ACI estimates that 193 out of Europe’s 740 commercial airports in UK and Europe could go bust due to Covid collapse in air travel
Airports Council International Europe (ACI Europe) has said that due to the decline in demand for air travel caused by Covid, some 193 airports across Europe and the UK face insolvency in the coming months if air passenger traffic does not increase by the year end. The most vulnerable are small regional airports. There are claims for the number of jobs that could be lost, and the amount of GDP (for many European countries, aviation brings in money and tourists – while for the UK it takes both out). The airports and airlines want more government finance, to keep them going. ACI estimates that there were around 1.29 billion fewer air passengers, using European airports in the first 9 months of this year. It does not appear likely that winter tourism will provide much airline demand, with Covid restrictions in so many countries. Many airlines have slashed their capacity plans for the reminder of the year and into 2021. The larger airports have been cutting costs to the bone and resorted to the financial markets to shore up balance sheets. Airports are burning through cash to remain open. The increase in debt – an additional €16 billion for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year.
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Nearly 200 airports in UK and Europe could go bust due to collapse in air travel
Industry body says 193 of the continent’s 740 commercial airports face insolvency
By Rupert Neate @RupertNeate (The Guardian)
Tue 27 Oct 2020
Nearly 200 airports across the UK and Europe are at risk of going bust within months due to the dramatic collapse in air travel caused by the coronavirus pandemic, the European airports trade body warned on Tuesday.
Airports Council International Europe (ACI Europe), which represents airport operators, said it estimated that 193 out of Europe’s 740 commercial airports face “insolvency in the coming months if passenger traffic does not start to recover by the year-end”.
The trade body said the at-risk airports employed 277,000 people and generated collective annual revenues of €12.4bn (£11.2bn).
Olivier Jankovec, the director general of ACI Europe, said the figures “paint a dramatically bleak picture” for the future of the aviation industry, which has already suffered tens of thousands of job losses.
“Eight months into the crisis, all of Europe’s airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs,” Jankovec said. “Governments’ current imposition of quarantines rather than testing is bringing Europe’s airports closer to the brink with every day that passes.
“In the midst of a second wave, ensuring safe air travel continues to be our primary concern. It’s crucial that we reduce the risks of importation and dissemination as much as possible. But surely we can do a much better job of reducing those risks by testing air passengers rather than with quarantines that cannot be enforced.”
A spokeswoman for ACI Europe said the organisation would not name the airports at risk for fear of sparking panic among employees and travellers. However, she said most of the airports at greatest risk were small regional airports, which have seen the sharpest declines in passenger numbers. Airports across mainland Europe and all home nations in the UK are thought to be included on the list.
Passenger numbers at Europe’s airports in September fell by 75% compared with the same month year earlier. ACI Europe said total “lost passengers” since the pandemic began now stood at 1.3 billion.
While smaller airports are most at risk, ACI said “larger European airports and hubs are not immune from the critical financial risk”.
“They have cut costs to the bone and have resorted to the financial markets to shore up balance sheets and build emergency war chests. This sudden increase in debt – an additional €16bn for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year. This, along with the fact that these airports had to make thousands of highly skilled workers redundant, clearly jeopardises their future.”
The UK’s aviation regulator is reported to have warned the owners of Heathrow that it could be nationalised if they do not provide fresh funding to help it weather the pandemic.
The Civil Aviation Authority (CAA) said that without emergency cash from Heathrow’s shareholders, including the sovereign wealth funds of Singapore and Qatar, the airport may face a state takeover to save it from collapse.
In a consultation paper this month, the regulator said that it had considered Railtrack as a “relevant example” when objecting to Heathrow’s request to increase fees.
The nationalisation threat was reported by the Sunday Telegraph, although the CAA said the report was false.
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Almost 200 European airports facing insolvency in coming months
27 October 2020
By ACI
ACI EUROPE today warned of such fundamental risks to business continuity that an estimated 193 airports face insolvency in the coming months if passenger traffic does not start to recover by the year end. These airports between them facilitate 277 thousand jobs and €12.4 billion of European GDP.
The threat of airport closure means Europe faces the prospect of the collapse of a significant part of its air transport system – unless Governments step up to provide the required support. So far, few have done so.
Data published today shows:
A year-on-year decrease of 73% in passenger traffic at Europe’s airports in September
The loss of an additional 172.5 million passengers in September bringing the total volume of lost passengers since January 2020 to 1.29 billion
As of mid-October, passenger traffic stood at 75% down from the same period last year, reaching an 80% decrease for airports in the EU/EEA/Switzerland/UK footprint – a clear downward trajectory
The permanence of severe restrictions to cross border travel into the Winter season has considerably worsened the traffic outlook, as reflected in ACI EUROPE’s latest forecast1. Many airlines have slashed their capacity plans for the reminder of the year and into 20212.
The airports facing insolvency are mainly regional airports which serve – and are integral to – local communities. The potential ripple-effect upon local employment and economies is clear. Financial support from Government will be crucial in averting rising geographic inequality and damaged social cohesion. At the same time, larger European airports and hubs are not immune from the critical financial risk. They have cut costs to the bone and have resorted to the financial markets to shore up balance sheets and build emergency war chests. This sudden increase in debt – an additional €16 billion for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year. This, along with the fact that these airports had to make thousands of highly skilled workers redundant, clearly jeopardises their future.
Olivier Jankovec, Director General of ACI EUROPE, said “In the midst of a second wave, ensuring safe air travel continues to be our primary concern. It’s crucial that we reduce the risks of importation and dissemination as much as possible. But surely we can do a much better job of reducing those risks by testing air passengers rather than with quarantines that cannot be enforced.”
“The figures published today paint a dramatically bleak picture. 8 months into the crisis, all of Europe’s airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs. Governments’ current imposition of quarantines rather than testing is bringing Europe’s airports closer to the brink with every day that passes.”
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ACI EUROPE estimates of COVID-19 traffic and revenue impacts for European Airports
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Selection of airline capacity cuts announcements:
IAG slashes flight schedules as losses hit €1.3bn https://www.ft.com/content/b48b036c-5e34-45ea-a059-71d2cafe6792
Ryanair slashes winter capacity as virus weighs on demand https://www.bloomberg.com/news/articles/2020-10-15/ryanair-slashes-winter-capacity-as-virus-weighs-on-demand
Air France to operate 50 per cent of schedules during November and December https://www.businesstraveller.com/business-travel/2020/09/28/air-france-to-operate-50-per-cent-of-schedules-during-november-and-december/
Lufthansa will only offer 25% of pre COVID flights in Q4 https://simpleflying.com/lufthansa-q4-flight-schedule/
KLM further reduces its winter schedule https://worldairlinenews.com/2020/09/24/klm-further-reduces-its-winter-schedule/
Finnair cuts winter capacity to match reduced demand https://www.flightglobal.com/networks/finnair-cuts-winter-capacity-to-match-reduced-demand/140490.article
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