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Listed Airports during Covid-19: an AviaSolutions insight
Most sector observers and investors will be familiar with the operating model at the larger airports, which in more normal circumstances feature annual incremental traffic growth with revenues closely linked to volume, and operating costs generally more fixed. EBITDA and EBITDA margin typically improve accordingly.
However, in these far from normal times caused by the Covid-19 pandemic the typical relationships between an airport’s volume, revenue and operating costs are fractured, certainly in the short-term.
In Q2 2020, airport passenger volumes dropped more sharply than at any time in living memory. The outlook for the return of air traffic remains very uncertain with business and leisure air travel still highly vulnerable to national and local rates of Covid-19 infection.
Aeronautical revenue at the larger airports is typically subject to economic regulation (e.g. price caps) which are linked to capital investment plans and volume projections. In the near-term this relationship is also broken, with most regulators deferring regulatory pricing resets until some degree of market stability returns.
Equally challenging is how airports can manage their operating cost base in the short term given the precipitous fall in traffic and the absence of visibility as to how the aviation market will recover in the coming months and years. There are also significant one-off cash costs associated with re-structuring an airport business at a time when airports are seeking to preserve liquidity.
A number of listed European airport groups have published 2020 half year results in the past month. Whilst at first glance the half-year passenger volume and EBITDA results do not appear too alarming, the quarter-on-quarter results illustrate just how much of a challenge these airports are facing as we move into Q3 2020. In this bulletin we present and compare the latest financial results from the following airport groups: AENA, Groupe ADP, Fraport, Heathrow and FHWG.
Click here to download free report (PDF)
Ireland West Airport route development support
In 2022 and 2023, Ireland West Airport engaged Avia Solutions to prepare business case pitches to be used in airline negotiations for potential new services to connect West Ireland with North America.
The pitches focussed on the catchment and economics of the Ireland West region, along with connecting market potential and links to the US market:
- QSI route forecast and demand estimates from Ireland West Airport catchment.
- Point-to-point demand analysis (Sabre MI) between Ireland and US.
- Connecting demand beyond intermediary airports to selected North American destinations.
- Business, trade and tourism links between Ireland and US.
Our air service development support assisted Ireland West Airport’s engagement with the airline and helped inform productive discussions about potential new services.
IFC appoints Avia Solutions in Central Asia
In 2021, the International Finance Corporation (IFC) appointed AviaSolutions to provide the Governments of Kyrgyz Republic and Republic of Tajikistan with strategic analysis and recommendations to inform their efforts to recover and expand air connectivity post-pandemic, to ultimately facilitate tourism sector recovery and growth.
- The 12-month project included in-country missions to Bishkek and Dushanbe where AviaSolutions held meetings, workshops and interviews with IFC representatives and key stakeholders from the airports, CAA, airlines, tourism agencies and government ministries in Kyrgyz Republic and Tajikistan.
- The scope of works included in depth analysis and reports on the enabling environment for air connectivity in the two countries, including regulatory and legal framework, assessment of national and local air transport policy, bilateral air service agreements, airport charges / incentives and infrastructure assessment, socioeconomic considerations including tourism sector analysis.
- We conducted research and analysis of the potential for route network recovery and development and made recommendations for prioritised routes in the form of an Air Service Development plan for each country. We provided guidance on incentivising and engaging with airlines, including a full implementation plan.
COVID-19: Jan-Dec 2021 Passenger traffic impact – Europe
Our free December 2021 update reviews the passenger traffic impact of COVID-19 on selected listed European airports throughout 2021. The potential impact of the Omicron variant of concern is also discussed.
Click here to download free PDF report
To find out more, please get in contact with one of our expert aviation consultants.
Covid-19: Jan-Aug 2021 Passenger traffic impact – Europe and UK
In an update to our traffic review of listed European airports, this free report reviews Jan-Aug 2021 performance and assesses the outlook for this year and beyond. It also includes a UK airport performance review.
Click here to download free PDF report
To find out more, please get in contact with one of our expert aviation consultants.
Covid-19: Q2 2021 Passenger volume impact – Europe and UK
In an update to our traffic review of listed European airports, this free report reviews Q2 2021 performance and assesses the outlook for this year and beyond. It also includes a UK airport performance review.
Click here to download free PDF report
To find out more, please get in contact with one of our expert aviation consultants.
20% off our usual rates
AviaSolutions is 20 years old this month.
The last 12 months have been unprecedented in aviation. We understand how challenging it has been for our airport and airline clients in particular.
To celebrate our 20th anniversary, we would like to offer any client that enquires about a potential new project with us before (and including) 16th March 2021, 20% off our usual rate card, regardless of the project commencement date.
Just use the contact form opposite to make an enquiry and one of our aviation consultants will be in touch.
Interesting aviation facts that you may not know
AviaSolutions is 20 years old today.
Over that time we have been fortunate to have worked on some fascinating projects, fostering value-adding relationships with our clients and partners. Highlights include over 60 airport transactions, the creation and launch of 3 new international airlines, and negotiating over 150 new routes for a range of airports.
During February we will celebrate this landmark with a weekly report full of fun facts and stories that we hope you find interesting.
How many of these aviation related facts do you know? Download the free document by AviaSolutions below.
Download Aviation Fun Facts PDF
To find out more, please get in contact with one of our expert aviation consultants.
UK Airports: Impact of Changes to Duty Free and Tax Free Rules
In September 2020, the UK Government announced that from 1st January 2021 (post-Brexit), British passengers travelling to EU countries will be able to take advantage of duty-free shopping, meaning that passengers will be able to buy duty-free alcohol & tobacco products in UK airports, ports, international train stations and on-board ships, trains and planes.
However, at the same time, the UK Government is also ending tax-free sales in airports of goods such as electronics, beauty and clothing for passengers travelling to non-EU countries, though we understand that this does not apply to alcohol and tobacco products.
To read more about the potential impact of these significant changes on UK airports, download a free report by AviaSolutions below.
Click here to download free report (PDF)
To find out more, please get in contact with one of our expert aviation consultants.
Americas Region: Impact of COVID-19 in 2020 and beyond
The Covid-19 pandemic is a once in four generations shock to the aviation sector. The impact in 2020 was sudden and severe; passenger kilometres flown have reset to levels not seen since 2001.
This short overview provides a summary of the full 2020 impact in the Americas region and a look ahead to the potential implications for 2021.
Click here to download free report (PDF)
To find out more, please get in contact with one of our expert aviation consultants.
EMEA Region: Impact of COVID-19 in 2020 and beyond
The Covid-19 pandemic is a once in four generations shock to the aviation sector. The impact in 2020 was sudden and severe; passenger kilometres flown have reset to levels not seen since 2001.
This short overview provides a summary of the full 2020 impact in the EMEA region and a look ahead to the potential implications for 2021.
Click here to download free report (PDF)
To find out more, please get in contact with one of our expert aviation consultants.