ACI EUROPE


Airports cautiously optimistic as global pax growth continues


Despite the slowdown in important regional markets and airport capacity constraints, Airports Council International (ACI) has flagged the ‘persistence and resilience in passenger traffic demand’, as Luke Barras-Hill reports.


T


he delegate briefing notes for ACI’s 9th Annual Airport Economics & Finance


Conference & Exhibition in London, 20-22 March, struck a tone synonymous with the fragile global economic status quo. However, there is room for optimism. Global passenger


traffic


totalled approximately 7.6bn in 2016, TRBusiness learns. Europe’s airports alone handled a record- breaking 2bn passengers last year, with average growth of +5.1% spearheaded by EU airports (+6.7%), as reported recently. A keynote address from ACI World


Director General Angela Gittens updated delegates on key traffic results and performance indicators. She opened by stating that


economic uncertainty was hanging over the head of the global economy in 2016, whether it was caused by Brexit, the US presidential election, hostility in Syria, or the terror attacks on airports including Brussels. “Yet, we saw aviation adapting


and recovering,” she said, reminding delegates that since the end of the economic turbulence of 2009-2010, global passenger traffic had risen by roughly +5% on an annualised basis. This translates to combined


international and domestic traffic growth of +5.5%, in all regions except Africa (-1.9%) exhibiting gains in pax, with the Middle East (+9.3%) leading the pack. And global airport revenues are also keeping pace. “The slow yet persistent recovery


in the Euro area and the United States, combined with the resilience of aviation in emerging markets, in spite of the downside risks translated in gains to airport revenues of +6% to reach almost $152bn,” she said.


MAY 2017


Europe accounted for the largest share of global distributed airport revenues (35%), followed by Asia-Pacific (30%) and North America (19%). Airports located in emerging markets and developing economies saw an 11% rise in revenue, versus 4% in more mature markets. “Although we saw an absolute


change in revenue after factoring in inflation on a per passenger basis, revenues have changed very little – growth in revenues coincides with growth in traffic. “Worldwide, retail concessions


remain the leading source of non- aeronautical revenues of airports, representing 20% of total non- aeronautical revenue.”


Commercial growth slows During a breakout press session during the conference, Olivier Jankovec, Director General, ACI Europe, acknowledged the importance of growing commercial revenues. This was in response to a question from TRBusiness on


how ACI


Europe is dealing with the growing pressures facing Europe’s airports in the face of operational challenges (currently, 47% of Europe’s airports are loss-making), and ensuring airport charges for passengers and airlines remain competitive. However, he admitted: “Over


the last two to three years it has become much more difficult to grow commercial revenues on a per passenger basis in Europe. “The penetration of these


revenues is proving to be much more difficult than it used to be.” The competition from online coupled with the fact that airlines


Angela Gittens, Director General, ACI World addresses delegates at the recent ACI Airport Economics & Finance Conference & Exhibition held in London (Credit: Aviation Media)


are implementing more restrictive cabin bag rules are among a number of obstacles to improving incomes, with uncertainty caused by the latter impacting spending at the tills. On the continued consolidation


of the travel retail industry, Jankovec added: “With consolidation,


it’s


becoming more difficult to make a tailor-made approach, which is key in increasing the footprint and penetration of commercial revenues. “What we’re seeing in airports


now is if they have the capabilities, they want to have much more say and participation in the way concessionaires are working. “That’s why you’ve seen a lot


more joint venture agreements in recent years between airports and retailers.” «


Olivier Jankovec, Director General, ACI Europe, admits that growing airport’s commercial revenues on a per passenger level in Europe is becoming more challenging.


TRBusiness TRBUSINESS 39


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