ACI World Director General Angela Gittens: “The airport capacity crunch is no longer a figure of speech.”

INTERNATIONAL. Airports Council International (ACI) World has published its annual Airport Key Performance Indicators (KPIs) report, based on final results from the 2017 financial year.

A key finding was that non-aeronautical activity accounted for 39.9% of airports’ income worldwide, with aeronautical revenue at 55.8% and non-operating revenue at 4.3%.

Global airport revenues grew by 6.2% in the year, lagging behind the 7.5% growth in passenger traffic, to reach US$172.2 billion.

ACI also revealed the key indicator of US$7.08 in non-aeronautical revenue per passenger, with aeronautical revenues per passenger at US$9.95. Worldwide, total cost to the airport per passenger was found to be US$13.69.

ACI World said that, beyond physical capacity constraints, “disproportionate regulatory regimes that hinder flexibility in setting the right level of charges represent an additional impediment to airport development and investment in infrastructure”.

Industry return on invested capital (ROIC) stands at 7.4%. 80% of airports handle fewer than a million passengers per annum and 94% of these airports are loss-making.

“Global passenger traffic has reached record levels as airports continued to make a crucial contribution to furthering economic development and global connectivity,” ACI World Director General Angela Gittens said.

“While strong competitive forces continue to drive innovation and improvements in efficiency and service for passengers, airports face the challenges of meeting the continuing global growth in demand for air services. The airport capacity crunch is no longer a figure of speech. The question of financing new infrastructure is becoming the most fundamental one for the industry.

“The disparity between large and small airports, however, is a serious challenge when it comes to questions directly impacted by the level of traffic – profitability, investor attractiveness and overall competitiveness in attracting resources. The challenge for our industry remains that 80% of airports in the world are small, with high traffic volumes concentrated in only a handful of locations.

“This means there is wide disparity when it comes to profitability. Although the airport industry is profitable on the aggregate level, two thirds of airports are in the red with 94% of all loss-making airports handling traffic volumes below one million passengers per annum. Thus, developing the necessary strategy to enhance traffic growth is fundamental in generating a positive economic return. While smaller airports have spare capacity and can easily accommodate additional traffic, most bigger airports are significantly constrained and require immediate expansion contingent upon appropriate financing mechanisms.”