ACI World: Airports’ Post-Pandemic Prospects Improving, But Challenges Remain

Airports Council International (ACI) World says “positive developments are emerging” for airports looking to rebound from the lean traffic years of the COVID-19 pandemic, but the organization warns of headwinds—such as tepid GDP growth—and notes the lost growth of recent years. 

Before the pandemic, ACI had forecast passenger volume at the world's airports to be 10.2 billion in 2022 and 10.5 billion in 2023. Instead, passenger volume in 2022 was 6.8 billion and is forecast to be 8.4 billion in 2023. “This represents a potential loss of 20.4%” compared to the pre-pandemic forecast, ACI notes.

In its latest industry outlook, ACI points to “improved business and consumer sentiment, declining food and energy prices and the full reopening of China, which have positively affected worldwide airport traffic.” But this “room for optimism” could be tempered by a global GDP forecast of growth below 3% in both 2023 and 2024. 

Slow GDP growth “implies a continued challenging environment for the aviation sector, with airports facing ongoing difficulties in recovering passenger numbers and revenue,” ACI warns.

The industry organization notes inflation remains a concern for airports, alongside other ongoing challenges. The sector “has been impacted by cost pressures and tight labor markets, leading to potential challenges in maintaining profitability and managing expenses for airports,” ACI states. “Inflation is expected to gradually moderate over 2023 and 2024, but is likely to remain above central bank targets until the latter half of 2024 in most countries."

Inflationary pressure "can further strain the financial viability of airports as they face increased operational costs,” the group adds.

One tailwind is a “decline in global energy and food prices, which boosts purchasing power and aids in lowering headline inflation,” ACI says, as is “the reopening of China’s economy."

"These developments are expected to lead to a further recovery of air travel demand and passenger volumes compared to pre-pandemic volumes. As consumer confidence improves, people are more likely to engage in travel, benefiting airlines and airports,” ACI says.

The group notes the reopening Chinese economy “exceeded expectations in Q1, with GDP growth accelerating to 4.5% from 2.9% in Q4 2022.”

ACI says there was a “strong traffic trend” at airports globally in Q1 2023. “The easing of inflation and rising consumer confidence in most [Organisation for Economic Co-operation and Development] countries, combined with declining jet fuel prices, suggests sustained strong air travel demand that will continue to improve into the northern hemisphere summer season,” the organization concludes.