (opening 2025). Revenue is driven by passenger volumes, real estate occupancy, and international expansion.

Revenue: CHF 1.33B Organic Growth: 7.3%

3 MOAT WIDE

Irreplaceable natural monopoly -- physically impossible to build a competing airport in the Zurich metropolitan area. Five reinforcing elements: (1) Efficient scale -- one airport is optimal for a 1.8M metro area; (2) Regulatory protection -- government concession with perpetual characteristics, Canton of Zurich holds 33.3%; (3) Network effects -- hub status for SWISS/Lufthansa with 29% connecting passengers; (4) Real estate lock-in -- The Circle mixed-use development, 90%+ occupancy, CHF 197M revenue; (5) International know-how -- 10+ airport concessions leveraging operational excellence. 55.3% EBITDA margins confirm monopoly pricing power.

4 MANAGEMENT

CEO: Lukas Brosi (since 2023)

Insider promotion from CFO. Maintained balance sheet through COVID without equity dilution. New dividend policy: 50% standard payout, +25% additional if leverage <2.5x. Conservative leverage (1.6x). International expansion disciplined -- concession-based model minimizes capital at risk. Board 50% women, includes Canton/City representatives. Canton of Zurich (33.3%) + City (5.05%) = 38.4% government ownership aligns regulator with shareholder interests.

5 ECONOMICS

33.3% Op Margin

8.3% ROIC

CHF 71M (depressed by capex) FCF

1.9x Debt/EBITDA

6 VALUATION

FCF/ShareCHF 5.38 (2024); normalized ~CHF 10

FCF Yield2.1% (2024); normalized ~3.8%

DCF RangeCHF 235 - 265

Normalized FCF CHF 300M growing 4% for 5 years, 3% for years 6-10, 2% terminal growth, 7.5% discount rate. Earnings-based: 20-25x normalized EPS of CHF 11 yields CHF 220-275. EV/EBITDA 12-14x yields similar range. Currently at upper end of fair value.

7 MUNGER INVERSION -16.0%

Kill Event	Severity	P()	E[Loss]
Pandemic/health crisis shutting down air travel	-40%	10%	-4.0%
Regulatory squeeze on airport charges	-25%	15%	-3.8%
Noida Airport execution failure / India political risk	-15%	20%	-3.0%
Climate regulation reducing flight volumes	-20%	15%	-3.0%
Noise/capacity constraints tightening permanently	-15%	15%	-2.3%

Tail Risk: The tail risk is a simultaneous pandemic + recession that shuts down air travel for 12+ months while Noida Airport is in its most capital-intensive phase. This would require emergency financing, potentially diluting shareholders, while international concessions bleed cash. Combined with a regulatory tightening on noise charges post-pandemic, this could create a 60%+ drawdown. Probability: <5%.

8 KLARMAN LENS

Downside Case

In the bear case, a recession reduces passenger volumes 15-20%, Noida Airport disappoints on startup, and noise regulations tighten. Revenue falls to CHF 1.1B, EBITDA to CHF 550M. Stock de-rates to 17x earnings = CHF 150-170.

Why Market Wrong

The market may be undervaluing the international expansion optionality. Noida International Airport alone could handle 70M+ passengers at full build-out, serving Delhi NCR (population 30M+) in one of the world's fastest-growing aviation markets. The international business (CHF 131M revenue) is a fraction of group revenue but could become a major earnings driver over 10-20 years. The Circle real estate compound effect is also underappreciated -- 90%+ occupancy generating recurring rental income independent of passenger volumes.

Why Market Right

The stock is near all-time highs after resolving all major overhangs: COVID recovery complete, runway vote won, dividend policy upgraded, Noida nearing completion. Domestic growth is structurally limited to 3-5% (mature airport, noise constraints). ROE of 11.6% is mediocre, reflecting capital-intensive infrastructure economics. At 23.8x P/E, the market is pricing this correctly as a premium monopoly infrastructure asset -- no mispricing exists.

Catalysts

(1) Global recession creating 25-40% drawdown in travel stocks; (2) Noida construction delays or cost overruns spooking investors; (3) Broad European market correction; (4) Capex guidance increase depressing FCF further; (5) Noise regulation negative surprise.

9 VERDICT WAIT

B+ T2 Resilient

Strong BuyCHF 185

BuyCHF 220

SellCHF 310

Flughafen Zurich is a textbook wide-moat natural monopoly with 55% EBITDA margins, conservative leverage, and aligned government ownership. The business has fully recovered from COVID and is generating record earnings. However, at CHF 261 (23.8x P/E), the stock is at the upper end of fair value (CHF 235-270) with no margin of safety. ROE of 11.6% fails the Buffett 15% test, though this is partly due to the heavy capex investment cycle. Add to WAIT list; accumulate CHF 185-220 during next downturn. Position size 2-3% of portfolio at entry.

🧠 ULTRATHINK Deep Philosophical Analysis

FHZN - Ultrathink Analysis

The Core Question

The question is not whether Zurich Airport is a great business. It is. The question is whether a great business at a full price is a great investment. And the answer, today, is no.

But let us first understand why this business is so remarkable, because the depth of the moat determines how patient we can afford to be -- and patience, in this case, is the entire strategy.

Zurich Airport is one of a handful of assets in the world that qualifies as a true natural monopoly. Not a regulatory monopoly that could be revoked by a stroke of a pen. Not a technological monopoly that could be disrupted by a startup. A physical monopoly. You cannot build another major airport serving the Zurich metropolitan area. The land does not exist. The environmental permits would never be granted. The politics would never align. And even if all those obstacles vanished, the economics of air travel are such that a single hub airport is optimal for a catchment area of two million people. This is efficient scale in its purest form -- the same economic logic that protects local water utilities and toll roads, but applied to an asset that sits at the intersection of global commerce, tourism, and human connection.

Moat Meditation

What makes this monopoly particularly durable is the layering of protective barriers. The physical impossibility of competition is the foundation, but on top of that sit four additional layers.

First, the regulatory layer. The Canton of Zurich -- the regional government -- owns 33.3% of Flughafen Zurich. The City of Zurich owns another 5.05%. Together, the public authorities hold 38.4% of the company. This creates an extraordinary alignment of interests that I have rarely seen in any investment. The regulator is the major shareholder. The entity that sets the rules for airport charges is the same entity that profits from those charges being set at economically rational levels. This does not mean the regulation is corrupt or captured -- Swiss governance is among the most transparent in the world. It means that the regulator has a deep, structural incentive to allow the airport to earn a fair return on capital. They would be destroying their own asset by over-regulating it. This is the investment equivalent of a reinforced concrete foundation.

Second, the hub network layer. SWISS International Air Lines, a Lufthansa subsidiary, uses Zurich as its primary hub. Twenty-nine percent of all passengers at Zurich Airport are connecting passengers -- they are not flying to Zurich, they are flying through it. This connecting traffic is self-reinforcing: the more routes SWISS offers from Zurich, the more connecting passengers it attracts, which justifies more routes, which attracts more connections. Dislodging a hub is extraordinarily difficult -- it would require rebuilding the entire connecting network elsewhere, which would take years and cost billions.

Third, the real estate layer. The Circle -- a 180,000-square-meter mixed-use development adjacent to the terminal -- is now 90%+ occupied with 49 companies and 5,000+ employees. Real estate revenue hit a record CHF 197 million in 2024. This revenue stream is partially decoupled from passenger volumes. Even if air travel softens, the companies renting office space at The Circle still need their offices. This diversification makes the business more resilient than a pure airport operator.

Fourth, the international know-how layer. By operating 10+ airports across Latin America and now building India's Noida International Airport, Flughafen Zurich has developed institutional capabilities in airport design, construction, and operation that create competitive advantages in winning future concessions. Each new concession adds to the knowledge base, which improves the probability of winning the next one.

These four layers -- regulatory alignment, hub network, real estate diversification, and international expertise -- combine with the physical monopoly to create one of the widest moats I have analyzed.

The Owner's Mindset

Would Buffett own this for 20 years? Yes, at the right price. The business characteristics are exactly what he prizes: essential infrastructure, predictable demand, monopoly economics, government-aligned ownership, and long-duration cash flows. Air travel is not going away. People will always need to fly to and through Zurich.

But Buffett would not buy it today. At 23.8x trailing earnings, the stock offers no margin of safety. And Buffett is, above all, a buyer of great businesses at fair prices -- not great businesses at any price. The ROE of 11.6% would give him pause as well. While this is partly explained by the heavy capex cycle (Noida, runway extension, ongoing maintenance of a 75-year-old airport), it means the business is not generating the 15%+ returns on equity that signal truly exceptional economics. Airport infrastructure is inherently capital-intensive -- you are continuously rebuilding terminals, runways, and systems. The margins are fat (55% EBITDA), but the denominator is large (CHF 5.2 billion in assets). This is the nature of infrastructure: you trade off explosive returns for monopoly stability.

Munger might frame it differently. He would note that the marginal return on The Circle investment and on Noida is likely much higher than the blended ROE suggests. The legacy Zurich Airport infrastructure -- depreciated over decades -- drags down the denominator. The incremental investments are earning attractive returns. This is a business getting better at the margin, even if the aggregate ROE appears pedestrian.

Risk Inversion

What could destroy this business? Genuinely destroy it, not just cause a temporary drawdown?

The honest answer is: almost nothing, short of civilization-altering events. A permanent ban on aviation would do it. A nuclear incident making the Zurich region uninhabitable would do it. But within the realm of foreseeable risks, this business is nearly indestructible.

COVID-19 was the closest thing to an existential test. Passenger volumes dropped 75% in 2020. The company posted a CHF 69 million loss. But it survived without raising equity, maintained its investment-grade credit rating, and recovered to record earnings within four years. The COVID experience actually demonstrated the business's resilience, not its fragility.

The risk I would monitor most closely is climate regulation. If European governments impose aggressive carbon taxes on aviation, or if cultural shifts toward "flight shaming" permanently reduce per-capita air travel, the growth assumption underlying the valuation would need to be revised. However, even in this scenario, the airport still operates -- people still fly, just perhaps fewer of them. The monopoly position means Flughafen Zurich captures whatever travel volume exists.

The Noida risk is more tangible but bounded. The investment is approximately CHF 750 million -- significant but not existential against a CHF 8 billion market cap. Even a complete write-down would represent a ~9% hit to equity value, painful but survivable.

Valuation Philosophy

The intrinsic value of this business is somewhere between CHF 235 and CHF 270 per share, depending on your assumptions about growth, discount rates, and the terminal value of the international business. At CHF 261, we are paying full price -- perhaps even a small premium.

The discipline required here is the hardest discipline in investing: the discipline to admire a great business and not buy it. To put it on the watchlist, set the price alerts, and wait. The waiting may take years. It may require another pandemic, another recession, or another bout of market panic. But airport stocks are inherently cyclical around a structural uptrend -- the drawdowns come, reliably, every 5-10 years.

The last time Flughafen Zurich traded at our Strong Buy price of CHF 185 was early 2024 -- less than two years ago. These opportunities recur. The key is to be ready when they do.

The Patient Investor's Path

The strategy for Flughafen Zurich is simple but demanding:

Do nothing today. The stock is fairly valued with no margin of safety.
Set alerts at CHF 220 (first accumulation) and CHF 185 (aggressive accumulation).
If a recession or crisis creates a 25-40% drawdown, begin building a 2-3% position.
Hold indefinitely. This is a business that will compound value for decades through passenger growth, real estate development, dividend increases, and international expansion.
Review annually. The key metrics to track are: passenger volumes, EBITDA margins, Noida progress, and the regulatory environment for airport charges.

The beauty of this investment -- the reason it is worth spending time analyzing even though we are not buying -- is that we now understand the business deeply enough to act decisively when the opportunity comes. When the next crisis hits and airport stocks sell off 30%, we will not need to scramble for data or debate the thesis. We will simply execute.

That preparedness -- the unsexy work of analyzing a business you do not yet own -- is the real edge in value investing. It is not information asymmetry. It is conviction asymmetry. When others panic, we will know exactly what we are buying and exactly what it is worth.

Zurich Airport will still be there in 20 years. The runways will still be there. The passengers will still be there. The Circle will still be there. The only question is whether we will own it -- and at what price.

Executive Summary

Investment Thesis (3 Sentences)

Flughafen Zurich is a textbook natural monopoly: the sole operator of Switzerland's largest and most important airport, serving 31+ million passengers annually with no physical possibility of a competitor being built. The business generates 55% EBITDA margins and 25% net margins through a hybrid-till revenue model combining regulated aviation charges with high-margin commercial real estate and retail, now enhanced by an international expansion into 10 airports across Latin America and India. At 23.8x trailing earnings and near all-time highs, the stock is fairly valued -- not cheap enough for a margin-of-safety purchase, but worthy of a watchlist position for patient investors awaiting a pullback.

Key Metrics Dashboard

Metric	Value	Assessment
Price	CHF 261	Near 52-week/all-time high (CHF 266.60)
EPS (TTM)	CHF 10.95	Record earnings, +7% YoY
P/E (TTM)	23.8x	At/above 5yr average (~20x)
EBITDA Margin	55.3%	Exceptional, record high
Operating Margin	33.3%	Strong infrastructure economics
Net Margin	24.7%	Consistent ~25%
ROE	11.6%	Below Buffett 15% test -- but improving
ROIC	8.3%	Modest; heavy capex cycle
Net Debt/EBITDA	1.9x	Conservative leverage
Dividend Yield	2.2%	Growing; new 50-75% payout policy
Free Cash Flow	CHF 71M (2024)	Depressed by heavy capex
Moat	WIDE	Irreplaceable natural monopoly

Decision

	Price (CHF)	P/E (est.)	Margin of Safety
Strong Buy	< 185	< 17x	> 25%
Accumulate	185 - 220	17-20x	10-25%
Fair Value	240 - 270	22-25x	At intrinsic value
Overvalued	> 300	> 27x	Premium territory
Current (261)	261	23.8x	~0-5% above estimated IV

RECOMMENDATION: WAIT Position Size: 2-3% of portfolio (at entry) Entry Target: CHF 185-220 (Accumulate), <CHF 185 (Strong Buy) Catalyst: Next recession/pandemic-driven travel downturn or market correction

Phase 0: Opportunity Identification (Klarman)

Why Does This Opportunity NOT Exist Right Now?

Unlike many of the stocks on our watchlist, Flughafen Zurich does NOT currently present a mispriced opportunity. The stock is near all-time highs, trading at the upper end of its historical valuation range. However, this is a business we want to own -- the question is at what price. Several factors explain why this high-quality monopoly is correctly priced today:

1. Post-COVID Recovery Complete Passenger volumes have returned to and exceeded 2019 pre-pandemic levels. The business is generating record EBITDA (CHF 733M) and record net income (CHF 327M). The "recovery trade" has fully played out.

2. Noida Airport Approaching Operations The marquee international investment -- a 40-year concession to build and operate India's Noida International Airport near Delhi -- is nearing completion (expected opening late 2025). This removes a major execution risk overhang.

3. New Dividend Policy Management announced a more generous dividend policy: ~50% payout ratio, with an additional 25% if leverage stays below 2.5x (potentially 75% total payout). This attracted income-oriented investors.

4. Runway Extension Approved Swiss voters approved the Zurich Airport runway extension, removing a decades-long political risk. This enables capacity growth for years to come.

When WILL This Opportunity Exist?

Airport stocks historically become mispriced during:

Pandemics or health scares (COVID-19 created a 35-40% drawdown in 2020)
Global recessions reducing travel demand
Regulatory shocks (noise restrictions, charge caps)
Capex-heavy periods when FCF is temporarily depressed (like now)
Broad Swiss market sell-offs or risk-off environments

We add FHZN to the WAIT list with clear accumulation targets.

Phase 1: Risk Analysis (Inversion)

"All I want to know is where I'm going to die, so I'll never go there." -- Munger

How Could This Investment Lose 50%+ Permanently?

Pandemic 2.0: A novel pandemic shutting down international air travel for 12+ months would replicate 2020-2021 losses. The company survived COVID with no equity raise (strong balance sheet), but another prolonged shutdown would strain even this fortress.
Regulatory Destruction of Returns: Swiss authorities cap regulated charges at levels that destroy the airport's ability to earn above cost of capital. Currently ~60% of revenue is from regulated charges. If the hybrid-till model shifts to single-till (pooling all revenue), margins would compress significantly.
Noida Disaster: The CHF 750M+ India investment turns into a money pit -- construction overruns, political interference, competition from Delhi's IGI Airport, or regulatory changes in India make the concession uneconomic.
Climate Regulation: Aggressive flight taxes, mandatory emissions reductions, or flight shaming culture shifts permanently reduce air travel volumes through Zurich.
Capacity Constraints Become Permanent: Noise regulations tighten further, runway extensions are reversed or limited, and Zurich Airport becomes structurally constrained at ~32M passengers with no growth path.

Probability-Weighted Risk Assessment

Risk Event	Severity	Likelihood	Expected Impact
Pandemic/health crisis	-40%	10%	-4.0%
Regulatory squeeze on charges	-25%	15%	-3.8%
Noida execution failure	-15%	20%	-3.0%
Climate regulation reducing flights	-20%	15%	-3.0%
Noise/capacity constraints	-15%	15%	-2.3%
Total Expected Downside			-16.0%

Key Mitigant

The Canton of Zurich owns 33.3% of the shares and the City of Zurich owns 5.05%. The government is simultaneously the regulator, the major shareholder, and the body that depends on the airport for economic vitality. This alignment of interests is a powerful structural protection against regulatory overreach -- the government would be destroying its own asset value.

Phase 2: Business Quality Analysis

The Monopoly: Why Zurich Airport is Irreplaceable

Zurich Airport is Switzerland's primary international gateway. No second major airport can be built in the Zurich metropolitan area -- the land, environmental permits, political will, and infrastructure required make it structurally impossible. This is the purest form of "efficient scale" moat.

Key monopoly characteristics:

31+ million passengers annually -- Switzerland's busiest airport by far
Only hub for SWISS International Air Lines (Lufthansa subsidiary)
80% of Switzerland's intercontinental flights depart from Zurich
Gateway to the Swiss economy -- banking, pharma, luxury, tourism all depend on connectivity
270,000+ flights per year with 80% seat load factors

Revenue Model: Hybrid Till

The genius of the hybrid-till model is that Flughafen Zurich captures both the regulated and unregulated economics of an airport:

Regulated (50-60% of revenue): Landing fees, passenger charges, noise/emission surcharges. These are set by the Federal Office of Civil Aviation (FOCA) and provide predictable, inflation-linked revenue. The regulation allows a fair return on invested capital.

Unregulated (40-50% of revenue): This is where the magic happens.

The Circle -- A massive mixed-use real estate development adjacent to the airport. 90%+ occupancy, 49 companies, 5,000+ employees. Real estate revenue hit a record CHF 197M in 2024.
Retail & F&B -- Captive audience of 31M+ passengers spending in duty-free, restaurants, shops
Parking -- Premium-priced airport parking
International airports -- Growing revenue from 10 airports in Latin America and India

International Expansion Strategy

Flughafen Zurich is not just a domestic airport operator. Through Zurich Airport International AG (ZAIA), it operates:

Airport(s)	Country	Status
Florianopolis, Vitoria, Macae, Natal	Brazil	100% owned, operational
Belo Horizonte	Brazil	Minority stake
2 airports	Chile	Operational
1 airport	Colombia	Operational
1 airport	Curacao	Operational
Noida International Airport	India	40-year concession, opening 2025

The Noida Airport is the crown jewel: a greenfield airport serving the Delhi NCR region (population 30M+), with Phase 1 capacity of 12M passengers. This is a long-duration growth asset in one of the world's fastest-growing aviation markets.

Financial Quality: The Numbers Tell the Story

Pre-COVID (2019) vs Today (2024):

Metric	2019	2024	Change
Revenue	CHF 1,210M	CHF 1,326M	+9.6%
EBITDA	CHF 642M	CHF 733M	+14.2%
Net Income	CHF 309M	CHF 327M	+5.8%
EBITDA Margin	53.0%	55.3%	+2.3pp
Passengers	31.5M	~31M	-1.6%

The business is generating higher revenue and significantly higher EBITDA on roughly the same passenger volume. This is the power of non-aviation revenue growth (The Circle, real estate, international) -- the airport is extracting more value per passenger.

Phase 3: Moat Assessment

Moat Type: WIDE -- Natural Monopoly (Efficient Scale)

Moat Width: WIDE Moat Trend: STABLE to WIDENING Estimated Durability: 30+ years

The moat here is as durable as any in our portfolio:

Physical Impossibility of Competition: You cannot build another major airport serving Zurich. The land isn't available, the permits would never be granted, and the economics don't support a second airport for a metro area of ~1.8M people.
Regulatory Protection: Airport operations require government concessions. Flughafen Zurich's concession is effectively perpetual -- the Canton of Zurich owns 33.3% of the company and has every incentive to maintain its monopoly.
Network Effects in Aviation: Airlines choose hubs based on connecting traffic. Once SWISS/Lufthansa established Zurich as a hub, the connecting passenger base (29% of all passengers) creates a self-reinforcing network.
Real Estate Development: The Circle and other airport-adjacent real estate capture land value that cannot be replicated. The airport's location -- at the intersection of road, rail, and air transport -- is uniquely valuable.
International Know-How: Operating 10+ airports internationally creates a competitive advantage in winning new concessions. The Noida win demonstrated this -- Zurich Airport was chosen over global competitors.

Moat Risk

The primary moat risk is regulatory: the Swiss government could change the regulatory framework for airport charges, compress margins, or impose restrictions that reduce the airport's earning power. However, the government's 38.4% combined ownership stake (Canton + City) strongly mitigates this risk.

Phase 4: Management Assessment

CEO: Lukas Brosi (since 2023)

Lukas Brosi rose through the ranks at Flughafen Zurich -- Head of Financial Services (2013-2017), CFO (2017-2023), then CEO. This insider promotion signals continuity and deep operational knowledge.

Capital Allocation Track Record:

Maintained balance sheet strength through COVID without equity dilution
Prudent leverage management (1.6x leverage ratio)
Growing dividend policy with flexibility (50% standard, up to 75% with low leverage)
International expansion has been disciplined -- concession wins in growing markets

Board & Ownership

The ownership structure is unusual and strategically important:

Shareholder	Stake	Role
Canton of Zurich	33.3%	Major shareholder + regulator
City of Zurich	5.05%	Major shareholder
Free float	~61.6%	Institutional + retail

The government ownership provides a unique alignment of interests: the regulator is also the largest shareholder. This creates a natural floor on regulatory aggression -- the Canton would destroy its own investment by over-regulating.

Board composition: 4 women, 4 men. Average tenure 8 years, average age 63. Includes government-appointed representatives -- 3 from Canton, 1 from City.

Phase 5: Valuation

Current Valuation Assessment

At CHF 261, Flughafen Zurich trades at:

Metric	Value	Assessment
P/E (TTM)	23.8x	At upper end of historical range
EV/EBITDA	12.6x	Reasonable for infrastructure
P/B	2.72	Modest premium to book
FCF Yield	0.9%	Very low due to capex cycle
Dividend Yield	2.2%	Moderate

DCF Valuation

Assumptions:

Base year FCF: Use normalized FCF of ~CHF 300M (average of 2022-2023, excluding heavy capex years)
Growth Rate 1-5 years: 4% (passenger growth + pricing)
Growth Rate 6-10 years: 3% (mature infrastructure)
Terminal Growth: 2% (GDP-linked)
Discount Rate: 7.5% (low-beta infrastructure)

DCF Result: CHF 235-265 per share

Earnings-Based Valuation

Normalized EPS: ~CHF 11 (2024 run-rate)

At 20x (reasonable for monopoly infrastructure): CHF 220
At 22x (average): CHF 242
At 25x (premium for monopoly quality): CHF 275

Fair Value Range: CHF 230-270

At CHF 261, the stock is at the upper end of fair value. No margin of safety exists.

Private Market Valuation

Airport concessions globally trade at 15-20x EBITDA in private markets (as seen in Vinci/ADP/Changi transactions). At 18x EBITDA: CHF 733M x 18 = CHF 13.2B EV, minus net debt CHF 1.4B = CHF 11.8B equity = CHF 384/share. This suggests significant takeover premium potential, but a public-market takeover is unlikely given government ownership.

Phase 6: Klarman Lens

Downside Case

In the bear case, a recession reduces passenger volumes by 15-20%, international expansion (particularly Noida) disappoints, and noise regulations tighten. Revenue falls to CHF 1.1B, EBITDA to CHF 550M, and the stock de-rates to 17x earnings. This yields a price of ~CHF 150-170, representing a ~35-40% drawdown.

Why the Market Could Be Wrong (Bull Case)

The market may be undervaluing the international expansion optionality. Noida International Airport alone, serving the Delhi NCR region, could eventually handle 70M+ passengers per year at full build-out. If India's aviation market grows at 8-10% annually (as projected), this single concession could be worth CHF 2-3B over its 40-year life. Currently, the international business is only CHF 131M in revenue -- a small fraction of the group.

Why the Market Could Be Right

The stock is near all-time highs for good reason. Record earnings, resolved political risks (runway vote), and a growing dividend all support the current valuation. The market is correctly pricing a high-quality monopoly with limited growth (3-5% revenue CAGR from the domestic airport). The premium valuation leaves no room for disappointment.

Catalysts for Entry

Global recession reducing air travel and compressing earnings
Noida construction delays or overruns spooking investors
Broad European market correction dragging down infrastructure stocks
Regulatory negative surprise on airport charges
Increased capex guidance suppressing near-term FCF further

Phase 7: Conclusion

Flughafen Zurich is among the highest-quality infrastructure assets in Europe -- a natural monopoly with 55% EBITDA margins, a conservative balance sheet, aligned government ownership, and long-duration growth from international expansion. The ROE of 11.6% technically fails the Buffett 15% test, but this is misleading: the business is in a heavy capex investment phase (Noida, runway extension, The Circle), and normalized returns on incremental capital are strong.

However, the stock is priced for perfection at CHF 261. There is no margin of safety at current levels. The Buffett screen score of 75 reflects genuine quality, but quality without a good price is not a good investment.

This is a business to own at the right price. We add it to the WAIT list with an accumulation zone of CHF 185-220, which would correspond to 17-20x normalized earnings and offer a 15-25% margin of safety. A Strong Buy below CHF 185 would provide the 30%+ discount that Klarman demands.

The beauty of airport stocks is that they are inherently cyclical -- pandemics, recessions, and political shocks regularly create 25-40% drawdowns in these otherwise stable monopolies. Patience will be rewarded.

"Price is what you pay, value is what you get. Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down." -- Warren Buffett