ACI EUROPE/ACI WORLD Annual Conference Review: Sunny delight!

Joe Bates looks back at some of the highlights from June’s eventful ACI EUROPE/ACI WORLD Annual Assembly, Conference and Exhibition in Barcelona.

A record 850 delegates, a number of key announcements, the chance to reunite with colleagues and, of course, two days of lively debate in the beautiful city of Barcelona ensured that this year’s joint ACI EUROPE/ACI WORLD Annual General Assembly, Conference and Exhibition will live long in the memory.

The heat may have been challenging for those of us not used to such warm and humid conditions, but with hot topics such as sustainability, the staff recruitment challenges facing airports and investing in airports on the agenda, as well as more than 140 exhibitors to visit, there were simply no excuses not to be at the Palau de Congressos de Barcelona on June 26-28.

A ‘Forum of Innovation’ hosted by the International Airport Professionals Community of Practice, a ‘Disabled Aircraft Removal’ workshop, ACI World’s Annual General Assembly, the Annual Meeting of ACI World Business Partners, and Welcome Reception in the Exhibition Hall preceded the official start of the event, which began on June 27 with addresses from Aena chairman and CEO, Maurici Lucena Betriu, and Maria José Rallo, Spain’s General Secretary for Transport and Mobility in the Ministry of Transport, Mobility & Urban Agenda.

Betriu noted that the end of the global pandemic meant that the aviation industry now faced a series of more ‘normal challenges’, such as economic slowdown, staff recruitment, industrial action and the need to ensure the sustainable development of the entire eco-system.

Talking about the latter issue, he noted: “Aviation has to decarbonise its activities within the next 30 years. There is now an industry wide commitment to achieve this goal, and in the case of Aena, aside from being one of our top priorities, we are determined to achieve net zero emissions by 2040 at the latest.

“[From a global perspective], it is important the airport industry helps the airlines, aircraft manufacturers such as Airbus and Boeing and other actors to accelerate the decarbonisation of the industry as public opinion will not discriminate between airports and airlines if we fail to meet our targets, especially as airports will need to build their capacity to meet demand as people will fly more in the future, not less.”

It was then straight down to business with keynote addresses from ACI EUROPE’s director general, Olivier Jankovec, and ACI World’s director general, Luis Felipe de Oliveira.

Challenges ahead for ACI EUROPE

Jankovec opened by stating that he felt that Europe’s airports were finally “transitioning from recovery to a kind of new normal” based on rising passenger numbers and improved financials.

He revealed that traffic volumes doubled across Europe in 2022, with 27% of airports matching or bettering their pre-pandemic passenger volumes as the continent’s airports welcomed a total of two million passengers. And although the total was still 21% below 2019, after more than €50 billion in lost revenues and over €20 billion in accumulated losses since 2019, Europe’s airports were back in the black last year – posting a net profit of €6.4 billion.

The return to profitability, he said, was primarily driven by airports delivering cost efficiencies despite unprecedented inflationary pressures and significantly slashing investments – with capital expenditure decreasing by €5.5 billion.

Another key contributing factor was airports working with their business partners to seize the momentum in consumer spending to increase their non-aeronautical revenues, in particular from retail, and food and beverage activities.

He described this year’s traffic levels as “so far, so good” as passenger numbers are now very close to pre-pandemic volumes, although the rate of recovery differed greatly across Europe, with the heavily tourism dependent markets of Cyprus, Croatia, Greece Portugal and Spain doing best of all.

Adding a note of caution, Jankovec said that looking ahead, the financial situation of Europe’s airports remains uncertain and challenging due to the combination of both structural cost increases and structural revenue pressures, such as debt and liabilities that remain a colossal €43 billion above pre-pandemic levels.

Looking to the future, Jankovec said airports faced two big challenges decarbonisation and the need to reset the airport business model to “build in resilience” and cope with the economic and operational realities of the European aviation market, characterised by the expansion from ultra-Low Cost Carriers along with the relative retrenchment and consolidation of full service carriers.

“It is very clear in Europe that decarbonisation is no longer about our securing our license to grow, but increasingly about keeping our licence to operate,” said Jankovec.

He concluded his address by outlining the evolution of the airport business model towards a new value creation model based on three pillars – sustainability, innovation and diversification.

And he suggested that ongoing moves to decarbonise entire economies across Europe offered airports the opportunity to evolve from transport centres to ENERports by acting as energy hubs, providing green energy not just to the airport but to the wider community as well.

“We have the opportunity to redefine and enlarge the societal role and relevance of airports,” said Jankovec. “The local value of an airport has long been part and parcel of our nations and regions. Now, we need to take this to the next level with the generation and supply of green energy for aviation and our surrounding communities alike.”

Global traffic recovery

In his state-of-the-industry address, ACI World’s de Oliveira noted that events of the last few years meant that this was very much a time of adaption and change to the new realities for the industry and that airports, through action and innovation, remain “core leaders” of change.

Reflecting on current traffic trends, he said that the latest ACI World data shows that 6.8 billion passengers used the world’s airports in 2022 and that this number was expected to soar to 8.4 billion this year, to reach 92% of pre-pandemic levels, with Europe enjoying the greatest increase, driven by a strong summer.

Latin America-Caribbean, he noted, was the hardest hit region at the start of the pandemic but a rapid recovery last year saw passenger traffic reach 92.7% of pre-COVID levels. North America, fuelled by a strong domestic market, is expected to end 2023 just 1.3% down on 2019. He predicted that the recent lifting of travel restrictions in China would signal a better year for the Asia-Pacific region, with passenger traffic anticipated to exceed 2.9 billion in 2023 to reach 85% of pre-pandemic levels. While Africa is on target to handle 220 million passengers this year, just 3% less than it did 2019.

“Our data clearly reflects a strong recovery all over the world, and although some regions are doing a little better than others, all are doing well,” de Oliveira told delegates, remarking that it was good to see the likes of Dubai International (DXB), London Heathrow (LHR) and Paris Charles De Gaulle (CDG) back among the Top 10 busiest passenger airports in the world in 2022.

The international share of the global market was also bouncing back, he said, accounting for around 38% of all passengers today as opposed to 42% before the pandemic. However, full recovery isn’t expected until 2025. Domestic traffic is anticipated to fully recover a year earlier, although globally, in May/June 2023, numbers were on a par with the corresponding months in 2019.

Looking further ahead, de Oliveira told delegates that although things were looking much better today and the industry was starting to grow again, he urged airports to remain vigilant as they still faced a lot of headwinds going forward.

On a positive note, he said the desire to travel, especially on holiday, was as strong as ever following the end of global travel restrictions. He also cited the decline in F&B and energy prices as well as the re-opening of China, the second biggest aviation market in the world after the US, as good for the industry that put it back on the path of growth.

Outlining the importance of the aviation industry to the global economy, de Oliveira reminded us that prior to the pandemic, the aviation industry was responsible for around 87.7 million jobs and $3.5 trillion in global GDP, which if you include the tourism sector, accounts for 10.4% of global GDP.

The ACI World director general also used his time on the podium to reaffirm the airport industry’s commitment to sustainable development, pointing out that over 500 gateways across the globe had been acccredited in ACI’s Airport Carbon Accreditation programme and that airports were fully behind aviation’s Net Zero by 2050 target.

With global passenger numbers expected to hit 9.6 billion in 2024 and double to 19.3 billon by 2042, de Oliveira said that growth was overwhelmingly on the agenda, and that this would bring with it some huge investment challenges for the world’s airports, which will have to invest a total of $2.4 trillion on enhancing their facilities by 2040 if the industry is to meet future demand and its ambitious sustainability targets.

He noted that different parts of the world will experience different patterns of growth and that much work would be needed to help the underdeveloped markets reach their potential.

De Oliveira stated that later in the day, ACI World and the World Economic Forum would launch the Airports of Tomorrow initiative aimed at accelerating the decarbonisation of the aviation industry by helping airports transform from passenger hubs into energy hubs.

It is believed that it will bring public and private stakeholders together to drive unprecedented collaboration and change in the sector, maximising the potential for airports to be vehicles for economic growth and environmental stewardship.

The initiative is built on four pillars – Infrastructure, Sustainable Aviation Fuel (SAF), Finance, and Innovation – that will see the exchange of expertise from different sectors and ultimately pave the way for the scheme’s objectives.

Ending on the digital transformation of the world’s airports, de Oliveira noted that airports continue to invest in new IT, spending $6.8 billion on technology in 2022 to enhance their operations and streamline the passenger journey through more self-service options.

Business intelligence solutions – data – is also at the forefront of airport IT investment priorities and ACI World has prioritised this area, said de Oliveira, briefly mentioning the launch of ACI’s AirportShare initiative, which colleague Thomas Romig, ACI World’s vice president for safety, security and operation, later explained more about in his presentation.

“We can double the size of the industry, but we cannot double the size of our facilities or employees, so we need the help of technology,” predicted de Oliveira.

Leading the way

Up next was a session called ‘The President’s Political Playbooks’ which gauged the thoughts of Sheikh Aimen bin Ahmed Al Hosni, CEO of Oman Airports and ACI World chair, and Javier Marín, executive vice president of Aena and president of ACI EUROPE.

Talking about slots, Marín reiterated ACI EUROPE’s call for urgent reform of the EU Airport Slot regulation – a legislative tool that he insisted was now 30 years old and relevant to a market which simply no longer exists.

ACI EUROPE believes that future-proofing the single aviation market must have, as its first step, a reform of this regulation to protect its integrity and well-functioning – considering that Europe accounts for over half of the world’s most congested airports.

“Slot regulation is a very important issue for Europe as we are forced to comply with regulation on how our slots are used even though we don’t have enough capacity,” explained Marín. “Giving airports more say on how slots are used will enable them to make better use of their capacity, which will create more competition and routes for passengers.”

Al Hosni agreed with Marín that it was time to revise the regulation around slot agreements as it would allow airports to make maxmum use of their facilities and better serve passengers.

The sustainable growth of the aviation industry, including decarbonisation and the need to commercialise the global development and sale of SAF was then addressed in a speech by ICAO Council president, Salvatore Sciacchitano.

The much awaited ‘Airport Leaders Symposium’ followed, and with a panel made up of high-profile airport leaders John Holland-Kaye, CEO of London Heathrow (LHR); Kadri Samsunlu, CEO of Istanbul Grand Airport (IST); Candace McGraw, CEO of Cincinnati/Northern Kentucky International Airport (CVG); Alex Gitari, managing director and CEO of Kenya Airports Authority (KAA); Aletta von Massenbach, CEO of Berlin Brandenburg Airport (BER); and Mónika Infante, CEO of Aeropuertos Dominicanos Siglo XXI (Aerodom), it didn’t disappoint.

IST’s Samsunlu got the session underway, telling delegates that his airport continues to do well with a growing route network and passenger numbers above 2019 levels since June, 2022, although he suggested that he should perhaps be uncomfortable about the fact that IST’s growth was primarily being driven by Turkish Airlines.

“One big player is dominant, which is why we need to diversify, and increase our connectivity further through the addition other airlines and low-cost carriers such as Wizz Air, which launched services to Istanbul this year,” said Sumsunlu.

Aerodom’s Infante revealed that the Dominican Republic is currently experiencing a tourism boom, welcoming more tourists in 2022 than in Argentina, Brazil and Mexico combined. Aerodom’s six airports were busy, but like elsewhere in the world, its biggest gateways experienced disruption last summer due to the delays caused by the late arrival of inbound flights from Europe as a result of staff shortages.

“Around 40% of the flights to our main airport [Santo Domingo] experienced delays last summer, but we have learned from it, and are prepared for this summer. We have extended our parking platform by 30% and are ready for a good summer,” enthused Infante.

In response to whether they still enjoyed being an airport CEO after leading their respective gateways through COVID and now all the difficulities associated with aviation’s recovery from the pandemic, BER’s von Massenbach said: “It is a wonderful industry and we have wonderful jobs, and when it becomes a bit challenging, it might even become a bit more interesting, although we wouldn’t want to go through last summer again.”

To avoid a repeat, she revealed that BER started planning for summer 2023 in September 2022, and after close liaison with the airlines, ATC and other bodies is confident that this year will be more stable, reliable and enjoyable for passengers.

Heathrow’s always engaging Holland-Kaye revealed that the UK hub recently faced the “huge challenge” of having to recruit 25,000 staff across the entire campus in just 18 months as a result of job losses during the global pandemic. He also stated that LHR’s decision to limit its number of departing passengers to 100,000 a day last summer while it was understaffed was ultimately the right decision to ensure the least disruption to passengers, and felt that ‘capping’ numbers might be an option that other airports could follow if they found themselves in similar circumstances.

Talking about rising costs for airports, CVG’s McGraw said the US gateway took the unprecedented step of electing to give its workforce a 13% pay rise in July 2022 and another 7% pay rise in January 2023 to ensure that it held on to staff. “It is a tremendous increase, but in my opinion, well worth it, as we have a lot of very good skilled people that we needed to retain and a lot of people we needed to recruit,” she said.

On the question of sustainability, Samsunlu stated that IST’s strategy for the next five years involved the ‘electrification’ of all ground support vehicles; increasing the operational efficiency of the runways; and producing its own green energy to ensure that the Turkish hub is 100% self sufficient and eco-friendly.

Gitari noted that KAA had the aspiration to become “the greenest airport operator in Africa” primarily through solar panel installations and carbon off-set programmes. Its sustainability goals appear to align with Kenya Airways, which recently operated its first SAF flight.

LHR’s Holland-Kaye praised ACI and ICAO for the leadership they have shown in the global adoption of a common goal of net zero carbon emissions for aviation by 2050, an undertaking he believes effectively provides the industry with a mandate to work out how it’s going to get there.

“What’s happening is impressive, and at the same time a bit daunting, because what we have to do on the ground to deal with the energy transition is huge,” said the Heathrow boss. “One of the big questions is how are are we [the industry] going to pay for it as we scale up? The answer has to be that it is paid for by the wealthy ones, in particular the big corporates, especially when it comes to funding the start-up of SAF, which will make up 30% of all aviation fuel by 2030.”

The second heavyweight panel of the morning was entitled ‘Can the Industry Really Work Together?’ and featured Nicolas Notebaert (CEO of VINCI Conncessions and president of VINCI Airports); David Pekoske (TSA Administrator); Filip Cornelis (director of aviation, DG MOVE, European Commission); Simon Hocquard (director general, CANSO); André Alves (network planning director, Iberia); and Janis Balkens (dnata’s regional CEO for airport operations, new and emerging markets).

Addressing the data sharing challenge faced by the industry, CANSO’s Hocquard commented: “This industry is appalling at sharing data and/or information. There are some exceptions, but broadly speaking, all the actors in the aviation system like their own information/data, and there is a perceived commerical value to keeping hold of it, so little gets shared.

“Collaboration will make the biggest difference to the entire aviation industry. In my opinion, all data/information should be freely available, as it’s what you do with that data and what you do with that information that creates value. If we all had the same information, just imagine how much better and more efficient our entire system could be?”

A highly eventful first morning ended with a presentation from Kyiv Boryspil Airport CEO, Oleksiy Dubrevskyy, who returned a year on from ACI EUROPE’s last annual conference in Rome to update delegates on how Ukraine was faring 18 months on from the Russian invasion.

The afternoon sessions began with panelists Jonas Abrahamsson (CEO, Swedavia); Sean Donohue (CEO, Dallas/Fort Worth International Airport); Haldane Dodd (executive director, ATAG); Alex Kueper (vice president EMEA, Neste) and Frédéric Eychenne (senior director regulations & policies, Airbus) addressing the topic of ‘Not if But When? Decarbonisation: The Global Timeline’.

A series of quick fire sessions followed, starting with a presentation from the World Economic Forum’s industry decarbonisation lead for aviation, Laia Barbara, about its new initiative with ACI World, Airports of Tomorrow, which is aimed at accelerating the decarbonisation of the aviation industry.

ACI World and Amadeus then revealed the winners of their annual Innovation Technology Awards. The prize for ‘Best innovation in airport passenger related processes’ was awarded to Incheon Airport for the creation of the Incheon Airport XR Metaverse; the award for ‘Best innovation in airport operations and installations management’ went to Hong Kong International Airport for its Digital Apron and Tower Management System; while the honour of being named the ‘Best airport innovation leader (individual)’, went to Miami International Airport’s chief innovation officer, Maurice Jenkins.

The first day of the conference concluded with a special address from EUROCONTROL director general, Raúl Medina Caballero; and a panel discussion about ‘The Infrastructure Revolution: Airport Cities, Vertiports, Enerports’ featuring Aena’s managing director for airports, Elena Mayoral; Urban-Air Port Ltd’s CEO, Andrea Wu; and SESAR 3 Joint Undertaking’s executive director, Andreas Boschen; followed by ACI EUROPE’s Annual General Assembly.

But the day’s business at Euro WAGA 2023 certainly wasn’t over as a Gala Diner followed at the National Art Musuem of Catalonia where both ACI World and ACI EUROPE presented a number of customer excellence and IT focused awards.

What turned out to be a really enjoyable Day 2 of the conference began with a keynote address by José Ramón Bauzá Días, MEP, and the Renew Europe Group’s co-ordinator for the committee on transport and tourism, quickly followed by a panel session called ‘CX Through the Lens of Sustainability’.

Not surprisingly, all the panelists in the ‘CX Through the Lens of Sustainability’ took customer service very seriously and believed in utilising the combination of dedicated staff and technology to put passengers’ in greater control of their journeys and make travelling throught their airports easier and more efficient.

All were also very aware of the need to be seen to be green and of the importance of communicating their sustainability initiatives to passengers and the wider community.

Hermes Airports CEO, Eleni Kaloyirou, for one believed that ‘sense of place’ facilities and service was crucial to ensuring a good airport experience and that demonstrating good environmental credentials, such as phasing out the use of plastics, was of growing in importance.

She said: “I think a lot of people decide whether to travel or not based on the idea that flying is a problem for the environment, so I believe it is important for airports to show that we are serious about our efforts to decarbonise the industry as that is our licence to grow, but at the same time we shouldn’t lose sight of the social and economic impact we have on communities. Flying is not the enemy, carbon is.”

Groupe ADP’s head of development for new energies, Matthieu Pirron, who as an aside noted that it wasn’t so long ago that airports considered their customers to be the airlines and not passengers, revealed that Groupe ADP promotes its sustainabity efforts through ‘environmental’ centres at CDG and Orly, which last year attracted 30,000 visitors, including many students.

In answer to whether passengers would be prepared to pay more for sustainability, Pirron said: “Expectations are high, for sure, and a survey has revealed that 80% of our passengers are aware of the challenges that we have, but they are not willing to pay more. In fact, 40% indicated that they might fly less in the future due to environmental concerns. So, to meet future expectations, all we can do is continue to do our best to spread the best in class environmental initiatives we have developed in Paris across our global airport network.”

The other panellists during the session were Galapagos Ecological Airport’s managing director, Jorge Rosillo, and NACO’s global business development director, Inna Ratieva.

Oliver Wyman’s partner for transportation and services, Rana Nawas, next gave a presentation on a new report called the Evolution of Airports, which looks at the potential future trends for airports in technology, passenger experience, intermodal connectivity, sustainable development and the evolving workforce.

Key findings of the report developed by Oliver Wyman in partnership with ACI World and the Sustainable Tourism Global Centre of Saudi Arabia, idenitified five megatrends that it believes will shape the development of airports over the coming decades – Technological Innovation; Intermodal Connectivity; Achieving Net Zero; The Changing Workforce; and The Passenger Experience. It also divided airports into four main types – The City Airport, The Global Hub, The Cargo Champion, and The Leisure Gateway.

The next session, ‘Investing in Airports – The New Paradigm’ included a panel of experts that included Ferrovial Airports’ asset management director, Miguel Onaderra; Ontario Airports Investments Limited’s co-head and managing director, David Stanton; Centerline Airline Partner’s president and CEO, Andrew O’Brian; and Mundys’ senior investment manager for airports, Alessio Montrella.

Arguably the most vocal among them were Stanton, who represents the Ontario Teachers’ Pensions Plan – one of the largest pension plans in the world – and O’Brian, the latter, of course, the former CEO of Quito International Airport in Ecuador.

In answer to what he would be looking for from governments in terms of an investment opportunity, Stanton said: “We are a long-term investor and our two main airports that are regulated are Brussels and Copenhagen. What we’re really looking for is something that is fair, transparent and balanced.

“You have to remember that we are investing for 20, 30 or 40 years, so what we would like is a more long-term discussion with governments so that it reflects what we are aiming to achieve and what the airport is looking to achieve as we are undertaking huge capital development programmes. If everyone has clear objectives it should avoid governments making short-term political decisions about key infrastructure.”

Reflecting on the market, O’Brian said that even though his company was only ten months old and still in the business development phase, it had already formed strategic alliances with a number of private equity firms, and in its interactions to date had experienced “a tremendous global appetite” from the market.

“In the two laps of the world that I’ve done in the last 10 months, stopping in many places and talking to many airport CEOs, executives, owners and investment firms, I’ve found that everyone is looking for one of two things,” said O’Brian. “They’re either looking for capital or how to access capital or how to structure financing for important bricks and mortar investment or maybe investment in other components of the business that we’ve been hearing about today, such as sustainability and how to set themselves up for that.

“On the other side, we’re seeing airports all around the world, independent of the continent or country, looking for leadership, knowledge and experience on how do we do this going forward.”

ACI World’s vice president for safety, security and operation, Thomas Romig, then gave delegates a snapshot of what they can expect from ACI World’s new data sharing initiative AirportShare, which seeks to revolutionise the sharing of data by airports to manage operations, improve customer experience and bolster revenues.

Romig said: “Some people say that data is one of the world’s most valuable resources. For airports, it brings operational preparedness. It can be used for forecasting. It can increase operational efficiency, improve revenues and many more things.

The problem we have in our industry is that everybody has different types of data and there is no common data language, which makes connectivity a challenge.

“We want to make the connection between data points through Airport Community Recommended Information Services (ACRIS) which is, in essence, a common data language which is already used by multiple airports and technology providers across the industry.”

Romig accepted that the technology needs to be deployed a bit further and that it was something that ACI World was still working on, but once it has done that, he said that the next step is to how to create connectivity between data consumers and data providers.

ACI World knows that the concept works as during the pandemic it successfully shared data from 300 airports with a number of big data consumers. They included Apple, which was pulling data about the health conditions at airports into its applications. It has now enlisted the help of Rockport Software to help it work out how it can best share data and what type of data it wants to share and connect multiple airports with different providers and data users.

In a breathless end to the morning delegates were then invited onto the stage to take part in a photo opportunity to mark a major milestone for ACI’s Airport Carbon Accreditation programme – the news that over 500 airports worldwide now use the scheme to help reduce, offset or eliminate their CO2 emissions altogether.

The familiar face of former ACI World director general, Angela Gittens, was in the moderator’s chair for the final session of WAGA 2023, a human resources focused discussion about ‘Future-Proofing the Global Workforce’.

Her panelists comprised Max Heinemann, co-CEO and owner of travel retailer, Gebr Heinemann; Munich Airport CEO and chairman of the management board, Jost Lammers; CVG’s Candace McGraw; the UK Department for Transport’s aviation director, David Silk; and PAC Kingston Airport Limited’s CEO, Fernando Vistrain Lorence.

The event closed with farewell speeches and the announcement that Riyadh Airports Company will host next year’s joint ACI Asia-Pacific/ACI World WAGA in Riyadh, in the Kingdom of Saudi Arabia, on May 21-23, 2024. See you there!