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Airport Operator H1 2020 Financial Results: Passenger traffic slid faster than revenues

With more airport operators publishing their financial performance for H1 2020 online, we are able to grasp a clearer picture of the circumstances that the airport industry is struggling with, especially in the context of the COVID-19 pandemic.

In this short write-up, we have compiled data on the traffic and revenue performance of 53 airport operators around the world - airport operator subsidiaries are also listed as separate entities where available - which have publicized their financial performance for the first half of 2020 online.

While these airport operators had handled over 1.1 bil passengers in H1 2019, they handled over 440 mil passengers in H1 2020, which was 60.3% less than the H1 2019 passenger throughput.

The airport operators which saw the greatest decline in passenger traffic by over 80% on this list interestingly were subsidiaries of Fraport AG and which managed airports in areas very heavily dependant on international tourism - Greece, Antalya in Turkey, Tunisia as well as Burgas and Varna in Bulgaria.

It could also be observed that out of five airports that saw declines of less than 50% in passenger traffic from H1 2019, three were located in China - Guangzhou, Shenzhen and Xi'an. This is not surprising as Chinese domestic passenger traffic was reported to have started on a slow recovery by April 2020.

Therefore, the ability of local and national governments to manage the COVID-19 pandemic to the extent of the providing the right circumstances for a slow recovery also determines the level of decline in year-on-year passenger traffic for the first half of 2020.

The airport operators in this sample had generated US$21.1 bil in revenue in H1 2019, but the amount generated in H1 2020 was 45.1% less than that in H1 2019.

The airport operators that suffered that greatest year-on-year decline in revenues for H1 2019 - TAV Airports (Tunisia), Fraport TAV Antalya A.S and Fraport Twin Star - also experienced the greatest declines in passenger traffic over the period, indicating the importance of international passenger traffic to their businesses.

The importance of a fixed source of income that is not directly dependant on spend by airline operators/passengers should also be emphasized. This could come in the form of fixed rental payments from the airport concessionaires and other tenants.

Other sources of revenue to the airport that were less disrupted by the COVID-19 pandemic also included revenues from cargo operations.

At US$26.3, revenue per passenger in H1 2020 saw a 38.3% increase from the US$19.1 per passenger generated in H1 2019.

While in ordinary circumstances, a year-on-year increase in revenue per passenger by 38.1% would be an indicator of strong financial performance, a 38.1% increase in revenue per passenger in H1 2020 simply indicates that the decline in revenues (45.1%) was less than the decline in passenger traffic (60.3%).

The 38.1% figure therefore does not draw attention away from the fact that the airport industry is facing its biggest crisis in the history of air travel.

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