Announcing the Airport Council International Airport Economics Survey 2011
|Montreal, 12 January 2012 – ACI World Director General Angela Gittens is pleased to announce the release of the Airport Economics Survey 2011.|
Gittens stated, “As background on the financial results in 2010, as always, it is important to consider the traffic trends during the reporting period. Powered by a strong rebound in the global economy, the first half of 2010 was characterized by a major recovery in the global air cargo sector, more than compensating for the significant declines in the previous year. Passenger growth rates were robust and stable at an elevated level only temporarily dented by the ash cloud phenomenon in April 2010. Aircraft movement growth however was moderate pointing to higher aircraft utilization and nimble capacity management and expansion on the part of the airlines.”
Each year, ACI World collects key economic information from its members worldwide in order to produce valuable industry data and analysis concerning the financial performance of airports in Africa, Asia-Pacific, Europe, Latin America, Middle East, and North America. The ACI Airport Economics Survey has become an industry-wide and highly respected source of airport economic data.
The 16th edition of the ACI Airport Economics Survey presents data and analysis relative to airport operations for the financial year 2010 / 2011, based on ACI member input through a survey conducted in the 2nd and 3rd quarter of 2011. The survey generated responses from 604 airports that together handled 3.12 billion passengers or about 62 percent of worldwide traffic in 2010, providing unique and comprehensive insights into economics and finances of airports around the world.
Extrapolating from the survey results, ACI calculated worldwide total airport income in 2010 to have reached USD 101.8 billion, including an estimated USD 4.6 billion for the Middle East region. Hence, compared to 2009 survey results, industry revenue was roughly 7 per cent up in 2010 which is broadly in line with industry growth.
Aeronautical revenue from passenger and airline user charges accounted for 53.5 percent of industry-wide income, a similar proportion to 2009. The global airport industry generated USD 54.5 billion in aeronautical revenues in 2010 (including ground handling). Aeronautical revenue from passenger and airline user charges accounted for 53.5 percent of industry-wide income, a similar proportion to 2009.
Non-aeronautical revenues worldwide made up 46.5 percent of industry revenue in 2010, however this category includes non-operating income of USD 6.9 billion.
Gittens commented, “Non-aeronautical revenues are a vital component in the economics of airports. During the downturn the diversification of airport revenues cushioned the impact of lower passenger and freight volumes and safeguarded operating profits. Non-aeronautical revenues critically determine the financial viability of an airport as they tend to generate higher profit margins than aeronautical activities, the latter frequently representing a zero sum game or producing a deficit.”
Airports worldwide in 2010 incurred operating expenses in the amount of USD 56 billion or 55 percent of revenues. The largest expense item reported was personnel cost, accounting for 36 percent of operating expenses, followed by contracted services (outsourcing cost to third parties) as the second biggest cost item at 19 percent of total operating cost.
Capital expenditure at airports worldwide in 2010 was almost a third lower than predicted for 2010, with USD 26 billion were spent on airport upgrades or expansions of existing airport infrastructure. The markedly reduced capital expenditure is clearly a consequence of the global financial crisis which led many airports to scrap or cut down on capital programmes. Also, the crisis entailed tighter credit markets, lower commodity costs and more competitive bids that made financing harder to obtain or made construction cheaper, both putting pressure on expenditure.
For 2011, capital expenditure is expected to rise by 14 per cent to USD 29 billion.
In 2010, capital costs industry-wide (including depreciation) amounted to USD 32 billion or 31.5 per cent of total revenue, a slightly higher proportion than in 2009. 36 per cent of that cost is interest bound while the remainder (64%) constitutes depreciation.
In 2011 airports worldwide reported liabilities of USD 260 billion slightly less than 2010 partially owing to the reduction in 2010 CAPEX.
Financial performance of the global airport industry in 2011 is expected to have continued its growth trend. Passenger traffic growth will remain above 4% for the year with the more profitable international traffic growing by around 6%.
Looking to 2012 while there is a lot of uncertainty in financial markets as to whether governments will be able to contain the sovereign debt crisis in Europe, the consumer seems to be rather unfazed. Consumer confidence is resilient and spending is still growing year on year as the current crisis has not been adding to unemployment yet.
Therefore, the prognosis is that another year of growth lies ahead of the industry. Growth rates may be smaller, especially in the first half of the year, but overall airports should be in a good spot to grow revenues further. As far as the individual regions are concerned, the significant spreads in growth rates among the regions will homogenize further as economic growth in China and Brazil cools and the continuing political uncertainty in North Africa will continue to limit its growth opportunities. That being said, Asia-Pacific will remain the fastest growing region followed by Latin America, whereas North America and Europe will be rather muted.