Airport expansion plans looking less likely due to Covid and…

airport-expansion-plans-looking-less-likely-due-to-covid-and…

Airport expansion plans looking less likely due to Covid and…

Airport expansion plans looking less likely due to Covid and climate awareness
2021-06-21 11:52:00
UK airports continue to do badly, due to the pandemic and travel restrictions, and it is anticipated that they could lose £2.6bn between April and September, if Covid continues to limit travel. The industry is also, unwillingly, having to consider their role in worsening climate breakdown, and whether it is acceptable for the sector to be expanding. “Many investors and fund managers could question in future whether airports sit well within their portfolios”.  Only Gatwick, which is 50.01% per cent owned by Vinci, has made use of the Bank of England’s Covid corporate financing facility, for temporary grants and loans.  Most airport owners have pared down their operations, staffing and costs, and cut dividends, to save money.  Lenders are appreciating that the airports have huge financial problems, that they cannot solve while Covid continues to limit air travel.  But the FT says there will be limits to the goodwill by lenders, as it is no longer certain that airports will remain a safe investment, generating predictable and high income streams – or be acceptable ethically. Now ACI warned of a “severe airport investment crunch” in Europe as it had to take on more than €20 billion of additional debt last year. That makes expansion plans look doubtful. .Tweet   Airport expansion plans grounded by Covid and climate change ‘Severe investment crunch’ and growing environmental concerns put projects at risk By Gill Plimmer and Philip Georgiadis (Financial Times) 20.6.2021 The image of the chief executives of British Airways, Virgin Atlantic and Heathrow standing on an empty runway last week to call for a reopening of international travel sent a clear message: airports are desperate to get back to work. The pandemic continues to be dismal for airports — in the UK they stand to lose £2.6bn between April and September as prospects rise of a second summer without mass international travel, the Airport Operators Association has warned. Airports are faced with the twin challenge of recovering from the pandemic and coping with climate change — putting the need for expansion into question at a time when the future of travel is uncertain. So far, most of the UK’s privatised airports have managed not to lean too heavily on government; only Gatwick, which is 50.01 per cent owned by France’s Vinci, has made use of the Bank of England’s Covid corporate financing facility, which provides temporary grants and loans. Instead, airport owners have reduced operating and capital spending to preserve cash, which together with equity injections and the suspension of dividend payments have so far supported companies’ cash flow. “Lenders are treating borrowers very differently than post the global financial crisis,” said John Bruen of Macquarie Asset Management, which invests in the sector through AGS Airports, a 50:50 joint venture with Ferrovial that owns Aberd

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