ACI Europe warns of massive insolvency crisis

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The trade body ACI Europe has warned that so fundamental are the risks posed by Covid-19, an estimated 193 airports face insolvency in the coming months if passenger traffic does not start to recover by the year end. These airports between them facilitate 277,000 jobs and €12.4bn (US$14.9bn) of European GDP.

The organization asserts that the threat of airport closure means Europe faces the prospect of the collapse of a significant part of its air transportation system – unless governments step up to provide the required support. ACI’s latest data shows:

  • A year-on-year decrease of 73% in passenger traffic at Europe’s airports in September
  • The loss of an additional 172.5 million passengers in September, bringing the total volume of lost passengers since January 2020 to 1.29 billion.
  • As of mid-October, passenger traffic stood at 75% down from the same period last year, reaching an 80% decrease for airports in the EU/EEA/Switzerland/UK footprint – a clear downward trajectory.

It notes that the continuation of severe restrictions to cross-border travel into the winter season has considerably worsened the traffic outlook. Many airlines have slashed their capacity plans for the reminder of the year and into 2021.

The airports facing insolvency are mainly regional airports which serve – and are integral to – local communities. ACI maintains that financial support from government will be crucial in averting rising geographic inequality and damaged social cohesion. At the same time, larger European airports and hubs are not immune from the critical financial risk. They have cut costs to the bone and have resorted to the financial markets to shore up balance sheets and build emergency war chests.

This sudden increase in debt – an additional €16bn (US$19.2bn) for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year. This, along with the fact that these airports had to make thousands of highly skilled workers redundant, clearly jeopardizes their future.

Olivier Jankovec, director general of ACI Europe, remarked, “In the midst of a second wave, ensuring safe air travel continues to be our primary concern. It’s crucial that we reduce the risks of importation and dissemination as much as possible. But surely we can do a much better job of reducing those risks by testing air passengers rather than with quarantines that cannot be enforced.

“The figures published today paint a dramatically bleak picture. Eight months into the crisis, all of Europe’s airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs. Governments’ current imposition of quarantines rather than testing is bringing Europe’s airports closer to the brink with every day that passes.”

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Lawrence has been covering engineering subjects – with a focus on motorsport technology – since 2007 and has edited and contributed to a variety of international titles. Currently, he is responsible for content across UKI Media & Events' portfolio of websites while also writing for the company's print titles.

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