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European air traffic defies geopolitics and continues to grow, says ACI Europe

Photo: Frankfurt Airport

Air traffic across Europe is on the rise despite political tensions overseas, said ACI Europe at its Annual Assembly & Congress hosted by Groupe ADP in Paris, France.

In 2016, Europe’s airports welcomed more than two billion passengers for the first time, following three years of sustained growth of more than 5%. Europe’s airports have added more than 300 million passengers since 2013, making a significant contribution to the economy alongside airlines and other aviation partners.

So far this year, passenger traffic has grown by 9% since January and freight traffic is up by 7.4%. This surge in air traffic is predominantly driven by a lift in the global economy; continued airline capacity expansion; and demand recovery in Russia, Turkey and other markets hit by terrorism last year, most notably in Belgium and France.

Air traffic is defying increased geopolitical risks in 2017 so far, much like the rest of the economy. However, Europe’s airports reiterated their concerns at the ongoing uncertainty resulting from the UK leaving the European Union, which has increased following the results of the UK general election last week.

Olivier Jankovec, director general at ACI Europe, commented, “In the EU alone, passenger traffic has expanded by 22.2% since the global financial crisis, three times faster than GDP. This primarily reflects wider dynamics in the travel and tourism industry, driven by digitization, experiential consumerism, rising inbound demand from emerging markets, affluent baby boomers and ultra-mobile millennials in Europe.

“Conversely, freight traffic has only grown by 7.7% since 2008, hampered by slower trade, the multiplication of protectionist measures and supply chain relocations.”

The financial performance of Europe’s airports continues to improve, with the industry’s average return on invested capital now standing at 7.7%. However, airports in the Eurozone keep underperforming (+6.1%), and the performance gap is even wider when compared with BRICS airports and those in other emerging markets (+9.7% and 12.2% respectively).

Jankovec commented, “There is no doubt that the growth in air traffic has helped, but the sharp focus of airports on efficiencies and costs reductions has been instrumental in delivering improved financials. Costs have fallen by 8% on a per passenger basis since 2008, with staff costs alone going down by an impressive 22.8%. Containing costs is a must, given the challenging revenue environment we are facing.”

The increase in airport competition and its underlying causes also come with changing connectivity patterns. ACI Europe released its fourth Airport Industry Connectivity Report, which reveals that for the second year in a row, direct connectivity is growing at a faster rate than indirect and hub connectivity.

Amsterdam Airport Schiphol in the Netherlands has become the number one airport in Europe in terms of direct connectivity, overtaking London Heathrow in the UK. Since 2007, Moscow-Sheremetyevo (Russia), Palma de Mallorca (Spain) and Dublin (Ireland) have joined the Top 20 European league for direct connectivity, while Istanbul-Atatürk (Turkey) has moved from 20th to fifth.

Frankfurt, Amsterdam-Schiphol, Paris-Charles de Gaulle and Istanbul-Atatürk remain at the very top of the global ranking for hub connectivity, along with Dallas-Fort Worth and Atlanta in the USA. However, Middle East and Asian airports have seen their hub connectivity grow rapidly since 2007, redefining the hub competition market.

Written by Kirstie Pickering

June 13, 2017





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