ACI World urges Asia-Pacific and Middle East governments to step up economic support as revenue is wiped out

(Photo: KEY Steve Fletcher)

Airports Council International (ACI) World’s updated (May 5) economic impact assessment forecasts a year-end revenue loss of -59% for Asia-Pacific airports and -53% for Middle East airports. It says that combined, airports in these regions are forecasted to lose US$36.4 billion for the full year 2020. For both Asia-Pacific and the Middle East, this means 10% more losses than forecasted one month ago. This outcome is the result of a significant drop in passenger traffic with the two regions jointly standing to lose two billion passengers, about 400 million more passengers than previously forecasted.

Stefano Baronci, director general, ACI Asia-Pacific, said: “We are observing moderate signs of recovery in China’s domestic traffic, which is encouraging. But we are entering the most critical stage of the year for our industry. We expect the second quarter of the year to be substantially more challenging than the first quarter, especially in countries with predominantly international traffic profiles. Rebuilding people’s confidence to travel again will take time.”

ACI said its preliminary traffic data for April from 26 airports in the Asia-Pacific and Middle East areas confirms the current challenges and negative trends faced by the region’s airports. It said that, on aggregate, the traffic at these airports remain rock bottom, recording a year-on-year traffic decline of -92% in the four weeks of April.

ACI Asia-Pacific said it welcomed efforts by governments in the region who have provided relief packages to the aviation industry as a whole and airports in particular. However, in light of the updated financial forecasts, the airport association is calling on governments to introduce additional relief packages including:

  • taxation relief, including alleviation of payroll taxes, corporate taxes, concession fees waivers or other government incomes from the industry
  • loans, loan guarantees or direct support to maintain financial liquidity across the aviation ecosystem.

Mr Baronci added: “With concrete data in hand for the rest of the year, it is evident that airports will struggle to survive. Governments in Asia Pacific and the Middle East need to do more. ACI Asia-Pacific encourages governments in both regions to look at other competitive markets, such as the US which has pledged US$10 billion in rescue funds to airports or Brazil which has allowed for the deferment of airport concession fee payments by airport operators until the end of the year.”

(All data: ACI World)