ACI World publishes Airport Economics Report for 2020

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Airports Council International (ACI) World has launched its Airport Economics Report and Airport Key Performance Indicators (KPIs) for the 2020 financial year, providing the first in-depth global breakdown of airports’ financial activities during the first year of the pandemic.

The annual ACI Airport Economics Report presents an in-depth global analysis of airport industry revenues by source, costs and related trends across the globe and over time, while the Airport Key Performance Indicators (KPIs) provide insight into areas such as financial and employee performance, fixed-asset productivity and airport operations through detailed statistics.

Impact on revenues

According to the Airport Economics 2022 Report and 2022 Airport Key Performance Indicators, airports’ primary revenue sources – aeronautical and non-aeronautical (commercial) activities – declined sharply in 2020.

When looking at individual aeronautical revenue sources, revenues from passenger-related charges saw the largest declines (-65%) in tandem with the historic collapse in traffic. Although airports supported air cargo operations amid the pandemic, revenues from landing charges plummeted as well (-42%).

All non-aeronautical sources declined in 2020 compared with 2019, but those directly affected by passenger volume suffered the most, such as retail concessions (-65.2%).

The airport industry remains asset intensive. As a result, the airport cost structure is characterized by predominantly high fixed costs necessary for maintaining and operating the infrastructure components of airports, such as runways, taxiways, aprons, parking stands and terminal buildings.

Even though total airport costs dropped in absolute terms, costs on a per-passenger basis increased 91.8%. This is the result of passenger traffic plummeting compared with a fixed cost base. With many airports freezing or waiving certain aeronautical charges in tandem with rent relief on the commercial side of the business, unit revenues were significantly lower than unit costs during 2020.

Airport charges vital for sustained recovery

Considering the financial impact of the pandemic on the airport business, revenues from airport charges remain the lifeblood of airports in recovering costs – vital for airports’ recovery, the investment in infrastructure needed to meet future demand and for the ultimate benefit of the traveling public and local communities. Disproportionate regulatory regimes that hinder flexibility in setting the right level of charges represent an additional impediment to airport development.

Luis Felipe de Oliveira, director general of ACI World, said, “The entire aviation sector has been financially affected by the pandemic and we must all work together to ensure that all parts of the ecosystem recover sustainably. For airports, this means financing unavoidable high fixed costs that come with being infrastructure-intensive businesses – through a more efficient charging system.

“As advocated in the ACI Policy Brief on the modernization of global policy frameworks on airport charges, airport charging policies should be focused on market needs, and signals that the best way forward – for the benefit of the traveling public, local communities and the recovery of the entire aviation ecosystem – is through commercial agreements between airports and airlines.

“In addition, airports must adjust their non-aeronautical business strategies to reflect the new playing field. As the airport business rebuilds, we have an opportunity to strengthen these key revenue streams by understanding current trends and anticipating those on the horizon. Not only does this include wider societal and technological shifts, but also a deeper understanding of the behaviors and needs of passengers.”

Recognizing the important role that airport commercial revenues will have in the long-term sustained recovery of the airport industry and the entire aviation ecosystem, ACI has launched a new series of guidance material to strengthen airports’ non-aeronautical revenue and activities. Topics covered, or to be covered, include airport ground access services, concession agreements, duty free, digitalization, food and beverage, and sustainability.

To read a copy of the full report, click here.

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Dan originally joined Passenger Terminal World in 2014 having spent the early years of his career in the recruitment industry. As online editor, he now produces daily content for the website and supports the editor with the publication of each exciting new issue. When he’s not reporting on the latest aviation news, Dan can be found on the golf course or apprehensively planning his next DIY project.

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