News from Fraport Group’s airports reveals the latest industry wounds from the coronavirus pandemic. The group’s entire international portfolio is under extreme stress over dismal air traffic flows.
The headline at Aviation 24 reads “Passenger traffic markedly declines in Frankfurt (-62%) and at Fraport’s airports worldwide in March.” The news is magnified by the fact Frankfurt traffic plummeted almost 97 percent for April 6 – 12. From Bulgaria to Peru, passenger numbers have crashed on account of travel restrictions in light of the COVID-19 epidemic.
Meanwhile, market analysts say Fraport AG (ETR:FRA) is now burning through credit at a ruinous rate. And without cash flow soon, the German transport company could go bust putting 23,000 employees at risk. Such a failure would domino to investors like the State of Hesse, and Π Group (NBG), and others.
To make matters worse, many airports hit by the coronavirus are on the brink of failure because they depend on spending from passengers to operate. Fees from airlines, foot traffic at their retail outlets, and services such as providing parking to fliers are revenue flows which simply no longer flow. So, how can companies like Fraport recoup if no planes land?
In the US alone, commercial airports support more than 11.5 million jobs, according to estimates from the Airports Council International (ACI). And in the UK Karen Dee, chief executive of the UK-based Airport Operators Association (AOA) has warned:
“We are clear that airports will shut down in weeks unless urgent action is taken to support the industry.”
TR Business reports passenger volumes at London Heathrow Airport (LHR) down by 52% compared to the same month last year, as the government’s lockdown and travel restrictions hit home. Latin American air carriers and airports are critical too, but the distress is being felt everywhere.
Finally, transportation workers around the world wait for government aid packages to rescue airports and other infrastructure for almost certain failure. Unfortunately, most of these aid packages have already been deemed insufficient for airports to survive. NPR reports on the potential catastrophe looming. The signs tell us that recovery is not right around the corner.
