The Airports Council International Asia-Pacific & Middle East (ACI APAC & MID) has released its latest Airport Industry Outlook, shedding light on the trajectory of passenger traffic and financial recovery for airports within the two regions.
While there’s a positive trend in sight, macro-economic factors still pose challenges for the continued recovery of the airport sector.
2023: A Snapshot of Recovery
In the latter half of 2023, the seat capacity hovered just 3% below 2019 levels, indicating a notable recovery. However, while domestic seat capacity exhibited a promising 3% growth, international capacity lagged at -14%.
Asia-Pacific showcased a commendable rebound, reaching nearly 90% of pre-pandemic traffic levels, buoyed by China’s full border reopening.
Notably, the Middle East recorded a growth of nearly +4% compared to 2019 figures, setting an optimistic tone for the future.
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Financial Performance
Despite challenges, airports in the APAC and ME regions continued to operate profitably. While EBITDA margins saw an uptick to 30% in Q3 2023, net profit margins experienced a marginal dip to 17%.
Revenue Landscape
Though revenue witnessed a 42% improvement from Q3 2022 to Q3 2023, it remains -3% below 2019 levels. Aeronautical revenue, comprising 53% of total revenue, saw a decline, reflecting shifts in revenue streams.
Operational Challenges
Operating expenses marked an uptick, rising by 12% from Q2 2023, primarily attributed to labor and energy costs.
Despite this increase, operating expenses remained 2% lower than Q3 2022, indicating ongoing efforts towards efficiency.
Looking at 2024
With expectations of a full recovery in the Asia-Pacific region and the Middle East eyeing a record year surpassing 450 million passengers, cautious optimism prevails for the future, albeit amidst geopolitical tensions and economic uncertainties.
Geopolitical Considerations
The geopolitical landscape, marked by tensions in Eastern Europe and the Middle East, adds a layer of complexity as we move into 2024.
The Red Sea crisis, disrupting international shipping routes, may lead to a progressive shift towards air cargo, potentially benefiting airports in Asia, the Middle East, and Europe.
Cargo Dynamics
Cargo load factors (CLF) generally remained stable, albeit slightly below pre-pandemic levels. Noteworthy is Asia-Pacific’s CLFs surpassing the global average, indicating resilience in the region’s cargo operations.
Mr. Stefano Baronci, Director General of ACI APAC & Middle East, draws attention to Asia’s pivotal role in global growth, expressing optimism despite macroeconomic challenges.
“As reported by the International Monetary Fund, overall, Asia is on track to deliver two-thirds of global growth in 2024 and remains the key engine of economic growth in the World,” Barconi noted.
“This is reflected in the consistent positive trends in traffic and finances with airports in our region, which in 2024 is expected to reach a market share of almost 40% of the total passenger and cargo traffic at global level.”
Projections suggest continued growth in both regions, with Asia-Pacific expecting a 3% rise and the Middle East poised for a robust 14% increase over 2019 levels.
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