ACI issues new call for government assistance to help airports survive COVID-19 crisis
ACI World has today called for urgent government assistance and relief for airports to underpin the operational restart of the aviation industry and sustain their long-term industry recovery.
It notes that the COVID-19 pandemic’s effect on the industry and broader economy has halted the airport industry at global level, potentially losing them 4.6 billion passengers and $97 billion in revenue in 2020.
The industry’s loss is a blow to global economy as airports are important engines of economic growth, wealth creation and employment, their presence supporting in excess of 6.1 million jobs across the globe.
ACI warns that as airports in some regions embark on the first steps in restarting operations and make plans for a sustained, long-term recovery, their efforts needs to be underpinned by financial assistance and relief to safeguard essential operations and protect millions of jobs.
As a result, ACI World is urging the adoption of the following policy responses to help the industry as it recovers:
1. Protection of aeronautical revenues: Because of the sharp downturn in revenues, operators need to protect revenues such as airport charges. In a context where commercial revenues from retail, food and beverage and car parking have experienced a significant downturn, aeronautical revenues remain the sole source of funding for airports to continue to ensure the basic services required by airport passengers and users. To avoid impacts on the airport cost base, expenses related to new health related measures brought on by the COVID-19 pandemic should be covered by governments.
2. Tax relief and concession fee waiver: urgent tax relief will provide much-needed financial oxygen to airports to ensure continuity of operations and safeguard airport jobs. Additionally, airport rents and concession fees should be waived or postponed in the form of a one-time measure for a defined period.
3. An evidence-based and data-driven approach to slots: regulators worldwide should consider the needs of travellers and of the overall aviation ecosystem before deciding to extend airport slots waivers into the winter 2020-2021 season. Noting that several airlines have already made public announcements regarding fleet reductions, ACI World has become concerned that waivers could be used as a mechanism to isolate slots from market realities during the recovery period.
In situations where waivers would be extended, strict conditions should be attached to incentivise airlines to return slots they will not use to ensure that consumers are protected from last-minute cancellations, avoid unintended impacts on the competitive landscape, and enable airports to plan operations safely and cost-effectively.
4. Continued support for air cargo operations: airports should continue levying charges on air cargo operations to maintain essential airside and cargo facilities as passenger operations continue to be slow.
5. Comprehensive financial relief: this should include wage subsidy schemes to help restart operations and underpin recovery. Grants and subsidies, secured financing, loans at preferential rates, and bank guarantees should be made available. Financial relief should benefit all actors in the aviation ecosystem.
“Airports need urgent relief and assistance to help them as they begin to restart operations, weather the far-reaching economic ramifications of the crisis, and help lay the foundation of a balanced recovery,” notes ACI World director general, Angela Gittens.
“With the massive revenue shortfall, airports continue to face high fixed costs and rising costs related to health measures at airports coupled with creeping increases in the cost of capital are new challenges brought on by the pandemic. ACI World believes these costs need to be considered by governments and the impact they have on the airport cost base.
“Airports are keen to support traffic growth but the allocation of airport capacity also requires a balanced approach for all aviation stakeholders. Waivers on slots, or a suspension on the use-it-or lose rule, could potentially limit choice for travellers and weaken competition among airlines as part of industry recovery efforts.
“ACI World urges regulators to follow a data-driven and evidence-based approach to assess whether further blanket slot waivers are the appropriate measure in re-establishing local, regional and global connectivity.”