The head of European airports association ACI Europe has warned the airport business model has changed and can no longer depend on growth.
ACI Europe director general Olivier Jankovic reported “a massive increase” in airport debt, suggested “the jury is out” on post-pandemic changes in demand and warned of “disruption and volatility”.
He told the Airport Operators’ Association (AOA) conference in London last week: “We are in a new paradigm. We no longer have a licence to grow.
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“The jury is still out on how much demand has changed. Corporate traffic will increasingly be determined by sustainability considerations.
“Inflation is at record levels across Europe. Though it’s easing, it’s hitting consumer and business confidence. There is a lot of uncertainty. China re-opening, but we forecast a full recovery for Europe’s airports only in 2025.”
Jankovic forecast “more disruption and volatility going forward” and warned: “We are going to have manage more risk and more volatility with lower traffic growth.
He noted: “Europe’s airports lost €20 billion in 2020-21. There was no choice but to pile on debt. Now the recovery is cost heavy and revenue light.”
Jankovic added: “The second challenge is decarbonisation. We all face the existential threat of global warming. There are questions about our continuing access to finance. We have no choice but to pivot to a new model.”
London City Airport chief executive Robert Sinclair told the conference: “I fear corporates are making choices not to travel, not because [Microsoft] Teams is fantastic and not because of cost, but because of environmental commitments and cutting corporate travel is an easy way to do that.
“We’ve seen banks and the big-four accountancy firms set travel reduction targets. As an industry we need to be clear about the progress we’re making.”
Jankovic also noted a decline in connectivity at airports, reporting: “The recovery in connectivity is trailing the recovery in traffic.
“The network carriers have retrenched and are restraining capacity. They’re still planning capacity below what they offered in 2019.
“The low-cost carriers are the winners. They have younger fleets which give a hedge against fuel prices and have large fleet orders.
“Airline consolidation is on the cards but, for now, only by attrition.”
More: Heathrow to set out third runway plans ‘in next few months’
European airports report 21% shortfall in pre-Covid passengers