- Infrastructure
Navigating the aviation industry’s growth: overcoming airport capacity challenges
Philipp Joeinig
Group CEO
The aviation industry is witnessing a remarkable resurgence, with global traffic rising by 30.1% in September 2023 compared to the previous year, reaching 97.3% of pre-COVID levels, according to a recent IATA report.
While encouraging to see that the industry has recovered so strongly since the pandemic, are we prepared for the predicted increase in passenger volumes in the years to come? According to a report from Oliver Wyman, passenger volumes are expected to exceed more than 19 billion annually at airports globally by 2040. To put this in context, passenger volumes at their peak pre-Covid reached 4.5 billion in 2019, according to the International Civil Aviation Organisation.
Whilst we welcome this growth, it comes with its own set of challenges. The swelling volumes of passengers puts a significant strain on existing airport infrastructure, creating operational challenges and risking the operational flow between airports, airlines, and ground services. Europe, in particular, grapples with an outdated infrastructure and an overabundance of ground services providers, intensifying the pressure on service quality.
Addressing this exponential demand calls for a unified approach among industry stakeholders. Regulatory bodies need to re-evaluate directives such as the EU Directive 96/97/EC, initially aimed at fostering competition but now contributing to an overcrowded market. The directive has inadvertently led to a fiercely competitive landscape among ground service providers, causing operational friction and a race to the bottom – with significant economic impacts. Air traffic delays cost the European economy roughly €17.6 billion in 2018, with airport congestion contributing approximately 10% to this staggering figure, according to a 2022 report from Álvaro Rodríguez-Sanz and Luis Rubio Andrada.
In 2022, decisions made by major hubs, such as London’s Heathrow and Amsterdam’s Schiphol Airport, demonstrated the critical importance of maintaining a balance between demand and capacity. In 2022, the UK’s largest and busiest airport reported it had seen 40 years of passenger growth in just four months. In response, implementing passenger caps have shown promising results in aligning demand with capacity, signaling that exceeding capacity inevitably leads to compromised service levels, extensive delays, and aggravated passenger experiences.
Twelve months on, Heathrow’s surge in passenger numbers highlights the necessity of taking capacity constraints seriously, and how taking action can lead to optimised operational decisions. Despite pandemic setbacks, Heathrow has reclaimed its position as one of the world’s busiest airports, reporting a 19% increase in October compared to 2022 with seven million passengers travelling through the airport—merely 1% below pre-pandemic levels.
In an increasingly complex and overcrowded ground services environment, deregulating the sector and ensuring consistency in processes and standards will ensure safe and efficient aviation services. Responding to a multitude of operational procedures only adds substantial complexity and creates further challenges for airlines looking to fly to new markets as standardisation across locations cannot be achieved. Driving greater standarisation, particularly amid the projected growth in passenger volumes, facilitating collaboration between airports, airlines, and aviation service providers, and balancing growth with infrastructure enhancements will ensure we are all prepared to meet future demand.
Philipp Joeinig
Group CEO