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Airports, travel bodies clash over charges

K Raveendran

There is a certain confrontation developing between Airports Council International, the umbrella boy of airports, and the International Air Transport Association (IATA) regarding what the association considers as high airport charges.

At the just concluded annual general meeting of IATA, the apex body for the promotion of air travel, warned that plans to increase charges by airports and air navigation service providers (ANSPs) will stall air travel recovery and damage international connectivity.

IATA said the increase in charges by airports and ANSPs had already reached US$2.3 billion and the amount could multiply by tenfold if the proposals were approved. Such an increase during a crisis was ‘outrageous’, IATA director-general Willie Walsh said in a statement.

The Airports Council has taken serious objection to the IATA conclusions and sought to counter the association’s criticism is out of context.

ACI World Director General Luis Felipe de Oliveira said: “After a period that saw unprecedented collaboration and unity of airports and airlines in surviving this crisis and rebuilding passenger confidence, it is disappointing to hear this tone of statements coming from IATA. Claims made about the airport industry are out of context and don’t reflect the efforts made by airports to support the aviation ecosystem during the pandemic.”

“Airports have also experienced enormous financial stress and had to make drastic cuts to keep afloat. And in many jurisdictions, airports did not receive the same level of support compared to air carriers. To keep facilities running and safe to operate cargo and humanitarian flights during the pandemic, for example, airports incurred large costs. Fundamentally, airports will always remain infrastructure-intensive businesses—this translates into a high ratio of fixed costs,“ he added.

In support of its claims, ACI cites the results of a recent survey, which talked about measures taken by the airports industry to support the airline community during the crisis.

According to the survey, airport operators spanning all regions of the world and different airport sizes in terms of traffic levels showed that the majority of airports—nearly 70%—had implemented some form of discount or incentives in their airport charging schemes to address the impacts of COVID-19 and support a recovery. Also, during 2020, many airport operators deferred or waived certain airport charges in support of their airline clients.

ACI says that according to IATA’s own data,  there was actually a decrease in user charges as a share of airline costs. An analysis of charges, which contain both air traffic control and airport charges, shows that these charges are only approximately 5% of airline cost items in 2020, and this share decreased from pre-COVID 2019 levels.

“Overall, airports are also businesses in their own right that have suffered great financial stress during the COVID-19 crisis and the historic downturn of passenger traffic. In fact, this may be a moment to rethink the economic oversight of airport charges to something that is more reflective of market conditions allowing for risk to be shared across airlines and airports. Airports will remain infrastructure-intensive businesses—which means inevitable high fixed costs which must be maintained for the benefit of passengers and the communities that airports serve. We will continue to collaborate with our airline partners and other stakeholders to rebuild a sector that is resilient and sustainable—but it needs to be fair for the entire aviation ecosystem,” the ACI statement said.

 

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