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Airport Economics

COVID-19: Global harmonization the key to a successful restart and sustained recovery

May 27, 2020

estimated  mn.

The aviation industry has never faced a crisis like COVID-19.

As the outbreak began to spread, the priority of airports was on the protection of the health and welfare of travellers, staff, and the public, and to minimize the opportunities for dissemination of disease while maintaining efficient operations.

The travel restrictions and suspension of flights that were introduced as part of a global effort to contain the spread of the virus, however, had a pronounced impact on the industry.

It is predicted that there will be a reduction of more than 4.6 billion passengers with the resultant estimated decline in total airport revenues on a global scale estimated to be more than $97 billion for 2020.

Airports are important engines of economic growth, wealth creation, and employment and the COVID-19 pandemic’s effect on the industry and broader economy has halted the airport industry at global level.

This is an existential threat to airports and airlines, and it has had a crippling effect on the wider air transport industry, travel and tourism.

Even as the global aviation industry has navigated this crisis, it has focused on how recovery could be encouraged and what steps could be taken to lay the groundwork for the industry to begin to return to pre-COVID-19 levels.

This is a slow and methodical process as many players in the industry have been facing a fight for survival.

The initial global response to address the pandemic’s economic impact

COVID-19 has been a truly global issue that has required global action to alleviate the unprecedented economic impact of the pandemic.

As the widespread and dramatic economic impacts of the pandemic became apparent, ACI World urged policy relief measures to safeguard essential operations and to protect millions of jobs around the world.

The contribution made by the aviation industry to global economic prosperity is immense. Aviation supports 65.5 million jobs around the world, including 10.5 million people employed at airports and by airlines, and supports $2.7 trillion in world economic activity.

Urgent tax relief and direct financial assistance was called for because preserving the continuity of operations and protecting aviation jobs today will result in a faster economic recovery tomorrow.

The protection of airport charges and revenues, tax relief, concession fee waivers, the temporary suspension of slot usage requirements, measures to ensure the continuity of air cargo operations, and comprehensive financial relief including cash injections are just some of the measures that should be considered by governments.

While some governments around the world have made some moves to assist the airport sector, more must be done to assist them to weather the far-reaching economic ramifications of the crisis and help lay the foundation of a balanced recovery.

The entire aviation ecosystem has been heavily impacted, so a coordinated programme of recovery is essential to ensure the survival of the airport industry as well as the aviation industry.

The green shoots of recovery begin to appear

There are signs that the aviation industry is making small gains towards recovery.

It has been reported that domestic travel in China and other countries such as India, the United Kingdom, and Ghana is beginning to pick up which has provided some much needed positivity for the industry.

Recovery is going to be a long process, however, and ACI World expects the return to business for the aviation industry to come in phases:

  1. initial restart with limited number of passengers
  2. recovery with a slow increase in passenger volume
  3. gradual scale-up in capacity, and then
  4. return to more normal passenger volumes.

Key to these phases will be passenger confidence.

Airports and airlines have started to introduce new processes and measures to build confidence that air travel remains safe and that the health of passengers and staff remains the number one priority.

Measures such as the wearing of face masks by passengers and staff, the careful monitoring of boarding and disembarkation with curbs on baggage, and thermal screening in the terminal, among others, have been introduced in some places.

Any new measures that are introduced at airports will need to evolve through the phases of recovery until, eventually, the industry will arrive at “the new normal” in terms of the end-to-end passenger journey.

But there is currently no single measure that could mitigate every risk that could be created by the restart of air travel.

A globally consistent, outcome-based approach, therefore, will be the way to balance risk mitigation with the need to unlock economies and to enable travel.

Harmonization is key to a sustained recovery

Above all, collaboration, cooperation and consistency are key, firstly for the industry to successfully restart, and then for sustaining a balanced recovery.

ACI is a key part of the International Civil Aviation Organization (ICAO) Council Aviation Recovery Taskforce and will continue to work with global partners to advocate for the harmonization of measures, processes and procedures that are introduced as a result of COVID-19.

Governments and industry regulators have a crucial role to play.

They need to ensure that any new processes that they require airports to introduce to help foster restart must be continually reviewed so they can be adapted to changing data and medical evidence.

This will ensure that they remain aligned with those deployed through other modes of transport and society.

ACI World published a business restart and recovery guide for airports

To assist all airports in the process of beginning operations again, ACI World has created a new guide: Aviation Operations during COVID-19 – Business Restart and Recovery.

This provides best practice examples and guidance for both business restart and recovery, as the industry prepares for the “new normal” post-COVID-19.

ACI World recently collaborated with the International Air Transport Association (IATA) to layout the principles of restart and recovery but the new publication goes into greater detail to guide airports.

It builds on the important principles created by IATA and ACI to provide guidance on all aspects of airport management and operation to enable the restart of operations while maintaining the confidence of staff and travellers.

Airports are not expected to use all the options provided but the advice on implementing best-practice measures that might be appropriate, depending on local circumstances will be very useful.

Aviation Operations during COVID-19 – Business Restart and Recovery

Read more

Predicting the speed of the bounce

While it is very hard to predict at this point, how long before travel and tourism will bounce back completely, we are seeing encouraging signs around the world.

Some reports suggest that the levels of traffic seen in 2019 may not return for years but a sustained recovery will depend on how well industries and governments are able to adopt a pragmatic approach.

The implementation of practical, efficient, and workable health-related and operational measures which are supported by medical evidence, are risk-based and outcome-driven, will be key.

Crucial to this process will be continued coordination between governments, clear definition of responsibilities, and clear communication to the travelling public. 

ACI will continue to identify opportunities to join with its global partners to help guide the harmonization of new measures and processes in support of a balanced and sustained industry recovery.

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