Regional airports have saved outperforming different segments of the market because the starting of the yr, having recovered nearly 93% of their pre-pandemic (2019) passenger volumes – in comparison with 87% for hubs and different bigger airports.
CHANIA – On the annual gathering of Europe’s regional airports and their enterprise companions happening at the moment and tomorrow in Chania, Crete, the most recent business evaluation from ACI Europe has described a market section which is concurrently outperforming with a optimistic summer time forward, while additionally warning of disparities within the tempo and power of restoration and continued monetary challenges.
The 14th Annual ACI Europe Regional Airports Convention and Exhibition – hosted by Fraport Greece, operator of 14 regional airports throughout the Greek mainland and islands – gives the chance to overview buying and selling circumstances and deal with the important thing challenges confronted by regional airports in offering sustainable air connectivity in help of native improvement, territorial equality and cohesion.
Constructive but disparate visitors outlook and rising competitors
Regional airports have saved outperforming different segments of the market because the starting of the yr, having recovered nearly 93% of their pre-pandemic (2019) passenger volumes1 – in comparison with 87% for hubs and different bigger airports2. This displays visitors dynamics nonetheless pushed by leisure and VFR (Visiting Buddies & Relations) demand, boosted by the enlargement of Extremely-Low Value Carriers and predominantly counting on the intra-European, North African and Transatlantic markets.
Addressing the rapid visitors outlook, Olivier Jankovec, Director Normal of ACI Europe commented: “The Summer time season seems to be very optimistic for regional airports total as they’re seeing airline seat capability simply above pre-pandemic ranges – which isn’t but the case for bigger airports3. Passenger demand retains defying inflationary pressures, particularly document will increase in air fares. On the similar time, disruption dangers throughout the aviation eco-system have receded. That is the results of earlier planning, huge recruitment and improved wages – though air visitors administration (ATM) capability and social unrest stay a major concern in some nations.”
However Jankovec cautioned over the permanence of great gaps in efficiency each throughout nationwide markets and particular person airports: “The visitors restoration has include extra volatility and in addition extra disparity. That is largely all the way down to a lot elevated airport competitors on a pan-European stage, because the market is shifting in the direction of fewer and ever extra highly effective airways – with Low-Value Carriers now very a lot dictating the destiny of regional airports.”
Monetary viability problem
Attaining monetary viability has at all times been a problem for smaller regional airports as a consequence of a lot of structural points, together with visitors seasonality and demand imbalance throughout the yr, in addition to increased mounted prices and the dearth of economies of scale achieved by bigger airports. However the huge losses accrued in the course of the pandemic, coupled with the renewed airline purchaser energy which ends up in suboptimal revenues from consumer costs imply prospects for improved monetary viability are murky – particularly for airports with lower than 1 million passengers per yr4.
“Consumer costs levied by regional airports have been persistently reducing over the previous 3 years and at the moment, in actual inflation-adjusted phrases are 13.4% decrease than in 2019. In the meantime airline fares have elevated by +26% to date this yr. This isn’t sustainable shifting ahead – particularly given how the present inflationary atmosphere and rate of interest rises are weighing on our prices. What’s at stake is the flexibility of airports to maintain investing in sustainability, digitalisation and capability. And whereas we might want to hold the flexibilities afforded by present EU State support guidelines, we additionally want airways to pay a fairer value for the usage of our services” stated Jankovec.
Transferring sooner to Web Zero regional air connectivity
Adherence to the consumer pays precept additionally pertains to sustainability and particularly decarbonisation. A document 207 regional airports throughout Europe at the moment are licensed for carbon administration and discount underneath Airport Carbon Accreditation5 – the institutionally endorsed world customary – in comparison with 146 a yr in the past. Past decreasing scope 1 & 2 emissions and adhering to their associated Web Zero CO2 targets, airports are additionally more and more supporting and driving reductions in scope 3 emissions6.
However there is no such thing as a escaping the truth that extra sources and accompanying measures will probably be wanted to progress sooner, particularly in view of the ambitions and content material of forthcoming EU Rules. Regional airports are particularly susceptible to the influence of FIT FOR 55 – as all associated measures apply absolutely to intra-European routes on which they rely. Analysis from Oxera7 exhibits that passenger demand will fall by shut to twenty% at regional airports – inevitably compromising the connectivity they supply to their communities.
Marco Pernetta, Chair of ACI Europe’s Regional Airports Discussion board and CEO of Innsbruck Airport stated: “While FIT FOR 55 is an absolute necessity, Governments and coverage makers nonetheless want to take a look at and deal with the dangers concerned by way of cohesion, territorial equality – and in the end the chance of backlash in opposition to local weather motion. Because the European Fee failed to supply a complete influence evaluation of FIT FOR 55, these have been largely ignored – at our personal peril. Regional airports now account for 35% of complete direct air connectivity in Europe, up from 29% ten years in the past. We want a European technique for sustainable regional air connectivity which ensures regional aviation can rapidly grow to be the testbed for the decarbonisation of aviation, together with crucial compensating measures. This may be accomplished nicely earlier than rail improvement might successfully come shut to supply any appropriate various on the scale and scope required.”
ACI Europe moved evaluation on this very important market section ahead at the moment with the publication of its report, European Regional Airports: Sustainably Connecting Folks, Locations and Merchandise. The report explains the important thing position performed by regional airports in Europe particularly in the course of the COVID restoration together with key passenger and visitors information. The report additionally explores a number of the key regulatory hurdles confronted by regional airports and the coverage frameworks that should be put in place to deal with their wants, together with financing their decarbonisation.
1 January and February 2023.
2 Airports with greater than 25 million passengers every year (2019).
3 Whereas airline seat capability for the present Summer time season stands at +1.5% above pre-pandemic (Summer time 2019) ranges at airports with lower than 10 million passengers every year (mppa), it stays at -14.9% for airports between 25 and 10 mppa and at -4.9% for airports above 25 mppa.
4 The European Fee evaluated the state support framework within the 2014 Aviation Tips, discovering that many airports with lower than 1 million passengers will proceed to want working support past the top date of 2024. ACI Europe has known as for visibility on the way forward for the Aviation Tips nicely earlier than 2024.
5 Airport Carbon Accreditation web site.
6 “ACI Europe Steerage on airports’ contribution to web zero aviation – Decreasing Scope 3 emissions and supporting the implementation of Vacation spot 2050”.
7 “Evaluation of the influence of the Match for 55 insurance policies on airports” analysis, from Oxera.
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