Airport charges are set to increase in the midst of the cost-of-living crisis gripping Europe, warned Airports Council International (ACI) Europe Director General Olivier Jankovec during the 33rd ACI World Annual Congress and General Assembly held in Barcelona recently.
Addressing ACI’s annual meeting, Jankovec said Europe’s airports “returned to black” in 2022 for the first time since the outbreak of Covid-19 three years ago, recording a net profit of 6.4 billion euros. At the same time however, passenger traffic was still 21 percent below pre-pandemic 2019 levels and Covid-induced losses came to over 20 billion euros.
Looking ahead, ACI warns that the financial situation of Europe’s airports remains uncertain and challenging due to structural cost increases and revenue pressures.
“What is at stake here is airports’ ability to invest in their decarbonization, resilience, digitalization and capacity where needed. Looking at 2023 and the next two years, Europe’s airports already cut planned investments from 34.6 billion euros to 18.4 billion euros,” he said.
“So there really is only one logical way forward, and that is adherence to the user pays principle. Regulators and governments need to accept the fact that cost pressures and investment needs require an upward adjustment of airport charges.”
Debt and liabilities remain a 47 billion euros above pre-pandemic levels. At the same time, in addition to debt servicing, inflation has been driving external costs to record levels with operating costs such as utilities and supplies increasing by 78 percent and 62 percent compared to 2019 while capital costs also rose by 22 percent with both interest rates and depreciation costs rising.
ACI goes on to add that while air fares have increased by 32 percent compared to 2019, airport charges are up by 7 percent.
In view of the data, Jankovec said the current dynamic was not sustainable, adding that the evolution of the airport business model towards a new value creation model based on sustainability, innovation and diversification was critical.
“The seismic shift in the economy as the decarbonization imperative gathers pace comes with the opportunity to redefine and enlarge the societal role and relevance of airports” he said.