CORONAVIRUS: ACI World warns airports will see steep decline in pax traffic and revenues

Passenger traffic for the world’s airlines and airports will fall at least 12 percentage points in the first quarter compared to an earlier forecast, according to Airports Council International World (ACI), and airports in the Asia-Pacific region could see passenger traffic volumes fall 24 percentage points as compared to previous “business as usual forecasts” because of the COVID-19 coronavirus that has killed more than 4,000 people and spread to nearly every country on the planet. A screenshot of the virus tracking site by Johns Hopkins University taken on 11 March. Click on the image to access the live site. (PHOTO: Matt Driskill) Europe and the Middle East are also expected to be significantly impacted by reductions in traffic. North America is expected to see similar declines in the second quarter of 2020 with recent service reductions just announced last week in North America and with more expected in the coming weeks. ACI APAC says Q1 regional traffic may drop 24% Airlines increasingly reliant on ‘ghost flights’ during coronavirus outbreak Singapore Airlines extends flight cuts to Australia, US, Europe Coronavirus adds hurdle for air cargo industry saddled with demand slump IATA calls for worldwide suspension of slot rules ACI World released the figures on Tuesday (10 March), along with an advisory bulletin on the predicted global economic impact on the airports sector of the unfolding COVID-19 coronavirus public health emergency. ACI World says the economic impact of the outbreak on the global airport industry will be “pronounced”, and will result in reduced revenues from airport charges. Prior to the COVID-19 outbreak, global airport revenues for the first quarter of 2020 were forecast to reach close to US$39.5 billion. ACI now estimates a loss of revenues of at least US$4.3 billion. Most of the loss in revenues is expected to occur in the Asia-Pacific region. Slot relief for airlines on ‘market-by-market’ review A member of a Korean Air ground crew in protective gear. (PHOTO: Korean Air) The International Air Transport Association (IATA) recently called on aviation regulators around the world to ease the so-called “80/20” rule that forces airlines to keep flying routes even if planes are empty if the airlines want to hold on to those airport slots. IATA called for the relief when it announced that airlines globally could lose up to US$113 billion in revenues if the viral outbreak continues. A blanket lifting of the slot rules is being opposed by ACI World because of the effect it would have on airports and their revenues. ACI World “is also urging a proportionate slot allocation response to COVID-19 that will preserve global airport connectivity,” the trade group said. “A global suspension of slot rules would jeopardise the ability for countries to stay connected with the world which will in turn have knock on effects to economies. ACI World favours an evidence-based market-by-market review.” Angela Gittens, ACI World director general. “The airport industry recognises that all stakeholders of the aviation ecosystem are heavily impacted by the COVID-19 outbreak, and that strengthened cooperation between airports, airlines, and regulatory authorities is needed as the industry responds to the outbreak,” ACI World Director General Angela Gittens said. “The sudden shock represented by the COVID-19 outbreak is affecting passenger and cargo traffic worldwide, markedly in Asia-Pacific and significantly reducing airport revenues. Airports rely heavily on airport charges to fund their operating and capital costs and operators find themselves under intense pressure during periods of traffic decline. Airport revenues must be sufficiently protected to ensure safe and sustainable operations. Measures to limit the collection of airport charges would be ill-advised.”