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NEWS Last modified on May 22, 2019

Europe's regional airports face network, economic and green challenges

Some of the biggest challenges facing Europe's regional airports have came under the microscope at the 12th ACI Europe Regional Airports Conference & Exhibition in Krakow.

Delegates learnt that over the past 10 years, Europe's regional airports have welcomed an additional 251 million passengers – more than the annual traffic of Europe’s three busiest airports (London-Heathrow, Paris-CDG and Amsterdam-Schiphol).

Indeed, through proactive route development strategies involving incentives and rebates to airlines and competing with other airports across Europe for direct/point-to-point air services, they have boosted the direct connectivity of their communities by +28.8% since 2014.

Revealing the figures, ACI Europe director general, Olivier Jankovec, said: "Regional airports are putting hundreds of local communities not just on the European map but also on the global one.

"They are essential – and in most cases irreplaceable – engines of economic regeneration and development.
Janky
"Today, there is no escaping the fact that to develop tourism, attract inward investment and create local jobs, an airport is a vital part of the equation.”

However, while this is all good news and regional airports bring undisputed benefits to their communities, they also face significant challenges.

Route and network development is one particular challenge, which has become harder this year, said Jankovec.

In fact, apart from Low Cost Carriers (LCCs) moving upmarket into primary airports, airlines are generally becoming more risk-averse – up-gauging, focusing on higher-yield markets and increasing capacity contingencies for ATM disruptions.

Consolidation is also playing its part – with no less than seven European airlines having gone bust since last September. As a result, smaller regional airports are seeing their direct connectivity fall by -2.9% this summer.

Meanwhile, economic sustainability remains an on-going concern for many regional airports – especially at a time when the European Commission is reviewing its State Aid Guidelines.

“Traffic levels largely shape the cost and revenue profiles of airports and thus directly impact profitability," noted Jankovec.
Pax walking
"Smaller regional airports are clearly at a disadvantage there. They lack economies of scale and incur significant sunk costs – and also generate lower commercial revenues than larger airports since they serve smaller and less affluent markets.

"These are defining structural factors which the Commission will need to keep in mind in the review of its State aid guidelines.”

Another area of concern is climate are the renewed calls for aviation to be taxed at EU level in relation to UN IPCC's report on the impact of air transport on climate change.

Jankovec said: “There is no doubt that aviation collectively needs to up its game when it comes to climate action. But, while taxing aviation to curb demand looks like an easy fix for some, the reality is that it does little if anything to decarbonise air transport.

"In fact, it would primarily impact regional connectivity, hurting smaller communities and lower income citizens. Air routes serving smaller regional airports would be the first to be axed, as these are typically the least profitable for airlines.

“Taxing aviation raises serious issues of social and territorial inequality – the very themes that are driving public debates and politics across Europe right now.

"Doing so would actually question the core EU objectives of fostering cohesion and economic integration. It is an unavoidable fact that these objectives rely on affordable and extensive air connectivity.

"The challenge of greening aviation deserves better than that. It must be addressed in an effective and inclusive manner.” 

 

 

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