Increasing competition keeps down airport charges, ACI World claims

posted on 13th May 2021 by Edward Robertson
Increasing competition keeps down airport charges, ACI World claims

Increased competition between airports has kept charges down despite growing passenger numbers, ACI World has claimed.

The airport association has released its 2021 Economics Report and Industry Key Performance Indicators which includes analysis for 2019, the last full year to be unaffected by the ongoing Covid-19 pandemic.

The report includes data from 950 airports of all shapes and sizes across all regions handling 81 per cent of worldwide aviation traffic.

It shows that in 2019, total airport revenue grew by 1.4 per cent to $180.9 billion from $178.4 billion in 2018.

The report said that the growth was less than the 3.5 per cent increase in air traffic during the same period, showing there was a real decrease in airport revenues on a per-traffic unit basis before the global pandemic struck, thanks to an intensification of airport competition

ACI World director general Luis Felipe de Oliveira said: “As the aviation industry plots a recovery from the catastrophic impacts of the Covid-19 pandemic, the economic fundamentals of our industry serve as a benchmark to assess the recovery – and transformation – of the airport business, paving the way to return to the pathway of growth.

“Our economics report shows that, though industry revenues continued to grow in at the same pace as passenger traffic before the pandemic, revenue per passenger decreased slightly year-over-year since 2015 which is testament to a wide array of competitive forces shaping the industry.

“This shows the commitment of the industry to keep the cost basis stable, facilitating the further development of aviation.

“This is a clear demonstration that the calls for tighter and rigid economic regulation of airport charges are unfounded as airport charges have remained both stable and reasonable in response to strong competitive pressures.”

De Oliveira said airport charges are vital for both for the sustainability of airport operations and their future development as they plan and build extra infrastructure for future demand.

He added: “Airports incur capital expenditure, a significant portion of which relates to modernisation of the existing facilities and development of new infrastructure and, in the wake of the pandemic, new investments are needed to ensure sustainable and resilient airports.

“Post-pandemic times will require more technologically-advanced, seamless and contactless processes as for handling passengers, aircraft movements, cargo and baggage.”

De Oliveira added the competition between airlines will remain key to the future of the industry as it starts to emerge from the Covid-19 pandemic.

He said: “Airport costs are largely fixed, partly because of investment in infrastructure but also because of associated operating costs, including those on safety and security, and now hygiene and health, which vary little with the scale of traffic.

“Airlines are making full use of the freedom they have to switch away from airports and with the rapid development of new routes, a large proportion of today’s passengers have a choice between two or more local airports for departure or arrival and also a choice in hub airports for connecting flights.

“The combination of these factors suggests that passengers have a significant and increasing degree of choice over which airport to fly from which represents a competitive pressure for airports that increasingly must make themselves attractive to passengers.”