European airports want to be able to charge airlines more, due to Covid financial losses
European airports association, ACI Europe, says airports face financial problems that will curtail efforts to decarbonise for a decade – unless governments and regulators help them financially. ACI Europe director general, Olivier Jankovec, called for changes to airport charges and a review of EU rules on state aid. Airports want to be able to charge airlines more. He said Europe’s airports took on over €20 billion in additional debt last year which is now financing them. He thought “Recovery this summer will be cash-intensive and revenue-weak.” Analysis for ACI Europe by consultancy firm AlixPartners suggests airport revenues will be below their capital spending requirements for 10 years to 2032, leaving airports no choice but “to slash” investment plans. ACI complains that airlines have had financial support, but airports have not. And they claim efforts to reduce carbon emissions will be slowed down [though having fewer flights and passengers would help anyway …]
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Airports warn of cash crunch and demand airlines pay more
By Ian Taylor | (Travel Weekly)
June 22, 2021
European airports association ACI Europe has warned airports face a financial crunch that will curtail efforts to decarbonise for a decade unless governments and regulators act.
ACI Europe director general Olivier Jankovec called for “an urgent reset” on airport charges and a review of EU rules on state aid.
He noted Europe’s airports took on “more than €20 billion in additional debt last year and this is financing today’s operations” and told an Airport Economics Symposium: “Recovery this summer will be cash-intensive and revenue-weak.”
Jankovec pointed out social distancing would limit airport capacity this summer while costs would escalate from the concentration of traffic at peak times.
Analysis for ACI Europe by consultancy firm AlixPartners suggests airport revenues will be insufficient to meet capital spending requirements for 10 years to 2032, leaving airports no choice but “to slash” investment plans
Jankovec warned: “Governments and regulators need to wake up to the financial weakness across the airport industry.
“Health measures and physical distancing will reduce capacity. Slot waivers continue to limit planning efficiencies.
“We foresee lasting financial weakness and a financial crunch. It’s going to be difficult to increase capacity and connectivity.
“The investment crunch will limit decarbonisation and digitalisation, [leaving] efforts to cut emissions compromised.”
He pointed out airlines had received “significant financial support” during the Covid crisis, but said: “This did not trickle down to airports.”
ACI Europe called for reform to allow to regulated airports to recoup losses by raising charges to airlines.
Jankovec insisted: “We can’t continue to be regulated as if nothing happened. The crisis is a turning point. All airport and airline models have to be reconsidered. It requires a policy and regulatory reset.
“Covid-19 has shown the limits of the price cap model which treats the airport business as risk free. As airlines have been protected, we need airports to be protected. Airlines have more countervailing power and their interests are not always aligned with passengers’ interests.”
https://travelweekly.co.uk/news/air/airports-warn-of-cash-crunch-and-demand-airlines-pay-more
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Airlines UK sets out four asks of government
https://travelweekly.co.uk/news/air/airlines-uk-sets-out-four-asks-of-government
21.6.2021
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See earlier:
Airport expansion plans looking less likely due to Covid and climate awareness
UK airports continue to do badly, due to the pandemic and travel restrictions, and it is anticipated that they could lose £2.6bn between April and September, if Covid continues to limit travel. The industry is also, unwillingly, having to consider their role in worsening climate breakdown, and whether it is acceptable for the sector to be expanding. “Many investors and fund managers could question in future whether airports sit well within their portfolios”. Only Gatwick, which is 50.01% per cent owned by Vinci, has made use of the Bank of England’s Covid corporate financing facility, for temporary grants and loans. Most airport owners have pared down their operations, staffing and costs, and cut dividends, to save money. Lenders are appreciating that the airports have huge financial problems, that they cannot solve while Covid continues to limit air travel. But the FT says there will be limits to the goodwill by lenders, as it is no longer certain that airports will remain a safe investment, generating predictable and high income streams – or be acceptable ethically. Now ACI warned of a “severe airport investment crunch” in Europe as it had to take on more than €20 billion of additional debt last year. That makes expansion plans look doubtful.
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European airlines lobbying against tighter EU rules to reduce CO2 emissions
European airlines are fighting tougher CO2 emissions rules under the EU’s long-awaited climate package, according to documents obtained by environmental group, Influence Map through FoI. The documents show that airlines and industry bodies have been lobbying against stricter European Commission rules for the sector under the EU’s Emissions Trading System (ETS). They do not want new taxes for the fossil fuels they burn, and say they cannot pay more after the damage the sector has suffered due to Covid. The EU has been trying to introduce measures to enable the block to cut its emissions by 55% by 2030, from their 1990 level. The airlines have vague aspirations to be “carbon neutral” by 2050 (while growing numbers of passengers and flights) by use of novel, so called “sustainable” fuels – and new technologies such as use of hydrogen and electric-powered aircraft, which are unlikely to make much difference for decades, if ever. Also the use of offsets, which don’t actually cut carbon. Industry group Airlines for Europe in October oppose a proposed tax on kerosene for flights within the EU, arguing that carriers would fill up in third countries. They do not want the phasing out of free airline credits, and are not happy that – at last – the cost of carbon permits has risen to a level that makes some sense.