World Airport Report

IATA DG and CEO Giovanni Bisignani described 2009 as an “annus horribilis” in which airlines worldwide sustained a 14.4% drop in revenues and a $9.9 billion loss owing to the global financial crisis and economic downturn. Airports shared in the pain, although to a lesser degree, experiencing a 1.4% decrease in passenger throughput that reversed six consecutive years of growth (see Table 1). The last comparable decline occurred in 2001 when 1.7% fewer passengers used airports compared to 2000.

While the two downturns are similar in terms of the relative level of traffic loss, “2009 is very different from the downward spiral following Sept. 11 when the pattern was the same in all regions. World airport traffic in 2009, by contrast, was characterized by a two-tier evolution,” observes Mathieu Blondel, principal at Arthur D. Little in Paris, which conducted a comprehensive analysis of airport traffic and is presenting it in cooperation with ATW for a fourth year.

“Globally there was a decrease in traffic; however, there was not really a global crisis in 2009,” he says. “The advanced economies of Europe, North America and Japan were the hardest hit by the recession . . . whereas Asia, the Middle East and Latin America showed strong growth increases.” Airports in Western and Central Europe and North America saw around a 5% drop in passenger traffic in 2009. Eastern Europe, Russia and CIS experienced a more dramatic fall of 7.8% after several years of above-average annual growth—11.6% in 2008, 19% in 2007 and 11.2% in 2006. Passenger traffic in Latin America and the West Indies climbed 2% last year and in the Middle East a still attractive 6.9%, although this was just half the growth rate achieved in 2008. Asia recorded the highest growth, reaching 7%.

The regional disparity is even more compelling in absolute figures and reveals that, for example, airports in the US handled 75.9 million fewer passengers last year than in 2008 whereas airports in mainland China handled 79.4 million more travelers. Japan’s airports lost 15.3 million passengers but Brazil’s gained 15.9 million.

“2009 was a bipolar airport world from several standpoints,” says Vincent Bamberger, partner in charge of ADL’s Aviation Practice. “The traditional rule of thumb in times of crisis is that primary hubs are more resilient than regional airports. We have seen this in 2001, in 1997 and also in 1992-93 in all regions. The situation is different in 2009. The advanced economies of Western Europe, North America, Japan [and] Oceania followed this pattern and the traffic decline at large hubs was less severe than at regional airports (Table 4). Conversely, the strong performance in Asia and Latin America was primarily driven by regional traffic in China, India and Brazil.”

The aggregate 1.4% slide in airport passenger traffic in 2009 calculated by ADL is less severe than has been reported by other organizations, including Airports Council International, which put the decrease at 1.8% to 4.8 billion. This difference results from the inclusion by ADL of traffic data from a large number of regional airports, especially in China and India (see sidebar Sources and Data, Page 54).

The first six months of 2010 confirm the two-speed world that emerged in 2009 (Table 2), with airports in Europe and North America posting 1.6% and 1.3% increases respectively in passenger traffic over the year-ago period, according to data from ACI. This compares poorly to the solid and even double-digit traffic increases posted by airports in the Latin America/Caribbean (11.7%), Asia/Pacific (13%), Africa (9.8%) and Middle East (14.6%) regions.

The traffic evolution this year also validates the shift in world airport traffic growth toward Asia, says Blondel, pointing out that airports in Asia now handle 25.3% of worldwide passenger traffic(Table 1 Pie Charts), “almost as important” as the 27.7% market share held by Western and Central Europe and “very close” to the 30% market share of North America. In 2001, Asian airports represented a fifth of worldwide passenger throughput and their market share was 14.2 points below North America and 8.7 points below Western and Central Europe. Airports in the Middle East, in spite of their unrelenting rapid growth, still represent only a relatively small fraction (2.1%) of world airport passenger traffic.

“The shift toward Asia became very apparent in 2009 as a result of the financial crisis in 2008, but it really is the affirmation of an underlying trend over the past several years. It’s just that nobody paid attention to it because most regions posted attractive increases in traffic,” Blondel says. “2010 will be the start of a new era, with Asia almost on par [in market share] with Western Europe and North America. It now has its own dynamics of traffic and is no longer relying on the state of the industry in Europe or North America,” he believes. He warns that if airport groups in these regions want to maintain growth, “they will have to expand and invest in airports located in parts of the world where traffic growth is solid.”

He also argues that airports in North America should have initiated their privatization in the past decade when the oulook was brighter. “If airport privatizations materialize in the US, as some analysts indicate, one has to wonder which investors will buy them, seeing their dismal traffic growth outlook.” He reckons it will be difficult for airports in North America and Western Europe to keep their historic leadership.

The declining importance of Europe and North America in channeling airport passenger traffic is evidenced by their overwhelming presence among the worst-performing Intercontinental hubs(Table 7). Cincinnati/Northern Kentucky showed the highest relative decline and Chicago O’Hare the steepest fall in absolute figures as it handled 5.2 million fewer passengers than in 2008. ORD also headed the Top 10 in 2008 when it lost 6.8 million passengers compared to 2007. Primary hubs that lost their “milestones” of passenger traffic last year included Hartsfield- Jackson Atlanta International, which dropped below 90 million annual passengers; Paris Charles de Gaulle (below 60 million); Madrid Barajas (below 50 million); Houston Intercontinental (below 40 million); Seoul Incheon and Barcelona El Prat (below 30 million); and Copenhagen, Brisbane International, Manchester and Moscow Domodedovo (below 20 million).

Most of the fastest-growing hubs and largest contributors to traffic growth were in Asia, Latin America and the Middle East . “In contrast to previous years, Asian hubs are leading the world out of the economic downturn,” Blondel asserts. In 2009, five Asian airports featured in the Top 10 of best-performing Intercontinental hubs in relative growth, versus one in 2008 and three in 2007 (Table 6).

Asian hubs clearly dominated the industry in terms of absolute growth, with six airports appearing among the 10 best performers versus three in 2008. Beijing Capital International led the 2009 league table in all respects with throughput up 16.9%, equating to 9.7 million additional passengers, followed by Shanghai’s Pudong International and Guangzhou Baiyun International. PEK moved up four places from 2008 and now ranks as the world’s third-largest airport in passenger throughput with 65.4 million annual passengers, according to ACI, ahead of ORD and CDG and after ATL and London Heathrow. Noteworthy is the return of Delhi’s Indira Gandhi International to the list of 10 best-performing Intercontinental airports after spending 2008 among the worst performers.

Of the 30 largest Intercontinental hubs in 2009, only 11 posted growth—and only one was in Europe or North America: San Francisco (up 0.4%). Dubai International moved into 13th place as it handled 40.9 million passengers.

“Since 2001, Asia/Pacific, African and Middle Eastern Intercontinental platforms grew almost twice as fast in relative terms as the European and American primary hubs,” Bamberger observes. With the traffic index at 100 in 2001, American and Western European Intercontinental hubs realized a 17% growth through 2009, or just above 2% annually. Intercontinental hubs in the Asia/Pacific region, Africa and the Middle East, by contrast, had an average growth of more than 120%, or about 15% annually. “One can conclude that it was a ‘lost decade’ for the primary hubs in the ‘northern world,’” he asserts.

On a global basis, hub airports are losing ground to Regional counterparts. Primary and Secondary hubs accounted for 47.5% of world airport passenger throughput in 2009 compared to 55% in 2001, according to ADL (Table 5). Regional airports increased their share from 45% in 2001 to 52.5% in 2009. 

Traffic loss for the whole of Europe stood at 5.4% in 2009 (Table 8), comprising a 5.2% decline in passenger throughput at airports in Western/Central Europe and a 7.8% drop in Eastern Europe/Russia/CIS. This translates to 81.8 million fewer passengers than in 2008. All large and midsize countries suffered a drop in traffic (Table 9)with the notable exception of Turkey, whose airports handled 77.7 million passengers, up 10.1% over 2008 (Table 10).Also significant was the reversal of fortune experienced by Russian airports,which in aggregate were responsible for 25% of the passenger increase at European airports in 2008.

The fates of the UK and Spain seem to be intertwined, as both countries for the second consecutive year reported the highest passenger losses, 17.3 million and 16.4 million respectively. Until 2007 they were the engines of Western European traffic growth.

UK airports suffered a 7.2% decrease in passenger throughput, comprising an 8.2% year-on-year decline in domestic travel and a 7.1% drop in international, equating to 4 million and 13.4 million fewer passengers. International traffic plummeted in particular to/from Spain and to/from the US, shaving off 4.1 million and 1.8 million passengers respectively. London airports suffered the least from the UK recession(Table 11), “yet analysis on a per-airport basis shows that LHR and Gatwick performed better than the average and that the former rising stars of Luton, London City and Stansted are now falling stars with decreases of over 10%,” Blondel notes.

Passenger traffic at airports in Spain regressed 8.1% in 2009. Major vacation areas of Andalusia, the Canary Islands, the Mediterranean seashore and the Balearic Islands witnessed respective 10.2%, 11.9%, 9.6% and 6.2% decreases in passenger traffic due to lower tourism demand (Table 12).

Broken down by airport type, Intercontinental hubs were the most resilient and posted a slide of 4.4% compared to a 5.9% drop for Secondary hubs and a 5.6% decline for Regional airports. All the Intercontinental hubs, including the “Big Five,” reported traffic losses(Table 13). Frankfurt, LHR and Amsterdam Schiphol have had almost no growth since 2004.

“The decline at Intercontinental hubs [in 2009] was somewhat offset by the expansion of LCCs and the expansion of non-home carriers (Table 14),” Blondel explains. European airports benefited from the continued success of LCCs as this was the only segment realizing traffic increases in 2009. European Low Fares Airlines Assn. member carriers transported 162.5 million passengers last year, an 8.7% rise over 2008, whereas Europe’s network airlines reported a 5.8% decrease in boardings to 325.9 million, according to the Assn. of European Airlines, and European Regions Airlines Assn. members saw a 4.2% decline.

Although the US economy outperformed the EU last year (a 2.4% GDP decline versus 4.2% for Europe), US airports performed as poorly as their counterparts across the pond. In aggregate they handled 1.37 billion passengers, 5.3% fewer than in 2008. Canadian airports’ passenger throughput decreased 4.8% to 97.4 million. All categories of airports shared in the slump(Table 15) as airlines continued to cut capacity vigorously in response to the economic crisis and weak air travel demand. Throughput at Intercontinental hubs fell 4.4% following a 2.5% drop in 2008, but Regional platforms posted a steeper 6.3% plunge. US platforms dominated the list of worst-performing Intercontinental hubs—as they did in 2008—and not one made the list of best performers.

CVG and Detroit suffered the most last year in relative terms, posting 22% and 11% declines respectively as they were impacted by the Delta Air Lines/Northwest Airlines merger and subsequent network rationalization. The 6.1% decrease (following on an 8.9% drop in 2008) at ORD was attributable to capacity reductions by American Airlines and United Airlines.

An analysis of the evolution of US airline traffic over the 2000-09 period reveals that it is back to 2004 levels (Table 16).Airlines added just 33 million passengers during the decade: 18 million domestic and 15 million international. On a CAGR basis, international traffic growth outpaced domestic 3% to 1.1%. When comparing 2009 to 2008, US airlines lost 32 million domestic and 8 million international passengers.

While barely growing in passenger numbers, the balance of power in the US has shifted since the beginning of the decade, with airports on the East Coast adding the most passengers and Iron Belt airports posting the deepest losses (Table 17). “In airport traffic growth, California is not the land of milk and honey,” observes Blondel. “San Francisco posted a CAGR of just 1% in the 2001-09 period, San Diego and Seattle about 2% and Los Angeles has a negative growth. The saying ‘Go West Young Man’ does not apply to airport traffic. Surprisingly, airports on the West Coast do not seem to benefit from the Asian traffic boom.”

Asian airports recorded a 7% hike in passenger traffic in 2009 and thus resumed their historic trend of steep traffic increases. These averaged more than 7% annually between 2001 and 2007 before being interrupted in 2008, when growth slowed to just 1.1%. On average, Regional platforms in Asia outperformed Secondary and Intercontinental hub airports (Table 19).Nonetheless, as mentioned before, Asian hubs have a clear dominant position in terms of relative traffic growth, with five airports appearing among the 10 fastest-growing (Table 6). This compares to one in 2008 and three in 2007. Three of the five were in mainland China.

As a matter of fact, airports in mainland China continued to pull growth in the Asia/Pacific region, accounting for 97% of the traffic volume increase(Table 20).Indian growth turned positive, up 6.5% after a dismal 4.3% decrease in 2008(Table 21).Indonesia (Table 22), Vietnam and Malaysia also posted superior increases. Passenger traffic in South Korea was virtually flat again (up 0.4%) owing to the global financial crisis and despite dynamic regional tourism. Japan was among the most-affected destinations in Asia/Pacific and traffic slumped 7.9% (Table 23) following a modest 0.6% dip in 2008.

Airports in Oceania (defined as Australia, New Zealand and the Pacific Islands) saw their consistent growth stall in the face of the GFC as they posted a modest 0.9% passenger increase following growth of 7% in 2008, 6.2% in 2007 and 4.1% in 2006. Travel between Australia and New Zealand, however, was strong and balanced the drop in long-haul demand. Noteworthy is the inclusion of Auckland in the Top 10 best-performing Intercontinental hubs in terms of passenger volume (Table 6).

Airports in mainland China handled 485 million passengers last year, up 19.6%. Nine of the 10 fastest-growing Regional platforms in Asia are Chinese, including Xianyang, Shenzhen and Xiamen, which handled an additional 3.5 million (up 28.3%), 3.1 million (up 14.4%) and 1.9 million (up 20.7%) passengers respectively in 2009.

PEK is now the world’s third-largest airport. Hong Kong International is still the country’s second-busiest, but passengers there decreased 4.9% last year to 45.6 million and it fell out of the world’s 10 busiest airports. International visitors to mainland China were down 3% in 2009 owing to fears about the flu epidemic and the impact of the economic crisis, but domestic demand surged 23%, fueling strong growth among Regional airports (up 18%).

Indian airports reversed the negative flow of 2008 and increased passenger throughput by 6.5% to 117.2 million. Growth was driven in large part by DEL (up 9%), which reentered the 10 best-performing Intercontinental hub list.

Passenger traffic at Indonesian airports rose 8% to 84 million, supported by a rapidly developing economy and the country’s positioning as a low-cost manufacturing base for the region. Some 70% of the growth occurred at Jakarta’s Soekarno-Hatta International, which posted a 15.2% increase in passengers in 2009.

Japan’s airports did not have a good year, with passenger traffic down 7.9% to 177.9 million owing to a 5.2% fall in GDP, a double-digit drop in international arrivals, slowing domestic air travel and minus 3% outbound travel.

Airports in the Middle East continued to show impressive growth, up 6.9% in 2009. Dubai International increased its leadership in the region, and with 40.9 million passengers passing through its terminals last year it is closing in on Amsterdam Schiphol.

Airports in the UAE were responsible for 66% of the passenger growth in the Middle East in 2009, propelled by DXB and Abu Dhabi and home carriers Emirates and Etihad but also Sharjah and its based LCC Air Arabia, although its tremendous growth slowed. Meanwhile, Lebanon is recovering well from the 2006 war.

The African continent, which has just 17 airports that handle more than 2 million passengers annually, saw passenger traffic slide 1.5%. Cairo maintained its leadership in North Africa despite having just 0.1% growth to 14 million passengers, while Tripoli International posted the highest increase among the continent’s airports, 14%. Addis Ababa, Lagos Murtala Muhammed and Algiers realized very impressive growth rates in 2009.  The growth of TIP and ADD was driven by the hub policies of their national carriers.

“Tripoli is becoming a very attractive hub for low cost travel to and from Africa,” notes Mathieu Blondel. “A 14% growth in passenger traffic is quite impressive given the overall decrease of passenger traffic on a world level and by the African continent as a whole.

“However, the Afriqiyah crash will have a negative impact on Tripoli’s growth.” An Afriqiyah Airways A330 crashed on May 12 on approach to TIP. Also the fatal accident of an Ethiopian Airlines 737-800 in January shortly after takeoff from Beirut on route to Addis Ababa could slow the solid growth posted by ADD.

Traffic at the continent’s busiest airport, Johannesburg International, decreased some 5%.

Airports in Nigeria increased throughput by 12% and drove growth in Africa, followed by Morocco (up 3.8%), Libya (14%) and Algeria (7.8%).  Egypt and Tunisia stopped their growth path and reversed into declines as tourism arrivals fell owing to the global financial crisis and increased competition from Morocco and other Mediterranean countries in attracting tourists.

South African airports continued their traffic decrease of 2008 and suffered a 5.4% passenger traffic loss to 32.9 million. However, the FIFA World Cup is expected to have provided a major traffic boost to the country in 2010.

Passenger throughput at airports in Latin America and the West Indies grew 2% in 2009. Brazilian airports continued to pull growth in the region (up 13.7%) as the country benefited from a booming domestic market. Both Rio de Janeiro and Sao Paulo-Guarulhos International are among the world’s 10 fastest-growing Intercontinental hubs with increases of 9.5% and 6.4% respectively.

Last year the gap between Brazil and Mexico widened considerably as airports in Mexico particularly suffered from the deteriorating economy and the H1N1 epidemic. 

Chile and Venezuela passengers rose 1.9% to 14.3 million and 1.2% to 12 million respectively, whereas passenger throughput at airports in Argentina climbed a healthy 6.9% to 21.6 million despite the slow growth of the economy (0.9%). GDP contracted 1.5% in Chile and 3.3% in Venezuela.