Airports face financial challenges despite traffic growth

ACI World has released its latest airport industry economic and financial performance data, revealing a significant gap between the recovery of passenger traffic and total airport revenues.

It says that while passenger traffic nearly returned to pre-pandemic levels in 2023 – just 5.4% below 2019 – airport revenues lagged further behind, falling short by 11.4%.

According to the latest ACI World Airport Economics Report:

– In 2023, global airport revenues reached $146 billion, a 21.4% increase from 2022. However, this is still 11.4% lower than the US$158.6 billion reported in 2019, pre-pandemic.

– Aeronautical revenues remained the primary source of total airport revenues in 2023, reaching $79 billion (14% below 2019), with a virtually unchanged share of 53.6% compared to 54.0% in 2019. Meanwhile, non-aeronautical (commercial) revenues stood at $54 billion (17% below 2019) and saw a slight decline, from 40.2% in 2019 to 36.7% in 2023.

– Capital costs rose by 4% from 2022 and exceeded pre-pandemic figures by 1%, reaching $40 billion. This increase was driven mainly by an 18% increase in interest expenses, reflecting the ongoing financial strain from airport debt.

– The debt-to-EBITDA ratio improved to 5.74:1 in 2023, indicating progress in managing debt. However, this ratio remains elevated compared to pre-pandemic levels, underscoring ongoing financial challenges.


Infrastructure challenges and future air travel growth

The weakened financial health of airports creates significant challenges for infrastructure development needed to meet future travel demand.

According to ACI World, global passenger numbers are expected to rise to 17.7 billion by 2043 and 22.3 billion by 2053 – almost 2.4 times the projected volume for 2024.

To address the long-term growth in passenger demand, an estimated $2.4 trillion in total capital investment will be needed by 2040 for airport infrastructure.

These investments, insists ACI World, are essential to maintain a sustainable aviation ecosystem that maximises the social and economic benefits of air travel, including job creation and regional development.

ACI World director general, Justin Erbacci, noted: “While passenger traffic has rebounded, airport revenues continue to lag behind, underscoring ongoing financial challenges.

“With air travel demand expected to soar in the coming decades, it is crucial that regulators implement flexible policies to support airport infrastructure investments – ensuring aviation’s sustainable growth and maximizing its social and economic benefits.”