Airlines fear rising costs amid AENA expansion

Aena’s ambitious airport expansions have sparked fears of prohibitive costs for airlines.

While the aviation sector supports the growth of major airports managed by Aena they have also voiced their concerns on keeping airport charges competitively low to sustain industry expansion.

Aena, with a 51 per cent public stake, outlined a robust investment plan during its Capital Markets Day, led by Maurici Lucena.

This plan, which spans from 2022 to 2026, aims to accommodate the surge in passenger traffic post-market recovery.

It includes significant developments like the €2.4 billion enhancement of Adolfo Suarez Madrid-Barajas Airport, announced by President Pedro Sanchez at Fitur.

Investments are set to escalate in the 2027-2031 period, doubling past expenditures and potentially driving up the airport fees Aena levies for terminal and runway use among other services.

Airline concerns

The airlines, represented by the Airline Association (ALA), commend the expansion efforts that match demand growth and operational efficiency.

However, they are wary of fee increases funded entirely by them. ‘Rates remain as competitive as possible,’ the ALA demands, fearing the annual investment cap of €450 million could surge under the forthcoming five-year plan.

Despite their opposition, a 4.09 per cent rate hike was approved, effective from March 1, after the National Commission of Markets and Competition’s green light, raising costs by roughly 40 cents per passenger across Spain.

A competitive edge

Javier Gandara, representing airlines as ALA’s president and easyJet‘s general director for southern Europe, emphasised the importance of competitive rates, especially for budget carriers where fees are a major cost after fuel.

‘Rates are the second ‘input’ after fuel,’ he stated, noting that despite a nominal rate increase, fees are still 7 per cent lower than in 2014. He calls for Aena to collaborate in maintaining competitive pricing, amidst concerns over future investment-driven fee spikes.

Balance between growth and costs

On the other side, Lucena highlighted the airline industry’s collective responsibility to ensure Spanish airports continue to operate effectively. He defended the fare increases amidst debates, citing the disproportionate rise in airline profits compared to Aena’s earnings.

‘In proportion, the companies’ profits increased much more than those of the entity he presides over,’ Lucena argued, underscoring the record results achieved in 2023 as no basis for policy change.

Aena and the airlines find themselves at a crossroads between necessary expansion and the imperative to keep air travel affordable.

As the sector eyes future growth, the challenge remains in balancing ambitious infrastructure projects with the need to remain attractive to both airlines and passengers alike.