SPECIAL REPORT: ECONOMICS & FINANCE
Industry outlook – past, present and future ACI World’s vice president for economics, Patrick Lucas, considers the impact COVID has had on the finances of the world’s airports and the economic challenges ahead.
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very couple of years ACI World, and its industry partners under the umbrella of the Air Transport Action Group (ATAG), release the Aviation: Benefits Beyond Borders report, a publication that quantifies aviation’s socio-economic impact. Typically, the team of economists tasked with analysing aviation’s multiplier divide this ecosystem into four interrelated parts that measure the direct, indirect, induced and catalytic impacts on economies. In better times, the direct impact from airlines, airports, air navigation service providers and civil aerospace was comparable to the GDP of Indonesia or the Netherlands. Thus, with as much as 57% of tourist arrivals coming by air in pre-pandemic times, it is not surprising to observe aviation’s positive impact and its interconnection to a vast array of industries and the broader economy in terms of wealth and job creation. After all, at its core, aviation connects people, commerce and cultures. In terms of job creation that is ‘directly’ related to the aviation sector, jobs with airport operators and on the actual airport site make up the largest share. Historically speaking, this has always been in the realm of 55%-60%. Beyond the employees working for airport operators or airlines, many of these jobs are in duty free, retail, car rental, maintenance and other government related services. Of all the sectors within this ecosystem, the largest impact was felt by those working on the airport site during the COVID-19 crisis. With travel coming to a halt in 2020 due to government-imposed lockdowns and travel restrictions aimed at curbing the spread of the virus, the ecosystem experienced the multiplier effect in complete reverse, devastating not only the direct aviation operators but also booking agents, hotels, museums, cultural events and so on.
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AIRPORT WORLD/ISSUE 6, 2021
After considering the interconnections across multiple sectors, this ripple effect and resultant catalytic impact from the collapse in passenger traffic saw employment drop by 50% in 2021 as compared to 2019. A loss of $1.7 trillion aviation supported economic activity is also estimated in 2021 relative to the pre-pandemic scenario. As engines of socio-economic growth, airports are indispensable to the markets and communities they serve in support of a global recovery.
infrastructure Fig.1 – The socio-economic multiplier of aviation and airport ! (pre COVID-19) & ( ( '# )*- "
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Source: Aviation: Benefits beyond Borders (2020), Air Transport Action Group (ATAG); 2018 data.
The impact of the pandemic on airport traffic The crisis removed almost six billion passengers by the end of 2020 compared to the projected baseline (pre-COVID-19 forecast for 2020), representing a decline of 62% of global passenger traffic. Despite the resumption of air travel in 2021, many international markets remained suppressed with declines of 60% compared to the months of September and October in 2019.
