Airport Management Market Research Report - Global Forecast till 2030

Impact of COVID-19 on the Global Airport Management Market

Current Impact

The COVID-19 pandemic has forced several countries worldwide to declare either complete or partial lockdowns. The operations of many companies have been affected by the lockdown, particularly those categorized as non-essential, including the aviation industry. The spread of COVID-19 and the response by the aviation industry has resulted in an unparalleled decline in global air traffic. The average number of flights per day in March 2020 was 145,000, which is 17.61% lower than that of 176,000 in March 2019. Moreover, after several governments around the world announced restrictions on air travel, commercial air traffic registered 41% below the 2019 levels in the last two weeks of March.

COVID-19 Impact on the Airport Management Industry

As per the International Civil Aviation Organization (ICAO), the COVID-19 impact on the global scheduled passenger traffic for 2020, compared to what was originally planned, is expected to result in a 32% to 59% overall reduction in seats offered by airlines, which is a reduction of 1,815 to 3,213 million passengers. The outbreak is expected to result in an approximately USD 236 to 419 billion potential loss in the gross operating revenues of airlines. The impact of COVID-19 on the airport management market depends on the duration and magnitude of the outbreak, containment measures, economic conditions, and the degree of consumer confidence for air travel.

The figure below shows a comparison of passenger numbers and capacity from January 2019 to April 2020.

comparison of passenger numbers and capacity (January 2019 to April 2020)

Moreover, in 2020, the low GDP of major economies, such as the US, China, the UK, France, Germany, India, Italy, Japan, Brazil, and Canada, anticipates a potential decrease in investments in the defense & aviation industry.

COVID-19 Impact on the Airport Management Market in Key Countries

US: The US economy shrunk by 4.8 % in the first quarter of 2020. This is the country's first contraction since 2014 and the biggest drop in over the past ten years. Consumer spending declined significantly in the first quarter, contributing -5.3% points to the first quarter’s contraction. Falling consumer spending has a significant effect on the overall GDP growth of the US as it accounts for nearly 68% of the GDP.

China: The economy in China contracted by a seasonally adjusted 9.8% on quarter in the three months to March 2020, following a 1.2% growth in the previous quarter and compared with market estimates of a 9.9% decrease, which was the first quarterly contraction on record, as the COVID-19 outbreak paralyzed production and activities.

France: France is the seventh-largest economy worldwide and the second-largest in Europe. Household consumption (55%) is the biggest sector of the economy, followed by government expenditure (24%) and gross fixed capital formation (22%). The exports of goods and services account for 29% of GDP while imports account for 31%, subtracting 2% of the total GDP.

Germany: Germany is the fifth-largest economy in the world and the largest in Europe. Germany is the second-largest exporter in the world, and exports account for more than one-third of the national output. Exports of high added value products have been the key driver of the growth of the country in recent years. The goods and services exports account for 46% of the GDP while imports account for 39%, adding 7% to the total GDP.

India: India has emerged as the fastest-growing economy in the world. It is expected to be in the top three economic powers of the world over in the coming years, owing to its strong democracy and partnerships. India’s nominal GDP growth rate was estimated at 12% in 2019-20. However, due to the COVID-19 impact, experts have estimated that growth for the fiscal year 2021 is expected to witness the lowest figures India has seen in three decades.

The Road Ahead:

The growth of the global airport management market is expected to witness a slow growth rate in the next few years owing to the expected decrease in air passenger traffic in the next few years owing to the government restrictions air travels, consumer confidence for air travels, and social distancing measures followed at airports and onboard aircraft. Moreover, due to this decrease in air passenger traffic, airlines and airport managing companies are expected to request bailout packages from the government.

Airport managing companies in Europe are expected to incur a loss of USD 15.4 billion due to pandemic. Additionally, it is estimated that airports in Europe will have 700 million fewer passengers in the next few years, which is 28% less than expected. Furthermore, the reduction of air passengers at regional or smaller airports will lead to longer waits and higher concentrations of waiting passengers. This is due to space arrangements that will have to be made to separate and protect passengers from each other. In addition, it is expected that airport management authorities and airlines may charge additional fares for social distancing measures, which might still not guarantee profitability.

Role of Market Research Future:

As a market research and consulting company, Market Research Future has been continuously monitoring and tracking the COVID-19 pandemic and its impact on various markets within the aerospace & defense industry. All our research studies have been updated to accommodate the impact of COVID-19 in the respective market to provide our customers with comprehensive market data along with present and future trends with macro and micro-level impact factors.

Source: ICAO ADS‐B and OAG Plus ICAO Estimates