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As aviation recovers, airports need flexibility in setting airport charges, writes ACI World director general, Luis Felipe de Oliveira.
With traffic still down on pre-COVID levels and passenger numbers not expected to recover before 2024, airport operators are likely to face significant financial challenges during aviation’s recovery period.
Taking stock of the fact that airports worldwide are engaged in a battle to keep their essential operations afloat and preserve jobs, the ICAO Council Aviation Recovery Task Force (CART) recommended that States support stakeholders across the civil aviation sector, including with extraordinary emergency measures to support their financial viability.
In the case of airport charges, the relevant ICAO policies recommend that caution be exercised when attempting to compensate for shortfalls in revenue and account be taken of the effects of increased charges on aircraft operators and end-users.
Increased co-operation between airports and airlines is encouraged to ensure that economic challenges and risks are reasonably shared.
Since the beginning of the COVID-19 crisis, ACI World has joined forces with its industry partners, most notably IATA, to call for government support to protect essential operations and to safeguard the livelihoods of millions of aviation workers.
Those calls were successful in garnering support for the airline industry. However, with a few notable exceptions, the airport industry has not received a similar level of government support despite 60% of direct aviation jobs being at the world’s airports.
We continue to emphasise that no measure or relief package should disproportionately benefit one stakeholder over another, and for aviation to pursue an even and balanced recovery, all participants in the aviation ecosystem need support.
In this context, airport operators and those authorities that oversee them, should chart a new path to enable an economically sustainable recovery of airports beyond COVID-19.
ACI and the airport community are advocating for five key best practices and responsive approaches of economic oversight to foster the recovery of air transport in a sustainable manner, with a win-win outcome for the whole aviation community, and with positive outcomes for the passengers.
First, airports should be free to tailor the structure and level of airport charges to their specific circumstances and develop targeted pricing strategies that meet their specific market situations.
Second, airport charges should be set by airport operators at a level allowing them to cover operating expenditures and capital costs and for revenue gaps to be addressed to mitigate the financial risk,
the people risk, and the infrastructure development risk resulting from the pandemic.
Third, the most responsive approach to set airport charges does not lie in the imposition of heavy-handed regulatory outcomes which are at odds with the market situation of airports.
Fourth, as airports should develop pricing strategies and tailor airport charges to their specific circumstances, ACI suggests policymakers abandon the mandatory practice of the single till in the jurisdictions that impose such an approach.
And fifth, there should be equal engagement from airports and airlines in an active and constructive airport charges consultation process.
ACI and the global airport community are committed to maintaining direct and constructive dialogue with international, regional, and national policymakers on reforming models of setting airport charges. This ongoing dialogue is critical because, despite the principles outlined above being globally applicable, there is no single model of regulation that can simply be adopted in every jurisdiction.
Each airport, each country, and each region of the world will require solutions specific to local conditions, aligned with industry stakeholders and regulators, so that an approach that works best for all parties can be established.
A flexible, agile, and responsive approach will provide benefits for the whole airport community and, in the end, for passengers, which is crucial as the aviation industry works together to re-establish the long-term sustainable growth trajectory.
These plans must also include climate action which will be key to supporting the ‘build back better’ concept and to rebuilding public trust and confidence in air travel.
At the end of the day, the objective is to create an economic framework that fosters a pathway back to sustainable growth, improves existing infrastructure, as well as helps airports to develop new ones, which will generate better quality of service for passengers and reduce investment needs for peak hours, and help airports to meet their climate change goals.
This is a global effort – climate change remains the greatest challenge facing the world – and we are proud to play our part.