Regional airports from across Europe have gathered in Dalaman for ACI Europe’s regional airports conference and exhibition (RACE), where they are calling on the EU and European countries to address economic, connectivity and policy challenges impacting the sector.
This year’s event is focused on the emerging challenges for regional airports, including ensuring safe and secure operations, adapting to the upcoming implementation of the Schengen Entry-Exit System (EES) which is expected to come into play later this year, managing traffic seasonality, boosting non-aeronautical revenues, rising operational costs and the ongoing need for state aid and ensuring sustainable growth. Underlining the impact these challenges have on smaller airports, ACI Europe highlights that while passenger traffic at larger regional airports stands at +11.7 per cent above pre-pandemic levels, the focus must be on smaller regional airports where volumes have collapsed and are currently -35.1 per cent below 2019 levels.
LCC growth
According to Andrea Andorno, CEO Torino Airport and chair of the regional airports’ forum, these figures reflect major structural shifts in the European aviation market, affecting both the demand and supply sides.
He underlined that post-pandemic growth is “driven by low-cost carriers (LCCs) which are putting pressure on regional airports due to demand for lower costs.”
ACI’s data shows that this summer the seat capacity deployed by LCCs remains at -27 per cent below summer 2019 for smaller regional airports, but has increased by +29 percent at larger ones. “While these airlines have become essential for developing regional air connectivity, supporting tourism diversification, and bringing European together, they are essentially running ‘beauty contests’ across the European airport network, squeezing regional airports like never before,” said Andorno.
Financial viability due to high fixed costs, aviation taxes and the lack of economies of scale are also challenges impacting airports. “Looking ahead these financial challenges are only set to worsen,” said ACI Europe’s Director General, Olivier Jankovec. “While inflationary pressures continue to drive an increase in costs, airport charges have decreased in real terms since 2019, standing at -12.1 per cent for smaller regional airports and -5.9 percent for larger ones.”
Jankovec added that independent studies have shown that smaller regional airports relying on LCCs will be the most affected, with their passenger traffic decreasing by up to -20 percent by 2050. “This will result in much degraded connectivity for our regional communities, directly harming cohesion and territorial equality – and, beyond that, undermining Europe’s competitiveness, as regional airports currently account for 35 per cent of Europe’s air connectivity.”
Calling for an EU policy reset, Jankovec emphasised the need to safeguard aid for smaller regional airports through the revision of the EU Aviation State Aid to allow smaller airports to continue accessing operating aid beyond 2027. He also called for a robust EU Sustainable Transport Investment Plan to deliver an effective EU Sustainable Aviation Fuel (SAF) industrial policy, including a book and claim mechanisms, the earmarking for aviation ETS revenues for decarbonisation and increased SAF allowances under ETS.
Referencing how sector-specific taxes are harming the sector, Jankovec also called for the abolition of national aviation taxes and the safeguarding and further development of Open Skies Agreements.
Living in age of risks and uncertainties
Other challenges for Europe’s regional airports include supply risks from aircraft delivery delays and spare parts availability, airline consolidation and network rationalisation, as well as traffic seasonality and the US attacking multilateral trading systems. These factors combined, said Jankovec, “will lead to increased volatility making it difficult to predict what the winter will look like for the airport community.” He also pointed to the struggle for regional airports to develop non-aeronautical revenues with smaller airports underperforming in terms of their ability to develop commercial revenues.
He also emphasised that “decarbonisation remains an imperative with more than 250 regional airports certified for carbon reduction on the Airport Carbon Accreditation scheme. “Regional airports are also leading as testbeds for electric and hybrid aircraft trials,” he said but simultaneously warned that an estimated EUR 1.6 trillion is required for Europe’s airports to achieve net zero emissions by 2050.
Finally turning his attention to Turkiye as the host country for this year’s RACE, Jankovec reiterated a call for the country’s revision of some of its aviation policies to preserve and boost the ability of Turkish regional airports to contribute to the country’s 2023 Tourism Strategy, as well as its economic resilience and development. Addressing these issues, he said, requires a more liberal approach to foreign airline access, as he suggested that “outdated restrictions on market access and traffic rights should be abolished.” He also stressed the need for airports to be able to “reflect inflationary pressures and investment costs into their user charges,” as he concluded that both measures are critical for long-term sustainability.
