US. Long-time advertising incumbent for the Port Authority of New York and New Jersey (PANYNJ) airports JCDecaux has responded to the contract changing hands to Clear Channel Airports by saying it would not enter into an agreement that “does not make financial sense in the current climate”.
The contract covers John F. Kennedy International (JFK), LaGuardia (LGA), Newark Liberty International (EWR), and New York Stewart International (SWF) airports.
Earlier Clear Channel Airports had said that the new 12-year deal with PANYNJ “had aligned their interests with contract terms that set the stage for both parties to achieve their goals under the current conditions and for years to come and could become the new industry model”. The agreement contains a two-year transition period to account for the impact of COVID-19 and the passenger traffic recovery at Port Authority facilities. The actual MAG due each year, as well as capex spend, after the two-year transition period will be dependent upon passenger traffic at JFK, EWR, LGA and SWF.
“As the global leader in airport advertising, JCDecaux remains committed to this important out-of-home channel, however, the Group will not move forward with an agreement that does not make financial sense in the current climate.”
In a terse statement, JCDecaux said that it had held the PANYNJ advertising contract for over 30 years and is proud of the media programmes the Group successfully implemented over three decades.
It added: “The world is still suffering from the effect of COVID-19 where stringent health measures continue to affect the movement of passengers through airports. During this lockdown period, the historic drop in air travel, as well as severe economic uncertainties, led companies to react immediately and reduce their advertising spend at an unprecedented scale.
“Currently, passengers from over 40 states in the US have travel restrictions in place when entering New York or New Jersey and are also subject to a wide-ranging international travel ban. Even after travel restrictions are lifted it is anticipated that there will be a significant lag before travel recovers to pre COVID-19 levels.
“Since the onset of COVID-19, JCDecaux has taken immediate and dedicated action on operating and financial levers to mitigate this decline and preserve cash, including but not limited to rent reliefs, aggressive cost management, reduced capital investment, tight control over working capital requirement and dividend cancellation.
“As the global leader in airport advertising, JCDecaux remains committed to this important out-of-home channel, however, the Group will not move forward with an agreement that does not make financial sense in the current climate.”
