"For Europe's airports the recovery is cash intensive and revenue weak"

I think it has been slower than needed because States have continued to impose travel restrictions that were not risk-based. They did not take into account what we have learnt from previous waves of COVID, in particular the fact that travel restrictions proved totally ineffective at stopping the spread of the virus and its variants.

Omicron might not be the last variant. So I hope we will be able to define a playbook for future variants that really takes into account the experience we’ve gone through so we will be able to avoid further harsh and unecessary travel restrictions.

Our aeronautical revenues are driven by passenger traffic and in 2020 we had a drop of 70% in passenger volumes, throughout the European airport community. Last year was interesting because although it was still a crisis year – at just 42% of 2019 numbers it could hardly be described as “a recovery” – there was a performance gap between the larger and smaller airports. And that reflects the fact that most intercontinental markets remain closed and the transatlantic market only opened in November. So whatever recovery there was, it was mainly Intra-European, which benefited more smaller regional airports.

From a national perspective in 2021 Finland was at -80%, the UK at -78% of 2019 traffic levels while Greece, at -47%, was the best performing market. The first quarter of 2022 was very much impacted by Omicron but at the end of February we saw an easing of travel restrictions. March was the best month since the pandemic, in terms of recovery, at -34%, and looking towards the summer we’re quite bullish, judging from the capacity that airlines plan to put into the market.

Airports have received limited financial assistance from States, compared to other sectors, so they were not able to keep as many people on the payroll as they would have liked. This has varied from country to country. In France, for example, where the State has probably been the most generous across the European Union, there has not been the same scale of problem as there has been in other countries like the UK.

And we are worried about the summer because we see seasonal peaks being very extreme, which means punctuality is deteriorating. We are also concerned that ATC delays are mounting because of the implementation of new procedures in France and the geopolitical situation with Ukraine.

Airport economics is closely linked to these new operational patterns and peaks. If you have to scale up capacity to accommodate surges in traffic – which is very high over a very short period of time – while your overall volume of traffic remains below pre-pandemic levels, the means for airports the recovery is cash intensive and revenue weak.

Airports have had no other choice but to increase debt, which is now at a level of 200% more than a few years ago. Even before the pandemic the revenue we were generating from aeronautical operations did not cover our costs.

Our airline partners won’t like to hear this but the only way is to increase airport charges to a level that allows us to be financially stable and will allow us to invest in the future: de-carbonisation, digitalisation and capacity enhancement.

Airlines are now increasing their fares and being open about their plans to pass on increasing fuel costs directly, especially as there will be an extra cost for sustainable aviation fuel which will be mandated by the EU regulation.

So, if airlines are able to increase costs to their customers I don’t see why airports should not be able to do the same.

Some of these cost reductions were linked to reduction in volumes of traffic but others were structural cost reductions and these will remain, so it means we have become more efficient. Transformation, de-risking and resilience are the key words for airports now looking at redefining their business model and securing their future.

Transformation means decarbonisation and digitalisation. We must find a way to restore long-term airport planning and development because during the crisis we became much more focused on the very short term.

With de-risking and resilience there’s no magic wand. Airports need to diversify revenue sources as much as possible. On the aeronautical side this means trying to have a diversified airline portfolio, which is becoming more and more difficult when two major low-cost carriers are grabbing market share in quite an impressive way.

And network carriers have retrenched structurally. In terms of planned capacity for the summer as of early April, Ryanair was up 21% compared to 2019. Wizz Air was 46% up. Air France/KLM was two per cent higher but Lufthansa was 12% down and IAG four per cent down.

I think we will see a lot of airports looking at non-aeronautical revenue generation even beyond the airport perimeter, if that’s possible.

There are perhaps some new opportunities emerging from the decarbonisation agenda with airports acting as energy hubs for their local communities. This is something many major airports, such as Amsterdam/Schiphol and Aeroporto di Roma and Groupe ADP, are looking at. We also have new opportunities in urban air mobility which will pave the way for new forms of connectivity and diversification of revenues.

And the concept of “total airport management” and closer operational integration between airports and ATM, in particular – but also with airlines for ground movement and ground handlers – will get a new impetus as a result of this crisis.

Decarbonisation will require massive investments if we are to reach our net zero emission 2050 target.

Many airports are going into solar. But if airports have to depend on the grid for their energy then this is out of their control. But change is happening here, too, and the decarbonisation agenda is for all sectors of the economy so the pressure is also on suppliers.

As far as airports are concerned I am not worried about scope one and two emissions, the emissions that are under their direct control. Airports in Europe have been working on reducing these emissions for the past 12 years through Airport Carbon Accreditation and 57 have already achieved carbon neutrality, but there is no doubt we will need more support.

About EUR 700 billion was distributed by the European Union to Member States through the Recovery Fund to support those sectors most impacted by COVID and facing major challenges of decarbonisation. Hardly any airports benefited from that.

I think we still have this problem at the EU level with an agenda and an ambition which is right but where we don’t actually walk the talk when it comes to providing the right enabler. We need more public support or better economic incentives.

As to whether we will soon face a systemic capacity crunch, I think we have to see how the recovery plays out. And how demand will be affected by, in particular, the Fit for 55 regulatory package, which is pushing for the decarbonisation of the sector but will come with major cost increases.

In terms of how these costs will impact demand, I think the jury is still out. The European Commission has not made a cumulative impact assessment of the different legislative proposals under Fit for 55 that will impact aviation. The Council and European Parliament are deciding on these regulatory proposals without having a clear view as to their impact on the economics of the sector.