Outrageous: Infrastructure Costs Increasing $2.3 Billion in a Crisis

posted on 5th October 2021 by Eddie Saunders
Outrageous: Infrastructure Costs Increasing $2.3 Billion in a Crisis

The International Air Transport Association (IATA) warned that planned increases in charges by airports and air navigation service providers (ANSPs) will stall recovery in air travel and damage international connectivity.

Confirmed airport and ANSP charges increases have already reached $2.3 billion. Further increases could be ten fold this number if proposals already tabled by airports and ANSPs are granted.

“A $2.3 billion charges increase during this crisis is outrageous,” said Willie Walsh, IATA’s Director General.

We all want to put COVID-19 behind us. But placing the financial burden of a crisis of apocalyptic proportions on the backs of your customers, just because you can, is a commercial strategy that only a monopoly could dream up.

At an absolute minimum, cost reduction—not charges increases—must be top of the agenda for every airport and ANSP.

It is for their customer airlines”.

A case in point is found among European air navigation service providers.

Collectively, ANSPs of the 29 Eurocontrol states, the majority of which are state owned, are looking to recoup almost $9.3 billion (€8 billion) from airlines to cover revenues not realized in 2020/2021.

They want to do this to recover the revenue and profits they missed when airlines were unable to fly during the pandemic.

Moreover, they want to do this in addition to a 40% increase planned for 2022 alone.

Other examples include:

  • Heathrow Airport pushing to increase charges by over 90% in 2022
  • Amsterdam Schiphol Airport requesting to increase charges by over 40% over the next three years
  • Airports Company South Africa (ACSA) asking to increase charges by 38% in 2022
  • NavCanada increasing charges by 30% over five years
  • Ethiopian ANSP raising charges by 35% in 2021

“Today I am ringing the alarm. This must stop if the industry is to have a fair opportunity at recovery,” said Walsh.

“Infrastructure shareholders, governmental or private, have benefited from stable returns pre-crisis. They must now play their part in the recovery.

“It is unacceptable behavior to benefit from your customers during good times and stick it to them in bad times. Doing so has broad implications. Air transport is critical to support economic recovery post pandemic.

“We should not compromise the recovery with the irresponsibility and greed of some of our partners who have not addressed costs or tapped their shareholders for support”.