European airports revise their recovery estimate

Photo: (Mick Dodsworth)

The airport representative body, ACI Europe, announced on July 16 that passenger traffic across the European airport network in June was 93% down compared to the same period last year. It described that results as: “A marginal improvement over the previous month (May 2020 = -98%). Europe’s airports only handled approximately 16.8 million passengers in June, compared to 240 million in June 2019.

The Council said the increase over the preceding month “reflects the progressive lifting of travel restrictions within the EU and Schengen area.”

While the numbers are small compared to the 8 million accommodated in June of last year, ACI did note an almost threefold increase in daily passenger numbers during the month. The figure of 267,000 recorded on June 1 had risen to 757,000 by June 30.
Olivier Jankovec, director general of ACI Europe said: “The recovery in passenger traffic is proceeding at a slower pace than we had hoped for. This was the case in June, and initial data for July also indicates we’re likely to recover only 19% of last year’s traffic rather than the 30% we had forecast. This is down to the still incomplete lifting of travel restrictions within the EU / Schengen area and the UK – as well as the permanence of travel bans for most other countries. The fact that EU and Schengen states have not yet managed to effectively coordinate and align over their travel policies does not help, as it is not conducive to restoring confidence in travel and tourism in the middle of the peak Summer season.”

Following a study of the results and the current international medical advice, ACI Europe issued its revised traffic forecast1. It now believes that a full recovery in passenger traffic to 2019 levels is now expected for 2024, rather than 2023 as was predicted in its May 2020 forecast.

As a result, it said that Europe’s airports will serve 1.57 billion fewer passengers in 2020, a decrease of -64% compared to 2019 and this, in turn, means that their collective revenue will decrease by €32.4 billion in 2020 (-67%).

It also noted that even the relatively few reinstated flights are currently achieving generally low load factors.

This provides something of a ‘double whammy’ for airports, as their operating costs are driven by aircraft movements while the bulk (76%) of their revenues comes from passengers (e.g. through passenger charges and commercial revenues such as retail). This, ACI Europe said “means that the current recovery pattern disproportionately increases costs relative to revenues.”

Mr Jankovec commented: “The financial situation of airports is not significantly improving – with some even making more losses now compared to their situation prior to the restart. Considering that the peak Summer season normally accounts for a large share of annual revenues and the fact that temporary unemployment schemes are coming to an end in many EU States – not to mention fierce airline pressure on airport charges – liquidity will remain an on-going concern through the winter. Many airports, especially smaller regional airports, will need financial relief. This requires looking beyond the current EC Temporary Framework on State aid which is ending next December.”

1View the ACI Europe updated estimates of COVID-19 traffic & revenue impacts here.