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What are they thinking?

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October 1st 2021

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No-one should have been surprised by the International Air Transport Association’s (IATA) stinging attack on airports and air navigation service providers (ANSPs) with some of them accused of price gouging to recover pandemic losses at the expense of their airline customers. Read More »

Relations between the airline body and Airports Council International (ACI) have been volatile for years, admittedly with some periods of calm. The basis of the fractious relationship are airport charges and airports infrastructure projects. In the latter case, they pass on the cost of these huge investments to airlines.

At IATA’s AGM in Boston at the start of October, the airline lobby association’s director general, Willie Walsh, had little choice but to object long and loudly to these practices given what has been happening on the airport charges front in recent months, but particularly in Europe.

Plans by London Heathrow Airport to raise its charges by 90% certainly appear excessive. Naturally, airports and ANSPs were quick to react to Walsh’s comments. The most extraordinary comment came from ACI Europe director general, Olivier Jankovec, who said: “we should ultimately remember airlines can afford to pay airport charges.” Really?

On what basis can he substantiate this assertion given the world’s carriers have amassed losses of some $201 billion and have accumulated debt of more than $650 billion since the outbreak of the pandemic? It will take years for airlines to return to stable profitability and pay down debt, if there is not another global pandemic.

Worldwide, airports also have experienced dramatic declines in revenue that have resulted in big losses. The point is both sides should be helping each other for the sake of the industry. Airports should not be trying to exploit a bad situation. Airports are monopolies. Airlines, such as the major long-haul carriers flying out of the Asia Pacific, have little choice but to operate to them. They have to fly to destinations such as London Heathrow, Amsterdam, Frankfurt or even Los Angeles because that is where their customers want to go.

In normal times most of our region’s carriers served these destinations daily. Airport and air navigation service charges are a significant component of the cost of scheduled flights. Big increases in airport charges will further damage their bottom line as they strive to recover from the COVID-19 crisis.

In most jurisdictions, including Europe and the UK, airports have to consult airlines about airport charges annually and give several months of notice of proposed changes. It can only be hoped local regulatory bodies, such as the UK’s Civil Aviation Authority (CAA) in the case of Heathrow, can refuse to authorize increased airport charges at this time.

Associate editor and chief correspondent
Orient Aviation Media Group

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