Europe’s smaller airports are facing a significant threat, as per the head of the Airports Council of Europe. Olivier Jankovec, the director general of ACI Europe, expressed concerns that some of the smaller airports in Europe could be at risk of closure due to potential jet fuel shortages resulting from the crisis in the Middle East.
The closure of the Strait of Hormuz during the Iran War has led to a doubling in jet fuel prices, causing many airlines to cancel flights. This situation has particularly impacted regional airports, which are more vulnerable to airlines reducing capacity and increasing fares, as demand on their routes is typically more price-sensitive compared to larger airports. The aftermath of the coronavirus pandemic has already left some regional airports operating at levels 30% lower than in 2019, according to Jankovec.
Jankovec emphasized the current high jet fuel prices and the looming cost of living crisis as factors that could pose a severe challenge for many regional airports in Europe. He described the situation as an existential threat for these airports. On the other hand, major airports like Heathrow in the UK are facing a different issue.
Heathrow, the busiest airport in the UK, raised concerns about its capacity amidst the Middle East conflict causing a surge in demand for connecting flights. The airport’s chief financial officer, Sally Ding, stated that Heathrow is operating at full capacity and highlighted the increased number of passengers passing through the airport in the first quarter of the year.
The conflict in Iran has led to airspace closures, resulting in a rise in transfer passengers at Heathrow. This trend is expected to continue amid ongoing geopolitical uncertainties, affecting the airport’s international competitors like Dubai. The airport’s trading update noted a temporary absorption of demand and anticipated impacts on passenger numbers for the rest of the year due to uncertainty in the Middle East.
While the debate over the construction of a third runway at Heathrow continues, Ding warned that the current capacity constraints could lead to limited choices for passengers, higher fares, and missed economic opportunities for the UK. Heathrow’s proposed £50 billion expansion plan aims to increase capacity through the construction of a new runway, which would significantly boost passenger capacity and flight numbers.
Heathrow stressed that its expansion plan is privately financed, thoroughly evaluated, and focused on delivering value. The airport is prepared to invest and expand with appropriate regulatory support and government policies in place. The project includes redesigning a section of the M25 to accommodate the new runway, with the government considering various expansion proposals before selecting Heathrow’s plan.