ACI Europe calls for change in airport financial models and slot rules

Despite increasing air passenger volumes, airports association ACI Europe has warned “wide performance gaps” are part of the industry’s “new normal” and it continues to grapple with shifting market forces and EU climate policies. 

Speaking this week at the association’s annual congress and general assembly in Istanbul, ACI Europe director general Olivier Jankovec said geopolitical tensions, structural aviation market changes and “the decarbonisation imperative” are among the key challenges faced by airports in the region.

“Geopolitical tensions, the primacy of leisure & VFR demand coupled with ultra low-cost carriers’ continued expansion and full-service carriers focusing on their hubs and consolidating – all these factors are shaping airports’ fortunes, resulting in heightened competitive pressures.

“While our headline figures tell the story of passenger traffic finally surpassing 2019 levels – not even half of Europe’s airports (47 per cent) have actually fully recovered their pre‑pandemic volumes,” he said.

According to Jankovec, future-proofing the region’s airports will require a “decoupling” of financial viability and volume growth. He also stressed the importance of a ‘user pays’ principle to address climate action and capacity limitations.

“Europe’s ambitious decarbonisation policies will increase the cost of flying, which will inevitably impact demand. Coupled with the capacity constraints faced by many airports, this presents a unique challenge as our economic model remains largely dependent on continued volume growth,” he said. “This means we will need to decouple our financial viability from this growth logic – which in turn will require achieving growth in unit revenues.”

He added: “Increasing unit revenues to reflect the impact of climate policies is precisely what airlines are themselves starting to do, as shown by Lufthansa’s decision to add an ‘environmental cost surcharge’ to all its airfares as of next year.”

Jankovec also pointed to digitalisation, in particular AI and machine learning, to increase airports’ operational efficiency and urged for the reformation of slot rules in both the EU and the UK – a call echoed by ACI Europe president and CEO of SEA Milan Airports, Armando Brunini.

“With Europe accounting for half of the world’s most congested airports and consolidation set to reinforce the dominance of a few airline groups at larger airports, reforming current airport slot rules is a no-brainer,” Brunini said at the conference.

“In fact, these rules will be the defining factor for the competitiveness of the single aviation market in the years to come.”