The Airports Council International (ACI) Asia-Pacific has warned that prolonged duration of COVID-19 outbreak will significantly set back the region’s airports as passenger traffic volumes are down -24% for the first quarter of 2020. China, Hong Kong and South Korea have suffered sizeable losses in traffic volumes and sharp spike in COVID-19 cases in West Asia is also expected to significantly impact traffic downwards by -4.2%.
The sharp decline in traffic and passengers is causing a major dip in airports’ aeronautical and non-aeronautical revenues with projected revenue loss of $3 billion, it said in a report released on Monday. Shortfall in air traffic leads to reduced revenues from airport charges such as landing and parking charges paid by airlines, passenger service and security charges paid by passengers.
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“Unlike airlines, which can choose to cancel flights or relocate their aircraft to other markets to reduce operating costs, airport operators have immovable assets that cannot be closed down. They are faced with immediate cash flow pressures with limited ability to reduce fixed costs and few resources to fund capacity expansion efforts for longer-term future growth,” said Stefano Baronci, Director General of ACI Asia-Pacific.
“Situation is worse for privately-held airports as they do not benefit from the relief measures but are obliged to continue paying concession fee to governments. Therefore, severity of the current situation requires a close cooperation between airport operators and policy stakeholders to identify options to tackle the crisis,” he said.
Asia manages more than 50% of super-congested airports in the world and will require to build the large majority of greenfield airports globally. Hence, proposals to reduce airport charges or to freeze the application of 80/20 rule on airport slots globally should not be supported without passing an economic feasibility test, observed the DG.
Mr. Baronci said the proposal for a global suspension of 80/20 usage recently made by the International Air Transport Association (IATA) would give airlines the freedom to cancel flights to/from congested airports -- not necessarily linked to COVID-19 outbreak.
“While we are sympathetic with the airlines’ needs to avoid flying empty airplanes simply to retain airport slots, it should not jeopardise connectivity of passengers and distort the competitive field. We favour an evidence-based market-by-market review evaluating rates of infection, load and scheduled bookings,” he said.
The feasibility of relaxation of the 80/20 rule to a lower threshold or a calculation of the historic rights for airlines based on a shorter period through their respective associations should be explored, concluded the Director General .
