Cloudy outlook persists for airport sector

The serious negative effects of the COVID-19 pandemic in the global airport sector looks likely to persist in the coming months, jeopardizing the Brazilian government’s plans to offer concessions for multiple airports in April. 

Revenue passenger kilometers (RPK), a measure of airline passenger volumes, contracted 65.9% globally last year, making it the worst year in history for air travel demand, according to the International Air Transport Association (IATA). 

In Latin America, RPK dropped 62.1%. Passenger traffic in the region represented 5.7% of global traffic. 

The outlook also remains negative for the sector. 

"Optimism that the arrival and initial distribution of vaccines would lead to a prompt and orderly restoration in global air travel have been dashed in the face of new outbreaks and new mutations of the disease," Alexandre de Juniac, IATA Director General and CEO, said in a release.

"The world is more locked down today than at virtually any point in the past 12 months and passengers face a bewildering array of rapidly changing and globally uncoordinated travel restrictions," added Juniac, underlining that the airline industry will require continued financial support from governments in order to remain viable.

AIPORTS AUCTION IN BRAZIL AT RISK?

The continued negative effects of the pandemic could threaten the plans of the Brazilian government to offer concessions for 22 airports around the country in April. 

"It’s possible that the government could opt to postpone the auction for a while, given the effects of the pandemic, but the sector, despite being the most seriously impacted by the pandemic, will return to pre-pandemic levels once there is mass vaccination and economic activity returns to normal," Allemander Pereira Filho, director of aviation consultancy Aircon and a former director of Brazil's civil aviation regulator ANAC, told BNamericas. 

The government is planning to hold the auction for the concessions on April 7. The airports in question are located in the country’s south, north and central-west regions, and the contracts will be for 30 years with combined investments estimated at 6.10bn reais (US$1.12bn). 

The government plans to offer the airports in three blocks, combining more profitable airports with less profitable ones. 

In recent months, the government approved financial support for several airport operators affected by the health crisis by reducing their concession fees.

Another possible problem with the concessions is the future passenger demand of many of the regional airports, which had far fewer passengers than their total capacity even before the pandemic.

"It’s highly likely that, over time, when they realize that demand at some of these airports isn’t growing, the companies that take over the airports will return the concessions to the government, as has already happened with the Viracopos and São Gonçalo do Amarante airports," Celio Lima, general secretary of the national union of airports workers (SINA), told BNamericas.