Nearly 200 airports in UK and Europe could go bust due to collapse in air travel
Nearly 200 airports across the UK and Europe are at risk of going bust within months due to the dramatic collapse in air travel caused by the coronavirus pandemic, the European airports trade body warned on Tuesday.
Airports Council International Europe (ACI Europe), which represents airport operators, said it estimated that 193 out of Europe’s 740 commercial airports face “insolvency in the coming months if passenger traffic does not start to recover by the year-end”.
The trade body said the at-risk airports employed 277,000 people and generated collective annual revenues of €12.4bn (£11.2bn).
Olivier Jankovec, the director general of ACI Europe, said the figures “paint a dramatically bleak picture” for the future of the aviation industry, which has already suffered tens of thousands of job losses.
“Eight months into the crisis, all of Europe’s airports are burning through cash to remain open, with revenues far from covering the costs of operations, let alone capital costs,” Jankovec said. “Governments’ current imposition of quarantines rather than testing is bringing Europe’s airports closer to the brink with every day that passes.
“In the midst of a second wave, ensuring safe air travel continues to be our primary concern. It’s crucial that we reduce the risks of importation and dissemination as much as possible. But surely we can do a much better job of reducing those risks by testing air passengers rather than with quarantines that cannot be enforced.”
A spokeswoman for ACI Europe said the organisation would not name the airports at risk for fear of sparking panic among employees and travellers. However, she said most of the airports at greatest risk were small regional airports, which have seen the sharpest declines in passenger numbers. Airports across mainland Europe and all home nations in the UK are thought to be included on the list.
Passenger numbers at Europe’s airports in September fell by 75% compared with the same month year earlier. ACI Europe said total “lost passengers” since the pandemic began now stood at 1.3 billion.
While smaller airports are most at risk, ACI said “larger European airports and hubs are not immune from the critical financial risk”.
“They have cut costs to the bone and have resorted to the financial markets to shore up balance sheets and build emergency war chests. This sudden increase in debt - an additional €16bn for the top 20 European airports – is equivalent to nearly 60% of their revenues in a normal year. This, along with the fact that these airports had to make thousands of highly skilled workers redundant, clearly jeopardises their future.”
The UK’s aviation regulator is reported to have warned the owners of Heathrow that it could be nationalised if they do not provide fresh funding to help it weather the pandemic.
The Civil Aviation Authority (CAA) said that without emergency cash from Heathrow’s shareholders, including the sovereign wealth funds of Singapore and Qatar, the airport may face a state takeover to save it from collapse.
In a consultation paper this month, the regulator said that it had considered Railtrack as a “relevant example” when objecting to Heathrow’s request to increase fees.
The nationalisation threat was reported by the Sunday Telegraph, although the CAA said the report was false.