Looking ahead to the new year: Airports’ sustainable recovery
14 January 2022
Luis Felipe de Oliveira, Director General of ACI World, looks back over the past two years and explains his outlook on the recovery and the importance placing sustainability at the core of the airport sector’s business strategies.
In just a few months it will be two years since the World Health Organization declared the COVID-19 outbreak a pandemic. Since then, daily life across the globe has changed with unprecedented impacts on the global economy, trade, and mobility. Practically all aspects of economic and social activity were disrupted — and many still are.
Air transport has remained one of the hardest hit global industries in 2020, and its restart has been slow, uneven, and challenging. The implications for the aviation sector are far reaching and the pandemic will likely affect aviation businesses, passengers, and airports for years to come.
Despite this, there is cause for some positivity. At the time of writing, several major markets are gradually reopening their borders to vaccinated travellers. The progressive reopening of borders in more and more countries sparked optimism that this trend could galvanise the recovery of the industry into next year. We will certainly be watching this closely as the new year begins.
Economic impact of COVID-19
Even with the positive news of certain markets re‑opening their borders, global passenger traffic in 2021 is still expected to reach only half of what it was in 2019, with total traffic for 2021 forecast to be only 4.6 billion of the 9.2 billion passengers served two years ago. Domestic passenger traffic continues to recover faster than the international market, expecting to reach more than 3.1 billion passengers by the end of the year, a level corresponding to 58.5 per cent of that achieved in 2019.
The pandemic, however, had a less severe impact on global air cargo volume, largely driven by the requirement for personal protective equipment (PPE) and the increase in online retail. Nevertheless, global air cargo declined by 9.6 per cent in 2020 compared to 2019, with 108 million tonnes handled in 2020.
We estimate that the world’s airports are expected to lose more than $111 billion in revenues this year, $3 billion more than projected in the previous assessment in July 2021. While the new data worsens the expected annual financial performance of the world’s airports, especially for the fourth quarter of the year, ACI still expects each quarter of 2021 to show an improvement compared to the previous one.
In this context, it is important to keep in mind that the aviation industry is an ecosystem and the financial impact of the pandemic on the industry is, and continues to be, extremely challenging for the whole sector—particularly as most of the stakeholders of the supply chain received limited or no government support. Airports are no different. Overall, the sector needs to work together to address the needs of all parts involved to continue to provide sustainable social and economic development for the communities we serve. Working together with our partners in this ecosystem will be key for the industry recovery.
Outlook on recovery
Under the current projection and considering the slower than expected fourth quarter of 2021, global domestic passenger traffic is still expected to reach 2019 levels in late 2023, but global international passenger traffic will require an additional year and will reach 2019 levels only by the end of the third quarter of 2024.
The speed of the recovery continues to depend substantially on the level of co‑ordination pursued by national governments worldwide. While the global travel market is still mostly depressed, at the time of writing this, more and more countries are indeed moving towards the gradual reopening of their borders to vaccinated travellers.
In line with ACI’s advocacy at the ICAO High‑level Conference on COVID-19 that took place in October 2021, ACI will continue to call on governments to take action to implement risk-based, pragmatic approaches such as mutual recognition of vaccines and interoperable solutions for proof of health status.
Placing sustainability at the core of recovery strategies
As we are all aware, things are not quite what they used to be; many facets of life and business have changed, including airports. Ensuring the recovery for the airport sector will require that we place sustainability – which includes social, environmental, and economic pillars – at the cores of our business strategies.
Airports have been working on sustainability for decades, but I’m proud to report that they are now transforming this stewardship into business conditions, strategies, and objectives. Considering the massive revenue losses incurred by airports, it is inspiring to see that our members have not lost sight of their environmental initiatives, remaining committed to a post-pandemic sustainable world.
A prominent example is ACI and our global membership’s commitment this year to a net zero carbon goal by 2050 – a commitment that was born from the ACI Long-Term Carbon Goal Study for Airports. Demonstrating the leadership of the industry, ACI was the first global aviation organisation to commit to a 2050 net zero carbon goal. This was followed by a net zero goal by the global aviation sector, facilitated by the Air Transport Action Group (ATAG), which brought together the world’s major aviation industry associations, including ACI World, as well as the largest aircraft and engine manufacturers. As we collectively move forward, support from governments and collaboration with relevant stakeholders will be crucial in achieving our goal.
ACI World has continued to work with our Standing Committees, industry stakeholders, sponsors, and world business partners to develop timely and critical recovery guidance. We’ve focused on providing guidance for sustainable recovery via the Sustainable Recovery Best Practice and Case Studies which highlight the advantages of incorporating sustainability in recovery plans, including access to funding through government relief packages and sustainability-linked bonds.
Indeed, the finance community is calling for more uniformity and harmonisation on the ways stakeholders report on sustainability, including the material topics they choose to report on. Just ahead of our Annual Conference, we have recently released the Sustainability Strategy for Airport Worldwide, which builds on the ACI Europe sustainability strategies. It provides information on how sustainable aviation can contribute to the UN Sustainable Development Goals (SDGs) and the very first overview of the most relevant and commonly reported material sustainability topics. The guidance will help airports be ready for the implementation of local initiatives, which can be translated at the international level into common sustainability topics and objectives.
Policy Brief on modernising the global policy framework on airport charges
Key to a sustainable future is to ensure the efficient use of airport infrastructure as the industry recovers and grows. The ACI CAPEX Needs Report estimated that a total $2.4 trillion global airport CAPEX is required by 2040. As such, airports need to be able to set airport charges with a commercial focus to attract the level of investment needed and to signal whether users are willing to pay for these investments.
One of our featured guidance to cap the year is a new policy brief on the critical need to modernise global policy frameworks on airport charges. At the end of the day, policies on airport charges should be crafted for the benefit of the travelling public. Regulators must consider what is ultimately best for consumers. In many instances, this means ensuring that existing infrastructure is used as efficiently as possible, incentivising the sustainable development of airport infrastructure, and enhancing connectivity to generate socio‑economic benefits.
Looking ahead to 2022
As we ring in the new year, ACI will continue to evolve in step with the externalities affecting airports and travellers. We will continue to support our members on the road to recovery, both on the global stage – remaining dutifully committed to our mission to be the voice of the world’s airports.
Once again, aviation is an ecosystem – it is only by working together that we can build a sector that is resilient, sustainable, and that is fair for the entire aviation industry and for those that rely on it – our customers, the passengers. Let’s make sure that it works for them too. If there is a need for the movement of people, culture, and goods, airports will remain economic engines of growth for the communities they serve, providing critical social and economic impacts well beyond the runway. This is especially critical as the world rebuilds from the pandemic.
Luis Felipe de Oliveira joined ACI World as Director General in June 2020, bringing with him vast experience in commercial and technical aviation.
He successfully led the Latin American and Caribbean Air Transport Association (ALTA) between October 2017 and May 2020, promoting positive change in the organisation. Prior to joining ALTA, de Oliveira served as World Fuel Services’ Vice President Supply Development for Latin America and Caribbean, where he was responsible for improving World Fuel’s aviation fuel business in the region. He also served 12 years at Shell with a focus on Latin America and the Caribbean, and Africa and Europe, based in the Netherlands.
For 10 years, de Oliveira served IATA, leading fuel and airport campaigns with governments, oil companies, fuel service providers and airports for the Americas, Africa, and the Middle East regions, based in Switzerland.