ACI Europe has warned that an estimated 193 airports, which represent 277,000 jobs and €12.4 billion/$16 billion of European GDP combined, face insolvency in the coming months if passenger traffic does not start to recover by the year end.
The threat of airport closure means Europe faces the potential collapse of a significant part of its air transport system, ‘unless Governments step up to provide the required support’, said ACI. “So far, few have done so.”
Data published on 27 October shows a year-on-year decrease of 73% in passenger traffic at Europe’s airports for the month of September; the loss of an additional 172.5m passengers bringing the total volume of lost passengers since January 2020 to 1.29bn.
And as of mid-October, passenger traffic was down -75% from the same period last year, reaching an 80% decrease for airports in the EU/EEA/Switzerland/UK footprint.
The permanence of severe restrictions to cross-border travel into the Winter season has considerably worsened the traffic outlook, as reflected in ACI Europe’s latest forecast. Many airlines have slashed their capacity plans for the reminder of the year and into 20212.
REGIONAL AIRPORTS: INTEGRAL TO LOCAL COMMUNITIES
The airports facing insolvency are mainly regional airports which serve – and are integral to – local communities and the potential ripple-effect upon local employment and economies is clear, said ACI.
Financial support from Government will be crucial in averting ‘rising geographic inequality and damaged social cohesion’, said ACI.
At the same time, larger European airports and hubs are not immune from the critical financial risk.
“They have cut costs to the bone and have resorted to the financial markets to shore up balance sheets and build emergency war chests,” emphasised ACI.
TESTING OVER QUARANTINE
This sudden increase in debt – an additional €16bn for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year. This, along with the fact that these airports had to make thousands of highly skilled workers redundant, clearly jeopardises their future.
London Heathrow Airport reported another dramatic retail revenue decline of -63.2% in the first nine months of this calendar year, as passenger numbers remain historically low, whilst retail revenue per passenger increased 18.1% to £10.38 over the same period; up from £8.79 in 2019.
“Britain is falling behind because we’ve been too slow to embrace passenger testing,” said Heathrow CEO John Holland-Kaye. “European leaders acted quicker and now their economies are reaping the benefits.
Olivier Jankovec, Director General of ACI Europe, added his comments: “In the midst of a second wave, ensuring safe air travel continues to be our primary concern. It’s crucial that we reduce the risks of importation and dissemination as much as possible. But surely we can do a much better job of reducing those risks by testing air passengers rather than with quarantines that cannot be enforced.”
“The figures published today [27 October] paint a dramatically bleak picture. Eight months into the crisis, all of Europe’s airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs.
“Governments’ current imposition of quarantines rather than testing is bringing Europe’s airports closer to the brink with every day that passes.”