ASPAC & ME airport rev 60% down in Q2; ‘cautious’ optimism on recovery

By Luke Barras-hill |

ACI Asia-Pacific says airports across the regions continue to suffer ‘economically unsustainable’ revenue’ levels.

The financial margins of airports across Asia Pacific and the Middle East ‘continue to remain far below pre-pandemic levels’ despite more encouraging optics, Airports Council International (ACI) Asia-Pacific has reported.

In its industry outlook for Q2 (April to June), the association says quarterly revenues were 60% below that of 2019 – a similar level compared with 2021 – as airports suffer large operating losses.

Airports across the regions are also dealing with the risk of labour force deficits, although to a lesser extent versus Europe and other parts of the world.

This is not just limited to airports, but to the wider aviation ecosystem including airlines, government agencies, ground handling, security and check-in, ACI Asia-Pacific continues.

Notwithstanding this, a ‘cautious sense of optimism’ surrounds the recovery of the aviation sector in Asia Pacific and the Middle East following positive indicators recorded during the quarter.

The association cites strong pent-up demand for air travel – particularly in the leisure segment – as a result of eased travel restrictions and successful vaccination regimes in some areas of the regions.

International seat capacity -59%

Cambodia, Singapore, India, Thailand, Malaysia and Australia are among the countries to have relaxed curbs on international air travel during the quarter.

Statistics from key hubs in the countries reveal that in aggregate, passenger traffic rose substantially between the end of February and early July 2022, though Asia Pacific is expected to witness the slowest recovery versus other parts of the world in 2022 to reach 62% of 2019 passenger traffic levels.

South Asia (Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka, Maldives, Afghanistan) and the Middle East (Bahrain, Kuwait, Oman, Saudi Arabia, UAE, Iraq, Iran, Jordan, Yemen and Qatar) have recovered to approximately 85% of Q2 2019 seat capacity.

Emerging East Asia (China, Mongolia and the Democratic People’s Republic of Korea) have reached just 15% of 2019’s Q2 level due to China’s zero-Covid policy combined with renewed lockdowns.

Most East Asian countries are heavily dependent on Chinese passengers.

The above is a contrast to a first quarter marked by rigid travel restrictions, geopolitical conflict and the suspension of air travel in some countries.

The association goes on to caution on prevailing headwinds, including instability in Eastern Europe and a volatile global macroeconomic picture resulting in heightened inflation, rising energy prices and disruptions across supply chains.

While Q2 scheduled domestic seat capacity recovered to 89% of pre-pandemic levels versus the same quarter in 2019, international seat capacity fell by 59% linked to travel restrictions, quarantine and testing, notably in China and parts of Japan.

Total domestic seat capacity is expected to exceed 2019 levels by Q3 2022, with the overall traffic for the year 2022 likely to be on par with 2019 levels.

ACI Asia-Pacific Director General Stefano Baronci (right), commented: “As a result of a successful vaccination campaign that covers an average of 74% of the population across the region, travel restrictions are being gradually phased out across the region, fuelling strong demand for air travel.

“Though 2022 looks to be a more positive year for the sector, there will be bumps in our road to recovery especially in consideration of the uncertain macroeconomic scenario.”

The association says it is urging regulators to work closely with the industry to enhance manpower and operations and harmonise health protocols to smooth the travel experience

“ACI Asia-Pacific will continue to work with our members to help the industry build back stronger,” he added.

The Americas

Details emerge of JFK T1 commercial programme and duty free tender

Qualified travel retail operators are being invited to participate in a request for proposals...

Europe

Mondelez WTR launches Win a Diamond pop-up with Lagardère at CDG

Mondelez World Travel Retail (WTR) has unveiled an enhanced iteration of its Win a Diamond...

Middle East

JEDCO launches multi-category tenders at KAIA T1

Jeddah Airports Company (JEDCO KSA) has issued a request for proposals for several...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend