World in motion
ACI World calls for more financial assistance and support for airports to help them overcome the coronavirus pandemic and safeguard jobs, writes communications manager, Sabrina Guerrieri.
Aviation continues to be highly impacted by the COVID-19 pandemic and, while airport operators remain first and foremost concerned with protecting the health and welfare of travellers and staff, it is important to note that they are also businesses in their own right.
They have significant costs to bear, debts and obligations to fulfill, and services to deliver, even during a time of crisis.
The fast spread of the virus, and the travel restrictions and contraction that have come with it, represent a shock that has led to a severe drop in airport traffic and economic activity. The financial shortfall will be significant for businesses involved in the aviation ecosystem with current simulations indicating enormous airport industry losses.
As governments continue to make decisions on economic stimulus, ACI World has recommended the following policy measures in order to alleviate the shortfall for airports.
Protection of airport revenues: Airports are reliant on revenue from charges on airlines and passengers and from commercial activities (which play a key role to bridge the gap between airport costs and aeronautical revenue). Any global alleviation of airport charges or introduction of blanket discounts, therefore, will place airport operators in greater financial distress.
Alleviation of airport slots usage requirements: The temporary suspension of airport slot usage requirements, until June 30, 2020, would enable carriers to adjust their schedules in a sustainable way and for airports to protect connecting traffic at hub airports and help safeguard connectivity worldwide. As regards subsequent adjustments, ACI favours an ongoing flexible reassessment of the situation based on data-driven evidence that would focus on the situation in every market.
Concession fee payments to governments: Governments need to consider, on a case-by-case basis, waiving airport rents and concession fees applicable to airport operators, irrespective of their ownership status, given the financial stress they are experiencing.
Tax relief for the aviation sector: ACI World believes that national authorities now have a key role to play to ensure the sustainability of the entire aviation ecosystem by granting relief on airport taxes, on passenger-based taxes, and on taxes on air transport in general to incentivise the return of passenger confidence to travel.
Government assistance: In some circumstances, seeking government assistance to help offset losses incurred by the sharp drop in travel, due to the continuing outbreak, can be an appropriate measure.
“These policy responses aim to ensure the continuity and sustainability of airport operations in these exceptional circumstances,” said ACI World director general, Angela Gittens. “The aviation industry and governments should approach the prospects for recovery strategically, pragmatically, and in partnership.”
Furthermore, in response to the massive impact COVID-19 is having on the industry, ACI World has also called for measures to protect the livelihoods of millions of employees who work at airports around the world.
ACI data shows that airports employ – either directly or indirectly – more than 6.1 million people globally, which make up 60% of all employment in the aviation sector. Indeed, the typical hub airport has as many as 40,000 employees either working for the airport operator or for other employers on the airport site.
“ACI World is calling on countries to consider financial relief measures that will help to alleviate the significant drop in cash flows and to ensure operational and business continuity of airport activities, and to protect jobs,” Gittens said.
“Recognising that the entire aviation ecosystem has been affected by this crisis, financial relief should be non-discriminatory and not benefit one actor at the expense of another actor in the aviation ecosystem.”
Measures that could be considered include:
- Immediate provision of government assistance through grants and subsidies to support operating expenses and wages to airport staff
- Ensuring secured financing and loans at preferential rates and bank guarantees
- The suspension of all national and local aviation specific taxes for 2020
- The waiving or postponement of airport rents and concession fees applicable to airport operators, irrespective of their ownership status.
Countries must also consider maintaining a minimum level of employment to allow continued operations and to preserve a rapid return to full operations. This would mean supported wage guarantees with regards to those still employed and bridge-in programmes for those temporarily laid off.