The International Air Transport Association is warning that planned increases in charges by airports and air navigation service providers (ANSPs) – including NavCanada – will stall recovery in air travel and damage international connectivity.
Confirmed airport and ANSP charges increases have already reached US$2.3 billion, says IATA, and further increases could be tenfold this number if proposals already tabled by airports and ANSPs are granted.
“A $2.3-billion charges increase during this crisis is outrageous,” says IATA Director General Willie Walsh. “We all want to put COVID-19 behind us, but placing the financial burden of a crisis of apocalyptic proportions on the backs of your customers, just because you can, is a commercial strategy that only a monopoly could dream up. At an absolute minimum, cost reduction – not charge increases – must be top of the agenda for every airport and ANSP. It is for their customer airlines.”
A case in point, says IATA, is found among European air navigation service providers, the majority of which are state owned, which are collectively looking to recoup almost $9.3 billion from airlines to cover revenues not realized in 2020/21 during the pandemic downturn.
“Moreover,” states IATA, “they want to do this in addition to a 40% increase planned for 2022 alone.”
Other examples include:
• Heathrow Airport pushing to increase charges by over 90% in 2022
• Amsterdam Schiphol Airport requesting to increase charges by over 40% over the next three years
• Airports Company South Africa (ACSA) asking to increase charges by 38% in 2022
• NavCanada increasing charges by 30% over five years
• Ethiopian ANSP raising charges by 35% in 2021
“Today I am ringing the alarm,” says Walsh. “This must stop if the industry is to have a fair opportunity at recovery. Infrastructure shareholders, governmental or private, have benefited from stable returns pre-crisis. They must now play their part in the recovery. It is unacceptable behaviour to benefit from your customers during good times and stick it to them in bad times. Doing so has broad implications. Air transport is critical to support economic recovery post pandemic. We should not compromise the recovery with the irresponsibility and greed of some of our partners who have not addressed costs or tapped their shareholders for support.”
IATA says some regulators have “understood the danger being posed by the behaviour of infrastructure providers,” pointing to regulators in India and Spain that have successfully intervened on the increases proposed by airports and an Australian Competition & Consumer Commission warning in a recently published report that increasing charges to recover lost profits from the pandemic will demonstrate airports systematically taking advantage of their market power and thereby damaging the vulnerable airline sector’s ability to recover at the expense of both consumers and the economy.
To that end, IATA is urging airports and ANSPs to apply solutions to address the financial impact of the pandemic that include implementing sustainable cost control measures, tapping shareholders, accessing capital markets, and seeking government aid.