Economic analysis by Airports Council International (ACI) World has found that, at a global level, the COVID-19 pandemic is predicted to wipe out two-fifths of passenger traffic and almost half of revenues for airports in 2020.
In an economic bulletin published, ACI World predicts that global passenger traffic close to two-fifths (38.1%) will be lost as compared to the forecasted pre-COVID-19 figure. This is equivalent to 3.6 billion passengers in absolute terms.
This shortfall in the number of passengers and the cancellation of flights will continue to result in reduced revenues. While the industry was expected to generate about $172 billion (figures in US Dollars), it is now predicted it could lose about 45% or more than $76 billion by the end of this year.
“A drastic decline of such magnitude for the global airport industry represents an existential threat,” ACI World Director General Angela Gittens said.
“A swift, effective and equitable economic policy response from governments is needed to protect millions of jobs, protect essential operations, and give the industry the greatest chance to weather the storm and recover quickly.
“The global airport industry has faced multi-billion-dollar losses already in the first quarter of 2020, but it is now predicted that the impact of COVID-19 will extend not only to the second quarter of 2020 but also the second half of the year.
“Most experts in the air transport industry agree that recovery may take a year to 18 months to reach pre-crisis traffic levels and the industry may not record pre-COVID-19 traffic volumes again before the end of 2021
“A fair and equitable global economic policy response is required to safeguard essential airport operations, to protect millions of jobs worldwide, and to ensure the survival of the industry and lay the foundation for a fair recovery.”
As revenues continue to contract rapidly, airports are taking all possible measures to preserve financial stability. While airports have high fixed and unavoidable costs, they are reducing, to a minimum, variable costs by closing portions of infrastructure, postponing capital expenditure, and addressing staffing costs. These difficult decisions are not taken lightly but are necessary in response to the crisis facing the industry.
As regards prospects for recovery, ACI believes it is reasonable to foresee faster recovery in domestic passenger traffic. In the case of international passenger traffic, however, the recovery will take longer, as any international flight implies reciprocal permissions, while various States will emerge from the current crisis at different times with varying pace of relaxation of the recently imposed restrictions.