European airports’ debt ‘hindering vital investment’

Europe’s airports face a cash crunch with mounting debt and a lack of investment capital, and the costs of flying need to rise for them to meet decarbonisation targets.

That is according to Olivier Jankovec, director general of airports association ACI Europe, who noted member airports’ debt hit €135 billion last year, 27% up on 2019.

Jankovec told the association’s annual congress in Athens that while airports’ costs “reached €41 billion, up 24% on 2019”, the €32 billion raised in revenue from ‘user charges’ on airlines remained 1% below 2019 levels adjusted for inflation.

He noted maintenance costs had risen by 49% per passenger since 2019 and energy and utility costs by 37% and said: “Our investment needs stand at €360 billion by 2040.”

Jankovec argued: “Many airports need to embark on new investment to meet mounting operational pressures stemming from the traffic recovery – upgrading airport facilities, building operational resilience and expanding capacity where needed.”

This needed to happen alongside investment in sustainability, he added, warning the cost of decarbonising European aviation “has soared since 2017” and will “increase the cost of flying” and drive “structurally slower passenger growth”.

He said: “Slower traffic growth and inflationary cost pressures will require increasing airport revenues, including user charges.”

Jankovec insisted that was a message “national regulators need to hear loud and clear”, adding: “Airports must prepare for more traffic volatility and slower growth compared to what we’ve been used to.”

He suggested there is a need “to rethink the fundamentals of the airport business model”, arguing: “Our ability to invest remains dependent on volume growth, since market forces and regulators exercise a downward pressure on our user charges.”

A Boston Consulting Group study on ‘Pathways towards sustained value creation for Europe’s airports’, commissioned by ACI Europe, was presented at the congress. Managing director Gabriele Ferri warned that Europe’s airports face “mounting headwinds” from slowing traffic growth, intensifying operational and capital pressures, declining revenues, and environmental and regulatory constraints.