The COVID-19 pandemic is an “existential threat” to the airport business and is predicted to wipe out two-fifths of global passenger traffic and almost half of revenues for airports in 2020, according to an economic analysis by Airports Council International (ACI) World.
In an economic bulletin published April 1, ACI World predicts that close to two-fifths (38.1%) of global passenger traffic will be lost as compared to the forecasted pre-COVID-19 figure. This is equivalent to a reduction of 3.6 billion passengers in absolute terms.
Asia-Pacific airports are seen to be the biggest losers with estimated passenger traffic loss of 42.1% for full-year 2020 compared to the pre-COVID-19 forecast. This is followed by North America (-37.7%), the Middle East (-36.5%), and Europe (-35.0%).
For the first quarter of 2020 airports in all regions are estimated to lose passenger traffic also at double-digit rates. Asia-Pacific again appears to be the most affected region with an estimated -38.9% loss in passenger traffic for the first three months of the year, followed by Europe (-23.9%) and North America (-20.7%).
“The global airport industry has faced multi-billion-dollar losses already in the first quarter of 2020, but it is now predicted that the impact of COVID-19 will extend not only to the second quarter of 2020 but also the second half of the year,” said the ACI analysis.
“Most experts in the air transport industry agree that recovery may take a year to 18 months to reach pre-crisis traffic levels and the industry may not record pre-COVID-19 traffic volumes again before the end of 2021.”
And while the industry had been expected to generate about US$172 billion in revenue for 2020 pre-crisis, it is now predicted it could lose about 45% or more than $76 billion by the end of this year.
Regionally, North America is forecast to lose 49% of its revenue in 2020, followed by Asia-Pacific (-48%), Middle East (-43%), and Europe (-42%).
“A drastic decline of such magnitude for the global airport industry represents an existential threat,” ACI World director general Angela Gittens said.
“A swift, effective and equitable economic policy response from governments is needed to protect millions of jobs, protect essential operations, and give the industry the greatest chance to weather the storm and recover quickly.”
As revenues continue to contract rapidly, airports are taking all possible measures to preserve financial stability by reducing to a minimum variable costs by closing portions of infrastructure, postponing capital expenditure, and addressing staffing costs.
“These difficult decisions are not taken lightly but are necessary in response to the crisis facing the industry,” said ACI further.
As regards prospects for recovery, ACI believes it is reasonable to foresee faster recovery in domestic passenger traffic.
“In the case of international passenger traffic, however, the recovery will take longer, as any international flight implies reciprocal permissions, while various states will emerge from the current crisis at different times with varying pace of relaxation of the recently imposed restrictions,” it said.
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