ECONOMICS Total passengers 2010 vs 2007 (preliminary)
This is good news for the airport industry, which has an interest in a
healthy and sustainable airline industry and one that is not constantly threatened by bankruptcy, but it also weighs on passenger numbers and growth. Profi table airlines, optimistic consumers and growing economies
will be the ingredients of the foreseeable future and these support a positive outlook. Yet airports are challenged to look ahead fi ve, 10, 20 years and to guess what the right airport needs to look like. That means vision, risk and investment. In early December 2010, Airbus predicted that the global
commercial aircraft fl eet will double within 20 years. During the same period ACI forecast global passenger numbers will exceed 10 billion passengers. Airports are the cornerstones of that growth and will be hard pushed
to deliver the infrastructure to enable expansion in an effi cient and qualitative way. Yet it remains unclear how the additional infrastructure will be funded and whether it will be available in time or whether capacity shortfalls will slow down air traffi c growth. Governments need to step up to the plate and defi ne airports as
strategic assets that are key to economic growth in the future. To this end, they need to invest heavily in airport infrastructure themselves or provide a framework that incentivises private operators and investors to engage in the airport industry. Letting things run its course will further widen the spread of dynamics
between old and new markets and mean that Europe and North America will fall behind and lose competiveness against other regions. The future investment needed in the airport sector is signifi cant and
will further add to a daunting amount of debt of $280 billion. The industry will no longer be able to look to the public sector for
funding. It is the private sector that needs to be attracted to airports even more than it currently is. Thus, return on investment will be the watch words in the airport industry going forward.
34 AIRPORT WORLD/FEBRUARY-MARCH 2011
The industry will need a lot of cash and the invariable cost of
capital will continue to rise relative to operating cost, which will make it more diffi cult to protect the bottom line. Looking at the global economy, risks remain, and they are
signifi cant. Sovereign debt, particularly in Europe, but also in the US and Japan, necessitate public budget austerity which means spending cuts and higher taxes that weigh on disposable income and public sector employment. Questions remain over the health of the banking sector in Europe
and the United States as they are closely tied to the housing market, which has not yet recovered. New bubbles may be growing, spurred by ‘easy’ and cheap money
in housing and stock markets, and, of course, in commodities where we are witnessing a super-cycle. That pushes infl ation higher and may pressure central banks to
raise interest rates sooner rather than later, which will result in a slowdown of lending and economic output. Demand for air travel remains a dependent variable and
the industry continues to operate at the mercy of the global economy, weather, nature, unions, geopolitics and, last but not least, the price of oil. That being said, air transport will remain a growth industry and
whatever setbacks may occur, the industry continues to exhibit extraordinary resilience and bounces back stronger and better than before. Airports need to contribute their part in the recovery of the global
economy by providing switch points of trade and commerce that generate economic value and act as catalysts of growth.
More information Financial data in this article was taken from the 2010 ACI Airport Economics Survey which is available for order on
www.aci.aero.
AW
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