ACI Europe addressed (11-Jun-2013) the immediate outlook for its 451 strong airport membership spanning 44 countries, covering the areas of air traffic, economic and financial performance and the commoditisation of air travel.
- Air traffic outlook: ACI Europe forecasts passenger traffic growth of 0.5% for 2013 and flat growth (0%) for freight traffic.
- The air traffic outlook has declined since late 2012, with overall passenger numbers down 2% since the start of 2013. Overall passenger traffic grew 1.8% in 2012, to a record 1.61 billion passengers, but the year saw a progressive slowdown with EU airports starting to lose traffic from Oct-2013;
- Cyprus, Greece and Spain are recording the sharpest drops in air traffic, although major EU economies of Germany, France and the UK "are not immune to recessionary pressures". Traffic at non-EU airports remains extremely dynamic - especially in Turkey, Russia, Norway and Iceland - with passenger traffic growing in excess of 9%. There is a major divide between major hubs, which are showing resilience due to their reliance on intercontinental traffic, and small regional airports which are the hardest hit, being dependent on intra-European. Overall, 48% of Europe’s airports are losing traffic”;
- Freight traffic shows no sign of turning around, declining 1% since Jan-2013, after nearly two years of constant decline. Apart from continued weakness in industrial output and domestic consumption, the discrepancy between passenger and freight traffic could reflect more structural factors. These may include changing supply chain strategies towards more local production and a less favourable cost/benefit equation for air freight.
- Economic and financial outlook: 42.5% of Europe’s airports were loss making in 2012, an improvement over 2009 when almost half of them were reporting losses. The main factor for this improved financial performance primarily rests with the fact that airports actively sought efficiency gains to reduce those costs that they can control - in particular maintenance costs (-29%) and equipment & supplies (-22%) but also staff costs (-9%) and sales & marketing costs (-16%). The resilience of commercial revenues has also helped - especially in retail, real estate and advertising.
- Commoditisation of air travel: Europe’s airports are also facing slower growth prospects in the long-term according to ACI Europe. As the European aviation market will progressively reach maturity, traffic is expected to grow at an average of 1.8% p/a up to 2035 - half the growth rate of the last 40 years. Combined with ever increasing competition, high fixed costs and declining yields, airports are bracing for the tough challenge of commoditisation. The immediate priority is on "de-risking the business", which comes with much reduced planning horizons. [more - original PR]