The International Air Transport Association (IATA) has warned that impending charge increases by airports and air navigation service providers (ANSPs) will have a damaging effect on international connectivity while also stalling recovery in air travel. Confirmed increases scheduled by airports and ANSPs have already passed the US$2.3 billion mark, while if all proposals tabled came into effect, that figure could multiply tenfold.
“A US$2.3 billion charges increase during this crisis is outrageous. 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 charges increases—must be top of the agenda for every airport and ANSP. It is for their customer airlines,” said Willie Walsh, IATA’s Director General.
As an example, Europe’s skies are covered by 29 individual ASNPs, most of which are state owned. Collectively, they are looking to recoup €8 billion (US$9.3 billion) from carriers to compensate for lost revenue during the current pandemic. This figure is on top of an intended 40% increase in charges planned for 2022. Meanwhile, London Heathrow Airport is looking to increase its charges by 90% in 2020 and Amsterdam’s Schiphol Airport is looking to increase its charges by 40% over the next three years.
The principal problem for airlines with these increases is the current level of debt accrued during the pandemic. Globally, US$110 billion of financial support provided needs to be paid back, so an increase in infrastructure costs could see multiple carriers fail. Instead, the IATA wants airport and ANSPs to implement sustainable cost control measures, tap shareholders, access capital markets, and seek government aid as a means to counteract the financial effects of the pandemic.
