What next for airports in the age of COVID

Updated: Nov 15, 2020

By John Kaponi

Managing Partner

Airport operators across the globe will not in immediate term avert heavy financial losses brought on by the massive reduction in passengers flying. This has been a catastrophic 12 months, 2020 described as the annus horribilis for aviation. Can a pro-active communications approach do anything to help the airport operators?

Aviation analysts have upgraded projections at the scale of the losses with IATA increasing their projections of the financial impact on airlines this year from $63bn to $252bn and then to $314bn, all in a little over one month. With these heavy losses the airport groups and airlines must find a way to drive passenger traffic back or face potentially a knockout blow.

The greatest impact must be the loss of passenger traffic both in the immediate term and over the months and years of the recovery ahead. For airports, no passengers mean limited aeronautical revenues and no non-aeronautical revenue (i.e. retail, food, beverage, car parking) which can account for 50% plus of their income.

Airports have few opportunities to substantially reduce their costs as so many are related to the major infrastructure that is a fundamental part of an airport – terminals, runways, taxiways, car parks, and all the embedded systems and technology. Numerous airports have consolidated terminal operations allowing them to close some terminals; reducing some of the variable costs.

Communications and savvy media campaigns frankly at this juncture will not be enough to get people back on planes if they are to face long quarantines when arriving from destinations. The recent results by retailer WH Smiths underlined by the chief executive of WH Smith “he does not expect a Covid-19 vaccine to make any improvement to its travel business for the next six months”.

WH Smith, which has 1,174 travel shops in airports and railway stations around the world, fell to a £280 million pre-tax loss for the year to the end of August compared with a £135 million profit in 2019. Sales slid by 27 per cent to £1.02 billion, reflecting the sharp drop in footfall at its high street outlets and the closure of its travel shops

A priority for airports is to work across the industry and regulatory bodies to align guidance and practices to protect staff and passengers. Airports could be working with behavioural scientists to identify initiatives to aid in maintaining social distancing; however John Holland-Kaye, CEO of Heathrow Airport Ltd, recently wrote in the Daily Telegraph:

“Forget social distancing – it won’t work in aviation or any other form of public transport, and the problem is not the plane, it is the lack of space in the airport…. Just one jumbo jet would require a queue a kilometre long."

Social distancing of 2m on an aircraft would reduce capacity by approximately 75%, making operation uneconomical. Social distancing cannot be a core part of any future strategy for mass transport systems be it aviation or rail.

Despite government aid and various schemes to prop up airlines and airports, communications and media alone will not save jobs. Governments must step-up to the mark and ensure there will be a civil aviation left after the elusive COVID-19 vaccine is found, if not to provide international travel again, but to add momentum for the global economic fightback after this catastrophe.