Budget carriers are dictating the fate of Europe’s regional airports as the aviation sector recovers from the pandemic.
The warning came from the head of the Airports Council International (ACI) Europe trade body as it called on airlines to pay a “fairer price” for the use of facilities.
Disparities in the pace and strength of recovery and continued financial challenges came despite the sector outperforming with a positive summer ahead.
Regional airports have kept outperforming other segments of the market since the start of the year, having recovered almost 93% of pre-pandemic 2019 passenger volumes – compared to 87% for hubs and other larger airports, according to the organisation.
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This reflects traffic still driven by leisure and VFR (visiting friends and relatives) demand, boosted by the expansion of ultra-low cost carriers and predominantly relying on the intra-European, North African and transatlantic markets.
Achieving financial viability has always been a challenge for smaller regional airports due to a number of structural issues, including traffic seasonality and demand imbalance across the year, as well as higher fixed costs and the lack of economies of scale achieved by larger airports, according to ACI Europe.
“But the massive losses accumulated during the pandemic, coupled with the renewed airline buyer power which results in suboptimal revenues from user charges mean prospects for improved financial viability are murky – especially for airports with less than one million passengers per year,” a statement said.
Speaking as the 14th annual regional airports conference opened in Crete, ACI Europe director general Olivier Jankovec said: “The summer season looks very positive for regional airports overall as they are seeing airline seat capacity just above pre-pandemic levels – which is not yet the case for larger airports.
“Passenger demand keeps defying inflationary pressures, in particular record increases in air fares.
“At the same time, disruption risks across the aviation eco-system have receded. This is the result of earlier planning, massive recruitment and improved wages – although air traffic management capacity and social unrest remain a significant concern in some countries.”
But Jankovec cautioned over “significant gaps” in performance both across national markets and individual airports.
“The traffic recovery has come with more volatility and also more disparity,” he warned.
“This is largely down to much increased airport competition on a pan-European level, as the market is shifting towards fewer and ever more powerful airlines – with low-cost carriers now very much dictating the fate of regional airports.
“User charges levied by regional airports have been consistently decreasing over the past three years and today, in real inflation-adjusted terms are 13.4% lower than in 2019. Meanwhile airline fares have increased by +26% so far this year.
“This is not sustainable moving forward – especially given how the current inflationary environment and interest rate rises are weighing on our costs.
“What is at stake is the ability of airports to keep investing in sustainability, digitalisation and capacity. And while we will need to keep the flexibilities afforded by current EU state aid rules, we also need airlines to pay a fairer price for the use of our facilities.”
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