Major French airports
Executive summary
2022 Annual Public Report
2
Airports strongly impacted by the crisis
After decades of sustained growth, the health crisis and the traffic restriction measures
introduced in mid-March 2020 brought a sudden halt to air traffic and airport activity. Passenger
traffic thus fell by 70% between 2019 and 2020. If domestic flights saw periods of recovery as
restrictions were eased, European travel and, to a greater extent, international travel remained
permanently in decline, hampered by both regulations of the countries of origin and of
destination. The prospects for recovery of traffic to 2019 levels still remain uncertain. The latest
forecasts published by Eurocontrol in October 2021 estimated that the recovery of traffic to its
pre-crisis levels would occur between 2024 and 2027.
Scenarios for traffic recovery in Europe
Source: Eurocontrol
–
traffic forecasts published in October 2021 (EUROCONTROL 2021-2027 forecast).
The three scenarios vary according to assumptions relating to the development of the pandemic,
vaccination and the ability of Governments to agree on the rules for lifting restrictions.
Late awareness and efficient adaptation
Crisis management took on an inter-ministerial dimension on 17 March 2020 with the
activation of the Pandemic Plan and the start of the first lockdown. France was one of the last
countries in Europe to take specific measures regarding flights from China, leaving French
airports open to international traffic to continue to provide connections with countries where
the virus was actively circulating.
From the first lockdown, airports rolled out their business continuity plans and adapted
their organisation to the collapse in traffic, whilst ensuring compliance with their public service
and territorial continuity obligations. Most of them also financially supported service providers
and customers until the summer of 2021, making it possible to avoid bankruptcies. The crisis
has given airports an opportunity to gain in efficiency and flexibility.
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Exceptional savings plans to cope with the collapse in turnover
The sustained growth in air traffic had accustomed airports to high levels of profitability.
The decline in passenger traffic simultaneously affected revenue from the public airport service
(airport fees and tax) and revenue from shops and car parks. Thus, the combined turnover of
the ten airports whose situation was examined by the Court fell by 54% in 2020, and their
operating results showed heavy losses despite unprecedented savings plans and government
support to reduce wage costs linked to partial activity.
In spring 2020, airports took measures that reduced their operating costs by 27%
(excluding amortization). They also reviewed their investment programmes, cancelling or
postponing many projects beyond 2022. These safeguarding measures and the funds raised
through borrowing to prevent liquidity risks enabled them to cope with the immediate effects of
the crisis.
Challenges to be met in emerging from the crisis
In the short term, the crisis raises questions specific to the airport sector. Implementation
of the clause in concession specifications relating to unforeseeable events or force majeure is
being discussed. The financing of sovereign safety and security missions delegated to
operators is also the subject of debate, because the corresponding costs are no longer covered
by airport tax. Extension of the system of advances set up by the Government to cover the
deficits for 2020 and 2021 seems difficult insofar as it transfers the cost of this service to future
passengers. It therefore may threaten the competitiveness of French airports and hamper
recovery.
In the medium term, the crisis also highlights the weaknesses of the economic regulation
model of the aviation sector, masked up until now by continuous growth in traffic. Against the
new backdrop of reduced financial margins, the principles governing the price control on airport
services have proven to be unsuitable.
Recommendations
The Court will share its observations and recommendations on the economic regulation
and on the airport network on completion of the work currently in progress. For the time being
and in view of the belated start of crisis management in the aviation sector, the Court is inviting
us to learn the lessons of the pandemic episode and to adapt crisis management systems.
To this end, it makes two recommendations:
1.
better define warning indicators and graded measures to be implemented in airports
open to international markets in the event of a health risk
(DGAC, 2022)
;
2.
in European airspace, propose strengthening the coordination of systems in the event
of a health crisis
(DGAC, SGAE, 2022)
.