Global Airports Facing Dramatic Financial Pressures

Global airports, which haven’t seen such bleak economic conditions in decades, face dramatic operational and financial pressures in 2009 and 2010, according to Standard and Poor’s Credit Research.

Among the key points in S&P’s report on the challenges facing airports:

• Global passenger traffic is forecast to fall 5.7 percent, cargo 13 percent and revenues 12 percent in 2009, according to the International Air Transport Association.
• The World Health Organization’s pandemic alert for Influenza A (H1N1), more commonly known as swine flu, has further curtailed air travel.
• High fixed costs and the inability to pass those costs on to tenants and passengers amid the recession.
• Dysfunctional credit markets that have limited airports’ ability to restructure debt.

The North American market has seen a 9 percent drop in domestic operations in April and a 6 percent drop in international operations, compared with a year ago, while the European Union has seen an 8 percent drop in the same period.

On a brighter note, Asian airports, which have also experienced a low double-digit decline in passenger traffic throughout much of 2008 and early 2009, started to see some signs of stability in April, S&P said.