Investment in airport infrastructure crucial to accommodating short-term demand

Airports Council International (ACI) World today emphasized the importance of investing in airport infrastructure so that the immediate and growing demand for air travel can be accommodated.

Speaking at the 37th annual California Travel Summit, ACI Director General Angela Gittens highlighted the benefits of air service growth and the responsibilities that come with it.

"The exponential growth of air service demand promises more jobs, higher GDPs, and a wealth of social benefit, not to mention a more connected world," Angela Gittens said.

"This will only be possible, however, if we make the necessary preparations, not just in the long-term, but in the now and in the short-term."

ACI forecasts that rising incomes in emerging markets with large populations and large land masses or numerous islands - where aviation is the only practical form of mass transportation - will help propel global traffic to new heights in the coming years.

New aviation hubs have begun to overtake the more mature markets of Western Europe and North America with ACI forecasting that the world's airports are expected to welcome 10.7 billion passengers in 2022, the year in which emerging and developing markets are predicted to surpass advance markets.

North America's short-term compound annual growth rate is 3.6%, with the United States representing 90% of the growth and Canada representing 10%. The growth rate translates to more than 350 million additional passengers for this mature market, with 77% of those additional passengers being domestic traffic.

"At the end of the day, the underlying challenge for our industry is capacity," she said. "We have a lot of infrastructure to modernize and build if we're going to welcome travellers in the next five years alone.

"America's airports have more than $128 billion in capital needs through 2023 according to this ACI-NA study Terminally Challenged: Addressing the Infrastructure Funding Shortfall of America's Airports. As the title suggests, more than 56% of the needs are inside its aging terminals.

"The study tells us that the existing system fails to meet US airport infrastructure investment needs for modernizing and expanding airport capacity. It calls for reforming the federal rules to give airports the ability to make the right capital investments at the right time. In no other country is the passenger facility charge so low; in the US, it is capped at $4.50 compared to a typical charge of $25 worldwide."

While ACI does not promote any particular form of airport ownership, ACI studies show that airport privatization has become an important investment vehicle for the development of infrastructure to accommodate air service demand; to contribute to community and national economic vitality; and to enhance the customer passenger experience.

"Public-Private-Partnerships are a great tool for some airports," Angela Gittens said. "It has been applied globally in important aviation markets, including the mature aviation market of Europe, but also some of the fastest growing markets including, Brazil, China and India.

"We are beginning to see some private investment in the United States at New York Port Authority at JFK Terminal 4 and at La Guardia airports."