The stakes are high; guidance for airport business recovery

Sabrina Guerrieri by Sabrina Guerrieri | Aug 23, 2021

With the easing of local travel restrictions and the rollout of vaccinations worldwide, air travel is slowly showing signs of recovery. ACI World’s latest data for June 2021 reveals that global passenger traffic increased by 13.2% over the previous month, supporting the sentiment that many are eager to travel and to connect with others – particularly during the summer months.

While there are yet many unknowns, such as how the new delta variant might see this trend flattened or temporarily reverse, airports are better equipped to deal with COVID-19-related obstacles on the long-term path to sustained recovery.

The quicker the recovery from the pandemic, the quicker travel and tourism can do its share in generating its otherwise healthy portion of the world’s GDP and contribute to the socio-economic well-being of communities in all regions.

According to Aviation Benefits Beyond Borders, aviation supported 87.7 million jobs in 2019 (pre-pandemic) and US$3.5 trillion, or 4.1%, of the world’s GDP. That’s in addition to aviation’s support of the UN Sustainable Development Goals and the UN’s broader 2030 Agenda for sustainable development.

The stakes are high for the industry to thrive again, and airport business recovery is at the center of ACI’s focus.

Transferring to airport operations recovery

ACI World continues to work with governments, international organizations, and industry partners to mitigate the effects of the pandemic and return to a thriving business. And ACI continues to a partner with its World Business Partners to develop tools and guidance to help airports in their commitment to providing safe, secure, and efficient travel in the recovery phase and beyond.

For general guidance, the Airport Operations and COVID-19: Business Recovery, Version 3, sponsored by Honeywell, covers all areas of airport operations and helps airport operators choose and implement measures that might be appropriate according to their local circumstances. The guidance includes information on health passes and vaccinations, as well as risk management when returning to operations, with a particular focus on human factors during recovery.

The possible loss of operational and technical knowledge resulting from the layoff of experienced staff, combined with other factors such as the pressure of increased workloads, fatigue or stress related to COVID-19, and job uncertainty, will increase the probability of human error. The guidance offers practical recommendations to manage related risks as traffic volumes increase and staff are brought back into their operational roles to manage daily operations.

Investing in infrastructure and more infrastructure

There are many challenges on the recovery road. The adverse impact on traffic, and thus revenue, has had staggering effects on the financial health of airports. The enormous revenue losses caused by the pandemic have imposed an additional obstacle to the pre-COVID-19 capacity challenge wherein the future air transport demand threatens to outstrip current and planned airport infrastructure.

The Global Outlook of Airport Capital Expenditure, supported by Hamad International Airport and developed in collaboration with Oxford Economics,shows that approximately US$2.4 trillion in airport total capital investments will be needed to address the long-term trend in passenger demand to 2040.

If longer-term capacity constraints are not addressed through capital investment, ACI World estimates that a reduction of up to 5.1 billion passengers globally by 2040. For every million passengers airports cannot accommodate due to airport capacity constraints in 2040, 10,500 fewer jobs and $346 million less in Gross Domestic Product would be the result.

In line with the airports’ commitment to net zero carbon emissions by 2050, recovery will require significant investment in new greenfield airports. It will require innovative approaches, appropriate incentives, and flexibility in organizing and securing financing, such as green bonds or public-private partnerships.

Diversifying revenue streams with cargo

However, airports have proven to be resilient throughout their history – from deregulation, to privatization, to evolutions in carriers and airport management – and continue to adapt.

During the past 16 months, many airports have managed to sustain or even grow their cargo operations during the pandemic, which has proven crucial in providing liquidity for airport operators. As airports come out of the pandemic and look to ensure long-term financial sustainability through the diversification of their revenue streams, cargo is an important area to be explored.

The Developing Cargo at Airports guide, prepared in collaboration with Netherlands Airport Consultants (NACO) and InterVISTAS, enables airports that have not yet tapped into the potential of cargo to better understand and identify opportunities and help those airports that currently have extensive cargo operations with the re-formulation of their cargo strategy where needed.

Joining the movement of digital transformation

Historically speaking, it is perhaps technology has been the leading cause of change in the industry, and this holds true today. The COVID-19 crisis necessitates new systems and processes that are more efficient and touchless, enabling quick recovery and future growth.

Digital transformation can offer efficient solutions to managing health issues, restoring passenger confidence, containing costs, and making better use of resources, all while increasing sustainability, improving passenger experience, and maintaining safety and security. Failing to transform the business of airports while leveraging existing and new technologies runs the risk of inadequately adapting to evolving customer needs and losing competitive edge.

The second edition of the Airport Digital Transformation Handbook provides advice on focus areas of technology adoption and how to approach digital transformation, and case studies and has been adapted to include the challenges and opportunities brought by COVID-19.

Partnering with ACI

ACI values the support of its World Business Partner which have, particularly during the pandemic, sustained the development of ACI world product and services related to airport business recovery. The ripple effects of our partnerships are felt not only in airports, but in the aviation industry, and the communities that we serve. For information on these sponsorship opportunities, please contact us.

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Sabrina Guerrieri

Sabrina Guerrieri

Manager, Communications, ACI World
Sabrina Guerrieri's main responsibility is to assist the Director General, Chair and selected Directors with their speaking engagements for various ACI and external events.
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