European airports are faced with unprecedented collapse as the corona virus pandemic continues to rage havoc across the travel industry.
“An estimated (of) 193 airports face insolvency in the coming months if passenger traffic does not start to recover by the year end.” This is a warning by the European Airports Council International (ACI) sent out two days ago in a statement on its website.
The winter season is well underway. Travel demand is not as high as in the summer and the prospects for airports recovery are bleak.
European ACI states that “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.”
The regional airports
Most vulnerable are regional airports. They rely on very limited flight traffic to sustain their operations. Even if one airline stops flying to a regional airport, it can bring devastating losses to that airport business
EasyJet has already closed its UK bases in at Stansted, Southend, and Newcastle.
“We have had to take the very difficult decision to close three UK bases as a result of the unprecedented impact of the pandemic and related travel restrictions, compounded by quarantine measures in the UK which is impacting demand for travel,” said recently the chief executive Johan Lundgren as quoted by CambridgeshireLive.
Local airports are the lifeline for nearby communities. They are the gate to the world for them. When airlines stop flying to regional airports these communities are left in a very difficult situation. Local resident may need to travel significant distances to reach the nearest major airport.
The major airports
“Larger European airports and hubs are not immune from the critical financial risk”, states the European ACI. Major airports have already reduced their operation cost to the bare minimum. They resorted to financial support by local governments or other cash avenues to ensure some level of operations.
However, the financial support is not without consequences. It leads to more dept for the airports. “This sudden increase in debt – an additional €16 billion ($19 billion) for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year.”, clarifies the European ACI.
The financial cuts also lead to the loss of skilled and highly qualified airport staff that is hard to replace. It furthers the difficulties the airports experience.
Olivier Jankovec, Director General of ACI EUROPE, said in the statement “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 European ACI says “the total volume of lost passengers since January 2020 (is) 1.29 billion”.
What is the solution?
A lot of airlines have already decreased the number of flights they plan to operate for rest of year 2020 and into 2021. Is there any hope of recovery?
One solution to the problem would be passenger testing. Airports already take first steps in this direction. For example, the UK Heathrow Airport is taking the lead by offering a 24-hour COVID-19 testing upon arrival. Only if a passenger tests negative they are exempt from a 14-day self quarantine. Other European airport also moving toward this direction to restore travelers’ confidence.
However, The Director General of ACI EUROPE clearly sounds the alarm. “The figures published today paint a dramatically bleak picture. 8 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.”