Call for better relationships between airlines and airports

posted on 19th June 2018 by Justin Burns
Call for better relationships between airlines and airports

Munich Airport’s chief called for better relationships to be developed between airports and airlines during the opening session of the ACI General Assembly Congress Exhibition in Brussels today.

The two sectors have always battled to protect their own sectors as they seek to reduce costs and grow profits, but as Europe’s hub gateways face considerable capacity issues, slot allocations and charges are much-debated issues and have put a strain on their relationships.

Munich Airport chief executive officer and ACI Europe president, Michael Kerkloh warned that in his views “airports and airlines are more divided then ever”.

“Airport charges have been relatively few and have been stable since 2006,” he said, but he added that low airport charges do not though translate into lower fares.

Kerkloh said it was time to “normalise” the airline and airport relationships and also time to look at the slot regime to make the most efficient use of capacity, as in his opinion more airports will soon reach their capacity.

“Now is the time to look at airport slot allocation and set-up new rules. Europe makes up 60 per cent of the slots around the world. We are slowing down our sector and are depriving travellers’ of choice and slowing connectivity,” he said.

Kerkloh said the airport capacity crunch across the continent’s airports needed to be resolved, and there needs to more development in infrastructure. “We need European governments to step-up to the challenge,” he added.

“We need to be able to develop more runways and terminals, but other than a few exceptions, Europe is losing ground on other regions,” Kerkloh warned.

And he said at the heart of any future airport construction projects must be sustainability, which was “paramount” in any developments and airports have to increase their aeronautical revenues.

Also speaking in the opening session was ACI Europe director general, Olivier Jankovec who said airports are the “battle ground” for airline dominance and rising traffic is causing operational challenges.

“It is the tipping point – as airports we face a continued business evolution. It means we need to build resilience and embrace disruption, look for changes and we need to push our business models,” he said.

Jankovec said airport traffic in Europe, which grew by 8.5 per cent in 2017 to 2.3 billion, is being primarily driven by low-cost carriers and he also questioned whether now and in the future airports will be about point-to-point or hub and spoke as Europe’s hubs are being challenged as there is increasing  competition.

Airports across Europe have managed to improve their financial performance, according to Jankovec principally by cutting costs across different areas such as staff, and maintenance, but they are at their “limit” in terms of costs reductions he said.

“If we reduce any further, then we risk reducing operational efficiency and impacting other areas of operations,” Jankovec warned.

He said that 46 per cent of Europe’s airports are making a financial loss, and the region’s gateways do not perform as well as their counterparts in other regions.

But moving forward he said there was much uncertainty for airports due to the greater risk of geopolitics such as trade wars, rising conflicts, and Brexit, while increasing oil prices will not be good for aviation and their remains concerns over debt and secular stagnation.