The Director General of the International Air Transport Association (IATA), Willie Walsh has sounded a warning to both governmental and private infrastructure shareholders across the globe against implementing planned increments in charges over time in a bid to regain profits that were lost during the lockdown period which affected the entire industry.
The IATA boss made this warning after reviewing figures in Europe which reveal that some European Air Navigation Service Providers (ANSPs) of the twenty-nine Eurocontrol states are planning to recover almost $9.3 billion (€8 billion) from airlines to cover proceeds not realized in 2020/2021, in addition to a 40% increase planned for 2022 alone. Confirmed airport and ANSP charges increases have already reached $2.3 billion.
“A $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 the D.G.
According to Walsh, the current situation is extreme, considering the fact that airlines had to do everything to stay buoyant from the time the pandemic hit, including but not limited to increased commercial borrowing and shareholder contributions, drastically reducing operating costs and seeking governmental aid – which in some cases were in the form of loans that needed to be paid back.
“Today I am ringing the alarm. 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 behavior 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,” said Walsh.
He continued by commending regulators in Spain and India who have already identified the danger of this milking strategy by infrastructure providers and followed through with prompt measures to curtail proposed increases in charges by airports.
Instead of taking such advantage of their market power and milking their customers dry, Walsh suggests that infrastructure shareholders should explore other ways of addressing the financial situation such as accessing capital markets, seeking government aid and implementing cost control measures which will be sustainable in the long run.
To some aviation professionals, this is the surest route to full recovery of the industry without consumers and the economy paying the ultimate price.
