Spain’s airport operator AENA has announced it has negotiated payment deferrals for commercial operators worth €18.6 million/$21.8 million as it strives to preserve the value of contracts.

Companies delivering services across its airports network will benefit from payment deferrals worth a total of €83.6m/$98.0m, including €65m for airlines.

The measures have been implemented to mitigate against operational damage caused by the coronavirus (Covid-19).

Commercial contracts are also being negotiated and could result in a ‘number of changes in contractual conditions’ such as lease lengths and a potential reduction in minimum annual guarantee rents tied to the country’s now-ended ‘state of emergency’ period (March-June).

MAG INCOME CONSIDERED

Income from minimum annual guarantees (based on IFRS 16 – leases) covering the state of emergency period totalled €198.6m and will form part of negotiations with airport concessionaires ‘to maintain the value of the contracts and also tailor them to the current situation’, stipulates AENA.

The update comes as AENA revealed results for the six months between January to June, with commercial & real estate income down -21% year-on-year to €124.4m.

As reported in March, AENA took a number of actions to manage and protect its concessions business and preserve liquidity, including waiving rent payments from commercial leaseholders.

Dufry Group runs duty free concessions at 25 airports in Spain and renewed its leases with AENA In September.

Passenger numbers dropped by 66% to 43.5 million in the first half of the year.

Including contributions from London Luton Airport – where it holds a 51% shareholding – and its six Brazil airports, AENA passenger volumes dropped by 65% year-on-year to 50.2 million.

The decline in passenger traffic began in March and became progressively worse in the three months that followed, with falls of -99%.

Spain ended its state of emergency in June and with the gradual resumption of Schengen Area traffic upon the lifting of EU travel restrictions in late June to early July, traffic recovered in July to reach 3,000 operations on certain days of the month.

COSTS SAVINGS IN Q2

Consolidated total income suffered a 47% decline year-on-year to €1,112.4m, with gross operating profit down by 82.2% to €211.4m. This includes €6m from the Luton Airport consolidation and €77.6m in net gains from AENA Brazil.

Net profit nosedived by 130.5% compared to the same period year-on-year to €170.7m. Net financial debt fell by €11.1m to €6,661.7m compared to €6,672.8m at the end of 2019.

The airport operator boasts cash and credit facilities of €2,894m and has the option of issuing up to €900m through the Euro Commercial Paper programme, of which €525m is available.

It has also reorganised its airports to tailor facilities to existing capacity levels, implemented a cost savings plan and halted investment. In the second quarter, this resulted in savings of €157.1m.

On 30 June, AENA’s Board of Directors decided to host the Ordinary General Shareholders’ meeting on 29 October and proposed that dividends applicable to 2019 results should be allocated to voluntary reserves rather than be distributed.

AENA has estimated an investment of €352m this year having restarted its investment plan.

As reported, the UK government has removed Spain from its list of travel corridors, meaning all arrivals will now have to quarantine for 14 days. The Foreign and Commonwealth Office has advised against all non-essential travel to Spain, including the Balearic and Canary Islands, after a spike in Covid-19 cases in recent weeks.

All images courtesy of AENA.