COVID-19: ACI World says impact of virus, border closures on industry continues to worsen

Loss of more than 4.6 billion passengers and US$97 billion in revenue forecast for 2020

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An empty airport shows the current state of the industry due to the COVID-19 pandemic. (PHOTO: Shutterstock)

The main trade group for the world’s airports, Airports Council International (ACI) World, says the situation facing the world’s airports and its employees is worsening due to the “prolonged – and more widespread – impacts and effects of the COVID-19 pandemic”. The association is now estimating that a reduction of more than 2 billion passengers at the global level in the second quarter of 2020 and more than 4.6 billion passengers for all of 2020. The estimated decline in total airport revenues on a global scale is estimated to be US$39.2 billion in the second quarter and more than US$97 billion for 2020.

A screenshot of the virus tracking site from Johns Hopkins University taken on 5 May. To access the live site, click on the image. (PHOTO: Matt Driskill)

The association says this new information shows the increased need for government assistance for airports to preserve essential operations and to protect the jobs and livelihoods of the millions of people that work in airports around the world. Last week, ACI World and the International Air Transport Association (IATA) came together to call for urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem.

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Angela Gittens, director general of ACI World. (PHOTO: ACI World)

“The impact of the COVID-19 pandemic on airports, the wider aviation ecosystem, and the global economy continues to worsen and represents an existential threat to the industry unless governments can provide appropriate relief and assistance,” ACI World Director General Angela Gittens said. “As traffic and revenue have collapsed, the airport industry has taken all possible measures to preserve stability, but the challenge remains that a significant portion of airport costs are fixed. Airports are critical in the air transport ecosystem which is a key driver of local, regional and national economies and the communities they serve, and this global economic multiplier effect needs to be safeguarded to help underpin recovery. Jobs need to be protected and airports given financial support so people can rapidly return to work while operations can be scaled up to meet demand as the industry restarts.”

ACI World has called for comprehensive financial relief including wage subsidy schemes to allow continued operations and a rapid return to full operations, the protection of airport charges and revenues, urgent tax relief to provide much-needed financial oxygen to airports to ensure continuity of operations and safeguard airport jobs, waivers to airport rents and concession fees, the continuation of charges on air cargo operations to maintain essential airside and cargo facilities. Grants and subsidies, secured financing, loans at preferential rates, and bank guarantees should be made available.

“Financial relief and assistance is urgently needed but it is crucial for the prospects of a balanced recovery that any assistance benefits the entire aviation ecosystem and does not target once sector over other,” Gittens said.

Asia-Pacific & Middle East

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Cathay Pacific has grounded nearly half its fleet and other airlines like Qantas have also grounded almost all of their widebody jets because of the halt in commercial aviation. (PHOTO: Shutterstock)

ACI World earlier warned of a year-end revenue loss of 59 percent for Asia-Pacific airports and 53 percent for Middle East airports. Combined, airports in these regions are forecasted to lose US$36.4 billion for the full year 2020. For both Asia-Pacific and the Middle East, this means 10 percent more losses than forecasted one month ago. This outcome is the result of a significant drop in passenger traffic with the two regions jointly standing to lose 2 billion passengers, about 400 million more passengers than previously forecasted.

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Stefano Baronci, director general of ACI Asia-Pacific. (PHOTO: ACI)

“We are observing moderate signs of recovery in China’s domestic traffic, which is encouraging. But we are entering the most critical stage of the year for our industry. We expect the second quarter of the year to be substantially more challenging than the first quarter, especially in countries with predominantly international traffic profiles. Rebuilding people’s confidence to travel again will take time,” said Stefano Baronci, director general, ACI Asia-Pacific.

Preliminary traffic data for April from 26 airports from Asia-Pacific and the Middle East confirms the current challenges and negative trends faced by the region’s airports. On aggregate, the traffic at these airports remain rock bottom, recording a year-on-year traffic decline of 92 percent in the four weeks of April.

“With concrete data in hand for the rest of the year, it is evident that airports will struggle to survive. Governments in Asia Pacific and the Middle East need to do more. ACI Asia-Pacific encourages governments in both regions to look at other competitive markets, such as the US which has pledged US$10 billion in rescue funds to airports or Brazil which has allowed for the deferment of airport concession fee payments by airport operators until the end of the year,” Baronci said.

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