AIRPORT WORLD 2021, ISSUE 02
Theme: Revenue diversification
Airport report: Bermuda
Special report: World’s busiest cargo airports
Plus: Sustainability & 2020’s ASQ winners
Editor, Joe Bates, considers the economic impact of COVID-19 on airports and how finding new revenue streams could help some survive.
Anyone who has been in this industry for any length of time knows that survival has long been the name of the game for most of the world’s loss-making smaller airports, so the economic ramifications of the COVID-19 pandemic for them – and indeed some of biggest and previously most profitable hubs on the planet – is potentially massive.
We already have some idea of how bad 2020 was for airports thanks to the announcement of their individual financial results and ACI World data, which in terms of the bigger picture, revealed that airports lost around $125 billion in revenue last year as they handled 6.1 billion fewer passengers than expected.
Putting the $125 billion loss in perspective, ACI World’s vice president for economics, Patrick Lucas, states that it is equivalent to completely wiping out the revenues of the 95 busiest hubs in the world.
And ACI’s latest analysis shows that despite some positive signs for recovery emerging, the impact of the COVID-19 crisis on airport revenues will still be deeply felt in 2021.
In cold, hard facts, its Advisory Bulletin: The impact of COVID-19 on the airport business and path to recovery predicts that 4.7 billion fewer passengers or 47.5% less than originally expected will travel by air in 2021. If, this is the case, it will result in a year-end loss in revenue of more than $94 billion, cutting in half earlier expectations.
The gloomy picture is compounded by the Air Transport Action Group’s latest Aviation Benefits Beyond Borders report, which warns that 4.8 million direct aviation jobs may be lost due to the impact of COVID-19, including more than 55% of the staff that work on airport sites.
ACI World’s best-case scenario for aviation is that global passenger numbers could return to 45-55% of 2019’s levels by the end of 2021 and be back on track from the end of 2023. The worst-case scenario, essentially based on a slower than hoped for vaccine roll out, is getting back to 2019’s passenger volumes at the end of 2024 and bettering it from 2025.
In either case, airport revenues are going to suffer, and with the number of passengers travelling on business expected to further decline – ASQ survey data shows that numbers have actually been dropping for the last five years – airports are going to be under greater pressure than ever before to maximise their revenue streams.
Airport World takes a look at some of the ways that airports are already doing this today in this ‘revenue diversification’ themed issue, with initiatives ranging from Munich Airport’s decision to expand its business interests beyond Bavaria and Germany; and Malaysia Airports’ efforts to embrace the boom in e-commerce; to Houston Airport System building its own Spaceport.
We also have a feature from MXD Development Strategists president, Chris LeTourneur, who explores how mid-size airports in North America are developing their land portfolios to become even bigger economic powerhouses for their cities and regions.
Elsewhere in the issue, ACI World director general, Luis Felipe de Oliveira, reflects on the impact COVID-19 has had on aviation and plotting the road to recovery, one year on from the outbreak of the global pandemic.
Our main feature is on Bermuda’s LF Wade International Airport, where Bermuda Skyport CEO, Aaron Adderley, tells us more about the airport’s game changing new state-of-the-art terminal.
We also turn the spotlight on air cargo where we find out how the world’s busiest cargo hubs fared in 2020 and report on the future ambitions of Ted Stevens Anchorage International Airport.
A comprehensive review of ACI World’s 2020 Airport Service Quality (ASQ) customer experience champions; the latest news from ACI’s World Business Partners and our regular ‘People matters’ column closes out the editorial content of another action packed issue.