LEADERSHIP
Challenging times
How are Europe’s airports faring one year and counting on from the outbreak of COVID-19? ACI EUROPE’s director general, Olivier Jankovec, provides a progress report.
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lthough far from alone in suffering from the impact of COVID-19, the past 17 months has been a period like no other for Europe’s airports, which have faced a near total collapse of air traffic and connectivity, bringing with it very harsh economic consequences. In fact, Europe is the world region where the passenger traffic decrease has been the harshest, and where the recovery, to date, has also been the slowest. This is down to the combination of extremely restrictive travel policies enacted by our governments in a totally uncoordinated manner, and the fact that domestic markets – which have been more resilient – are comparatively smaller in Europe compared to North America and Asia for instance. With the epidemiological situation now firmly improving across our continent thanks to vaccination programmes, we can finally see light at the end of the tunnel. EU States in particular are easing travel restrictions and implementing common and interoperable digital health certificates, which should effectively allow vaccinated people and those having recovered from COVID-19 to travel without hindrance. The UK, however, is lagging behind, maintaining restrictions which are no longer risk-based nor warranted by where the country itself and the rest of Europe now stand in terms of their epidemiological situation. At the same time, the medium to longer-term impacts of the COVID-19 pandemic on our industry are becoming clearer. While we are all talking about and longing for the recovery, it is actually a word that does not fit with what lies ahead.
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AIRPORT WORLD/ISSUE 3, 2021
Recovering means going to back to the status quo ante. This is not what will happen with this crisis. We will, of course, go back to pre-pandemic passenger traffic levels at some point – 2025 based on our latest forecast for Europe’s airports. But for the rest, the aviation market that will emerge from the pandemic will be structurally very different, and airports – along with the rest of the aviation sector – will be facing renewed challenges. Looking at our European aviation market first, the damage caused by the pandemic is unprecedented. But what is making this even more difficult to overcome for airports is the way in which governments have reacted. By and large, European governments have chosen to focus their financial support on their national airlines, leaving airports and the rest of the aviation ecosystem in a precarious situation. Simply put, Europe’s airlines have so far received more than €34 billion in direct financial support, while Europe’s airports only got €2 billion. This is creating massive imbalances in our largely integrated European aviation market. The generous aid granted to airlines has not trickled down to airports, which now find themselves in a situation of systemic financial weakness. The situation has led to the debt load of Europe’s airports increasing by a massive €20 billion in just a year, and this is effectively what is allowing most of them to keep going and finance current operations. At the same time, the recovery will not instantly improve their financial standing – as it will initially be cash intensive (scaling up facilities and resources to accommodate traffic peaks) and revenue weak. As a result, Europe’s airports are now facing an investment crunch – with AlixPartners estimating that revenues will remain insufficient to
