22-Jun-2012 12:11 PM

ACI Europe sees worsening trading conditions for Europe’s airports

ACI Europe noted (21-Jun-2012) worsening trading conditions for Europe’s airports, stating that after a dynamic recovery in passenger traffic in 2011, traffic growth has significantly slowed since the start of 2012. Details include:

  • Distribution of growth: The slowdown predominantly affects airports in EU countries, where passenger traffic stalled in Apr-2012 at +0.7%, with 11 national markets posting negative figures. Conversely, growth at non-EU airports has remained extremely dynamic with +9.1% in passenger growth in that same month – driven by airports in Russia, Turkey, Iceland and Georgia;
  • FY2012 outlook: ACI Europe stated that with heightened uncertainty over the euro zone crisis and the global economy edging towards recession, demand for air transport in Europe is likely to be "sluggish, at best". In the coming months, the traffic gap between the EU and the New Europe is likely to narrow, as a result of spillover effects and the significant exposure of non-EU airports to EU markets. As a result, for FY2012, ACI Europe forecasts total growth for passenger traffic at +2% and a decrease of -2% for freight traffic;
  • Evolving structure of European aviation market: ACI Europe noted the structure of the European aviation market continues to evolve, reflecting airlines’ renewed efforts to adapt to equally challenging trading conditions. ACI Europe said, "Market exits have been significant since the beginning of the year, with the demise of several airlines. For those still in business, market discipline is stronger than ever with a focus on yields and capacity control - including for Low Cost Airlines which have tended to shift aircraft between airports rather than growing capacity";
  • Airline-airport relationships: ACI Europe said the current environment is "pointing towards an increasing ability of airlines to exercise dominance in their relations with airports". ACI EUROPE, releasing a study carried out by Copenhagen Economics , said a shift that has taken place in the airport-airline relationship amid aviation liberalisation, evolving airlines’ business models, digitally empowered passengers and commercially focused airports;
  • Economic and financial performance: ACI Europe noted a recent reduction of airport charges, meaning the improvement in the revenue environment for airports has mainly been driven by commercial revenues. Meanwhile, the cost environment has kept deteriorating, despite a strong focus on internal cost cutting, resulting in a 10% reduction in staff costs. In particular, capital costs have increased by 23%, adding EUR1.7 billion to the cost base despite a 17% reduction in investments. [more - original PR]

ACI EUROPE: “The Olympics and the European Football Championship are just about the only ray of light for many EU airports at the moment. The Euro zone crisis has brought passenger traffic to a standstill and already sent freight traffic into recession. Airports are faced with a worrying combination of negative determinants affecting air traffic - many of which are specific to the EU. Beyond the debt crisis, volatility in fuel prices, national aviation taxes and the EU Emissions Trading Scheme are all adding to the pain...Airports have seen a 46% decrease in the number of new air routes opened in 2011. This is a strong indication that airlines are moving from being supply-driven to being demand-driven. This also means increased network volatility and seasonality for airports, as well as continuous and effective pressure on the level of our charges," Olivier Jankovec, director general. Source: Company statement, 21-Jun-2012. 

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