What are the development prospects for airports in a context of market contraction?
The European airports association estimates that nearly 200 airports are on the verge of bankruptcy. With traffic 86% below 2019 levels last November, ACI Europe's 500 or so member airports passed the one and a half billion passenger loss mark in March.
The crisis is placing airports in real economic and financial difficulties. More broadly, all the players in the airport sector are affected by the current situation. However, encouraging signs remain, and avoid the total asphyxiation of this essential part of the economy.
The 'predictable-unpredictable' future
The first notable consequence of the health crisis was the immediate collapse in passenger numbers. Restrictions at national borders led to a drastic reduction in the number of international flights and thus in the flow of travellers. In response, airlines deployed 'flight plans' to avoid an outright collapse of long-haul traffic. Less crowded planes continued to fly. This allowed airlines like Air France to operate at between 50% and 80% of their pre-crisis capacity. Some low cost airlines have even managed to maintain close to 95% of their past capacity through agile deployment to a large number of destinations.
In addition, the whole revenue structure of the airport retail sector has been severely affected. When an airport operator puts a terminal out to tender, it requires guarantees from the commercial operator, which are based, among other things, on the net turnover of shops and boutiques. However, with the fall in the number of flights and therefore of passengers, these commercial operators have been deprived of sources of income. Airports, perhaps even more than airlines, are paying the highest price for the crisis. For small and medium-sized terminals, the situation is alarming, as it is difficult for such an infrastructure to subsist on only a few flights per day, thus questioning the airport model as a whole.
The question of the intrinsic evolution of the airport model
Despite the multidimensional crisis, there are encouraging signs for the sector, which is doing better than the airlines and aeronautics. The freight market in particular is up by 4.4% compared to before the crisis, due to the growth in world trade (masks, vaccines, etc.).
In addition, since March 2020, meetings and business trips have been replaced by the widespread use of videoconferencing. But the constraints of such a format are being felt: lack of confidentiality, difficulty in building a relationship of trust, etc. You cannot build the bond that cements a team and a long-term relationship virtually, without meeting and exchanging in a format that is now commonly referred to as "face-to-face". Thus, contrary to popular belief, the business passenger will return to the forefront.
The major difference with previous crises, particularly that of 2007-2008, is that the current economy is doing well overall. The CAC 40 is in the green and many companies not exposed to the direct consequences of the virus are in "conquest" mode. In addition, the end of the crisis will see an intense catch-up effect, based on savings accumulated by households and a feeling of relief, which has been severely contained until now. This should be reflected in the high purchasing power of the average traveller.
The main model whose relevance must be questioned is the hub model. It appeared in the early 1990s and is a flawed concept for the airport investor as it is sub-optimal. And the current period requires a focus on pure growth. To achieve this, the airport sector will need to evolve the myriad of players present at airports, foremost of which is retail. Airport managers will need to diversify their retail skills, which must become a terminal development issue. For example, Aéroports de Paris was built so that passengers could get to their plane as quickly as possible, giving priority to efficiency over purely commercial logic.
The issue of hubs is closely linked to that of the ecological transition, which is not negligible for the airport sector today, although it will barely impact transit flows in the long term. In other words, night trains will never replace air travel. On the other hand, the right balance must be found for a lucid, realistic and balanced development of airports and flows.
With which actors and which investors?
French airport know-how is widely recognised abroad, notably through Aéroports de Paris and Vinci aéroports (the world'sleading private airport operator). Despite the current situation, major investors such as Bouygues, Eiffage and Vinci will continue to invest in the sector, particularly in large regional airport projects, which are destined to grow, even though they have been badly affected by the crisis. It is therefore appropriate to encourage investment and reward risk-taking.
930 million in total for the 500 ACI Europe airports, compared to nearly