How Do Airports Make Money In 2020?

The drop in global passenger demand and travel restrictions continue to rock the aviation industry. Like airlines, airports… The post How Do Airports Make Money In 2020? appeared first on Simple Flying.

How Do Airports Make Money In 2020?

The drop in global passenger demand and travel restrictions continue to rock the aviation industry. Like airlines, airports have been seeing revenue fall over the last few weeks. With footfall likely to be low for much of the year, income is going to be minimal.

London Heathrow is one of several airports facing tough challenges this year. Photo: Getty Images

The standard approach

Usually, airports rely on passengers for a regular flow of revenue. They generally take a cut of every sale made by a retailer, which is why duty-free is often pushed. It costs around $1.5 billion to run Heathrow Airport each year, and with around 80 million passengers passing through, the London hub relies on each person to help it cover its fees.

On average, Heathrow’s sales cut is split by the following:

  • Restaurants – $5.15.
  • Retail shops – $5.15.
  • Parking lots – $2.03.
  • Car rentals and VIP lounges – $3.04.
  • Express train to London – $2.15.

The airport also makes an average of $9,500 for each aircraft that lands. The charge depends on the size of the plane. For example, an operator of a Bombardier Dash 8 will pay just $999, while a company landing a Boeing 747 will fork out $11,600.

São Paulo airport
With airports practically empty, there are far fewer revenue sources. Photo: Getty Images

Unusual times

However, with around 75 percent of global flights grounded compared to this time last year, airports will be losing out on considerable chunks of revenue due to the lack of passengers and aircraft coming in. To help control costs, Heathrow is adjusting its runway usage from its usual two, down to a single strip.

Last month, Airports Council International (ACI) reported that airports in the United States are expected to lose $14 billion due to operational inactivity. ACI North America’s President and CEO Kevin M. Burke spoke of the damage that the downturn is causing. He feels that the struggles will continue long into the year.

“Our loss estimates are getting worse by the day as airports grapple with this abrupt, unexpected decline in passenger and cargo travel,” Burke said, as reported by the ACI.

“We fully expect these numbers to deteriorate even more as the financial pressure mounts on airports across the US. That is why we have asked for federal help so that airports get through this unprecedented virtual shutdown in American aviation.”

United Airlines Aircraft at Newark Liberty International
Airports and airlines are in the same boat when it comes to financial impact. Photo: Getty Images

Support needed

As a result of these losses, these airports are set to receive a total of $10 billion from the US government. This funding is from the CARES program and will assist them in covering operational costs, such as salaries.

With a source of money confirmed, for the time being, these airports are in a better position to focus on ensuring essential operations run smoothly. Several carriers are operating reparation flights, services carrying medical personnel, and cargo shipments. While this activity still goes on, airports can maintain some degree of income.

Shipping on the rise

These cargo operations have become the focus of many airlines in recent weeks. Therefore, airports will also be shifting their approach as these services will help give them part of the all-important funds that they need at the moment. The Guardian reports that Heathrow cargo flights are rising by 500% during the passenger downturn.

Cargo operations could help save the day for airports. Photo: Getty Images

Just like airlines, several retailers have also been forced to be temporarily out of action recently. Therefore, members of the public are turning to online orders to receive their goods. Subsequently, there is a renewed demand for shipping solutions, and airports are set up to help fulfill it.

Ultimately, even though passenger activity at airports is at an extreme low, airports are essential facilities to keep economies moving. Therefore, governments will be keen to help them receive funds while times are uncertain. Income from cargo operations and critical commercial flights, along with state aid, will help ensure that they survive the 2020 lull.

What are your thoughts on the dire situation that airports face this year? Have you seen any noticeable changes at airports on your travels recently? Let us know what you think of the situation in the comment section.

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Air France Parks Its Planes With Short-Term Storage Procedures

Earlier this week, Air France shared that it has parked 80% of its fleet in short-term storage. The… The post Air France Parks Its Planes With Short-Term Storage Procedures appeared first on Simple Flying.

Air France Parks Its Planes With Short-Term Storage Procedures

Earlier this week, Air France shared that it has parked 80% of its fleet in short-term storage. The airline said on Thursday that it was taking an active approach to maintain aircraft for a return to the skies in no more than three months. However, is Air France’s approach too narrow-sighted?

Air France will ground 80% of its fleet for up to three months. Photo: Getty Images

Air France aircraft placed into storage

Over the past few weeks, Air France has been steadily grounding its fleet, including its gargantuan A380s. Since the extent of the coronavirus pandemic is not yet known, many airlines are being forced to ground aircraft for unknown amounts of time. However, Air France has taken more of an optimistic approach. It’s put its aircraft in short-term storage in the hopes that the pandemic will abate over the next one to three months.

Air France A380
Air France will need maintenance workers to protect its aircraft constantly. Photo: Air France

The air carrier has parked its planes at three locations across France. Some are stationed in the airline’s maintenance base in Toulouse Blagnac, but the rest are split between two Parisian airports: Paris Charles De Gaulle and Paris Orly.

Despite these aircraft being in storage, there is a lot that needs to be done to maintain them. Air France has 1,000 employees working to keep the aircraft in tip-top shape. So, how does it all work?

What is Air France’s short-term storage procedure?

Air France is carrying out “active” storage. This process will see aircraft remain grounded for between one and three months. 150 hours of work will be needed to keep the planes ready for operation post-coronavirus.

The first stage of the process is to get the aircraft ready for their storage placement. Aircraft will need to be protected correctly with tarps. Windows will be blocked off, as will vents to prevent animals from nesting inside. The fan blades will also need protection and landing gear and hydraulics cleaned. This process is the most time-consuming, but the work done at this stage is crucial.

Afterward, Air France’s aircraft will routinely be checked. It will move the planes to alleviate pressure on the tires. The engine will be switched on, and general inspections will be carried out to ensure everything is still in working order.

The final step in the process is to get aircraft ready for routine service. This will require two days of work that involves removing the protective equipment and giving the aircraft a once over.

Air France grounded planes
Although most of its fleet is grounded, the planes need constant attention. Photo: Getty Images

Safety comes first

In a press statement, the Executive Vice President of Engineering and Maintenance at Air France said that safety was the top priority throughout. Géry Mortreux said:

“In these special circumstances, our priority is the safety of our flights, our customers and our staff. At the present time, we monitor our entire fleet on a daily basis, with each of our aircraft receiving special care and attention. Nothing is left to chance.

“Our primary mission is to ensure our fleet of aircraft are maintained in the best possible condition so that we can put our aircraft back in the air in complete safety as soon as this becomes possible”.

Like most airlines, Air France wants to get its aircraft back up in the air as soon as possible. But is it’s approach too optimistic?

Will Air France’s aircraft need to stay in storage for longer?

No one knows how long the airline industry will suffer as a result of the coronavirus. However, the consensus is that even when the majority of restrictions have been lifted, it will be a while before things get back to normal. Assuming that aircraft will be in operation again in a month is, at this point, quite unthinkable. What about three months?

Air France aircraft on runway
Will Air France’s aircraft be back in the sky as soon as it hopes? Photo: Getty Images

Interestingly, other airlines have not been vocal about how long they intend to keep their aircraft in storage. Some, like Delta, have parked them in long-term storage facilities. However, a decision like that does not necessarily indicate that they will stay for a long time. The benefits of a long-term storage facility like Pinal Airpark in Arizona ensure that aircraft are kept in the best possible condition for however long it takes for them to be operational again.

Even though Air France might be optimistic about when its aircraft return to operation, it also has the flexibility to keep the aircraft in storage for a long time. The second phase of the active storage process could be extended so that regular checks continue without the aircraft being prepared for operation.

What do you think? Will Air France need to extend its storage? Let us know your thoughts in the comments. 

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