COVID-19 to financially impact Fiji Airports

March 10, 2020 12:55 pm

Fiji Airports will defer future infrastructure projects as a result of financial set-backs caused by COVID-19 [Source: karryon]

Fiji Airports will defer future infrastructure projects as a result of financial set-backs caused by COVID-19.

In response to a global slow-down in travel and reduced flights, Chief Executive Faiz Khan says almost all costs at airports are fixed, and they now face major financial disaster.

Khan says every dollar lost in revenue hits their bottom line and cash flow because fixed costs and existing commitments cannot be reduced.

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He adds while planned projects will be shelved, those already under contractual engagements have to go ahead.

The chief executive says this makes the situation of the airports highly challenging, along with the entire aviation and tourism industry.

Meanwhile, Airports Council International Asia-Pacific has warned the prolonged duration of the COVID-19 outbreak will significantly reduce the region’s airports from forecast growth.

The Airport Association is urging regulators and governments to implement well-defined adjustments and relief measures.

According to ACI World estimates, Asia-Pacific is suffering the highest impact, with passenger traffic volumes down -24% for the first quarter of 2020, compared to forecast traffic levels without COVID-19.

The ACI World Airport Traffic Forecasts 2019-2040 predicts around $26 billion revenue for the first quarter in the Asia-Pacific region in the “business as usual” scenario. The impact of COVID-19 is projected to have a revenue loss of over $6 billion.

It says unlike airlines, who can choose to cancel flights or relocate their aircraft to other markets to reduce operating costs, airport operators manage immovable assets that cannot be closed down.

The ACI says airports are faced with immediate cash flow pressures with limited ability to reduce fixed costs and few resources to fund capacity expansion efforts for longer-term future growth.