Air travel in Europe is beginning to show signs of recovery, with ACI EUROPE today revising its forecast for 2022 to an expected -22% decline on pre-pandemic levels.
It had previously predicted a -32% decline for 2022, but notes that its upward forecast comes with hefty warnings, with a full recovery to pre-pandemic volumes not expected until 2024.
The airport association’s loud note of caution is based on what it calls “the triple jeopardy” of the return of geopolitics, worsening economic conditions and the threat of new Covid variants.
ACI EUROPE also stressed the differing outcomes for different airports which lie behind these numbers. This reflects a traffic recovery being still largely driven by leisure traffic and fuelled by ultra-Low Cost Carrier (LCC) capacity expansion, an asymmetrical exposure to traffic downside risks (in particular to those relating to the war in Ukraine) and staffing issues disproportionately affecting larger airports.
Olivier Jankovec, director general of ACI EUROPE said: “At the moment, the performance of passenger traffic is trending along our high-case optimistic scenario on the back travel restrictions lifting across many markets and strong Summer pent-up demand.
“But the history of the past three years suggests caution, especially as we still do not have an established playbook in Europe – let alone globally – on how to deal with future COVID-19 variants when it comes to travel.
“And beyond the immediate operational challenges from staffing issues, there is no escape from rising geopolitical tensions and stagflation fears meaning risks for air traffic only go one direction – down.”
In the full 2022 year base case scenario, European airports will still have 540 million fewer passengers than in 2019 – resulting in a cumulative loss since the beginning of the pandemic of 3.7 billion passengers. This is equivalent to the total passenger growth achieved over 36 years prior to the pandemic.
If the associated slump in airport revenues and continued financial weakness are factors behind current operational challenges, sharp inflationary pressures are only adding more challenges for airport investment in sustainability, digitalisation and capacity.
ACI EUROPE notes that it is critical that governments and regulators see beyond feuding over financial percentage points and ensure that Europe’s airports are able to generate the cash flows and restore the balance sheet strength needed to avoid an airport investment crunch.
Go to Source...