Asia-Pacific Airports Remain in Financial Distress, ACI Warns

Airports Council International (ACI) Asia-Pacific claims that the airports in the region are still in “distress” even though passenger traffic is increasing as Asia reopens following the widespread relaxation of travel restrictions related to the COVID-19 pandemic.

Although Asia-Pacific airlines’ business prospects have significantly improved recently, the region’s airports are still having difficulties. Their poor financial health poses “a threat to the sector’s full recovery,” according to the organization’s recently released Airport Industry Outlook.

In the Asia-Pacific and the Middle East, according to ACI Asia-Pacific, fares “have increased across sector distances and the different markets served,” resulting in higher yields for airlines.

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According to the organization, at least one Asia-Pacific or Middle Eastern airport was reached by 14 of the top 15 busiest international routes in the world in 2022. The London Heathrow (LHR)-New York Kennedy (JFK) route was the lone exception. Compared to 2019, “the average airfare was up 77%” on those 14 routes, while it increased only 21% on the LHR-JFK route, according to ACI Asia-Pacific.

The organization warns that the Asia-Pacific airlines’ rising revenue and high yields are “in sharp contrast to the financial health of airports.”

Stefano Baronci the ACI Asia-Pacific DG – “The financial health of airport operators continued to be in distress, with 10 consecutive quarters in the red both in terms of EBITDA and net profit margin” through the fourth quarter of 2022. The average 53% increase in [Asia-Pacific] airfares throughout 2022 compared to 2019 “reveals a fundamental imbalance in the financial stability” between airlines and airports, “despite significant efforts by airports to freeze or lower airport charges in 2022.”

According to the group, the “surging” airfares in the Asia-Pacific region are caused by “fuel prices, wage inflation, an inadequate seat supply compared to demand, and a lack of airline competition on particular routes.”