Routes and Airports Channel

European airports confront challenges of industry downturn

By Sandra Arnoult
ATW's Airports Today, July, 2009, p.3

As passenger traffic continues a downward trend, airports must deal with the immediate impact while not losing sight of the need to plan for long-term growth. That was the consensus at the ACI-Europe Annual Assembly and Conference in Manchester in June.

"Air traffic is likely to remain depressed in the coming months, due to very weak passenger demand, without even considering the risk associated with swine flu or further increases in oil prices," said ACI-Europe DG Olivier Jankovec. "Airports get a special double whammy." ACI-Europe is forecasting an 8% decrease in passenger traffic and a 16% drop in freight for the full year.

He noted that commercial and aeronautical revenues will continue to decline as there are fewer flights and fewer passengers. "For a capital-intensive business like ours, which is increasingly reliant on capital markets, this is far from neutral," he said. "Profitability is shrinking and there will be losses this year in the sector."

Airports, however, are not "standing still" and are trying to make their own market locations more competitive, Jankovec said. "As economies will recover, so will demand for air services. Despite the crisis, experts still expect Europe to face an airport capacity crunch by 2030. Investing in future capacity must remain a priority."

North American airports also have felt the impact of the economic downturn and as a result service has been cut at many, ACI-North America President Greg Principato noted. While traffic is down, airports still must plan to invest in infrastructure projects, he said. "Runways, terminals, taxiways and most airport projects in general take five or ten years to build. Unless airports plan now, it will be difficult to prevent passenger delays when traffic returns."

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