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ACI World director general, Luis Felipe de Oliveira, considers some of the key connectivity-related challenges facing airports today.
With the recent release of our latest air traffic forecasts covered in this edition, ACI World predicts that global passenger numbers are expected to approximately double from 2024 (9.7 billion) to 2042 and to be 2.5 times higher in 2052.
The role of airports and aviation stakeholders in enhancing sustainable connectivity has become paramount, not least to providing an excellent experience for our customers – making the theme of this Airport World a timely one.
The growth of air travel demand means we must work to ensure that airports and aviation are able to maximise their economic and social contributions worldwide. As an example, in 2019, 87.7 million jobs were supported by aviation worldwide. The sector contributes $3.5 trillion to global GDP, 2018 (4.1% of world economic activity). This figure is closer to 10% together with the tourism industry.
Investing in airport infrastructure
Investing responsibly in current and new infrastructure remains key to ensuring that we can sustainably meet capacity growth to maximise the social and economic benefits of airports, aviation, and cities.
We know that airports worldwide will further require an additional $42 billion for capital expenditure (CAPEX) by 2040 for infrastructure related to integrated roadways, rail, and transit facilities. In addition, approximately $2.4 trillion in airport total capital investments will be needed to address the long-term trend in passenger demand to 2040.
Upgrading airport infrastructure includes integrating quickly evolving technology, which is crucial to reaching our long-term environmental goal of net zero carbon emissions by 2050. In fact, according to the latest SITA IT insights report, IT spend is projected to continue its steady year-on-year growth since 2020, with 93% of airports expecting their IT spend to stay the same or increase in 2023 compared to 2022 ($6.8 billion). This will undoubtedly contribute to building a smooth passenger journey and connectivity.
ACI evidence supports the need for the modernisation of global policy frameworks on airport economic regulations towards ones that incentivise sustainability, efficiency, investment in infrastructure, and provides benefits to travellers and communities.
Air service development
A key aspect of connectivity is air service development, which involves the strategic co-ordination of various factors and the engagement of multiple stakeholders to ensure its success. The initial step in this process entails setting the stage and comprehending the potential demand for new routes.
The liberalisation of air transport is a condition for connectivity development and airport traffic growth. Increasing traffic both defrays the costs of providing aeronautical facilities and services to airlines and accentuates the generation of commercial revenues. Liberalisation contributes to the growth of the sector on a sound and stable economic basis and fosters local as well as global socio-economic development. It also tends to heighten competition, which lowers the cost of travel and brings more choice to consumers.
Secondly, ensuring that an airport possesses the requisite infrastructure to support the desired level of air service, including terminal facilities, runways, taxiways, and air traffic control systems, is essential for accommodating growth in passenger demand.
Thirdly, a critical aspect of success involves implementing effective partnerships with local tourism authorities and hospitality industries and raise awareness of the airport and the destination it serves.
The fourth element pertains to airport-airline relations, emphasising the importance of cultivating strong relationships with airlines and collaborating with them to develop new routes and attract additional air service.
The role of governments
Governments have a very important role to play as well. Where it is possible, governments should apply harmonised regulatory standards across countries to facilitate smoother operations and uphold safety and security standards.
Another important topic for air connectivity at the governmental level involves the taxation of airport businesses and civil aviation. The proliferation of various taxes and duties on airports, passengers, and air transport, as well as disproportionate or unwarranted airport concession fees and rents to governments, represent an impediment to air transport and air connectivity as well. Only justifiable, equitable and non-discriminatory taxes on airports, passengers and air transport are acceptable, as they otherwise engender a negative economic impact hindering the sustainable development of airports and of air transport.
And, last but not least, governments should recognise the importance of airport networks in ensuring regional connectivity and developing regional economies. Airport networks are vital for the economic sustainability of smaller regional airports through cross-subsidisation within the network, which can play a crucial role in enhancing access and connectivity for remote areas.
It is up to us all: governments, regulators, investors, airports, and aviation stakeholders to help shape the future of sustainable connectivity. As the demand for air traffic continues to increase, investments in sustainable connectivity becomes essential to ensure the benefits of aviation that are felt wide and far across regions.
An insightful article on an overview of airport.