Message from Angela Gittens Director General, ACI World Countries look to their airport system to create value, delivering GDP growth and jobs. Some States opt for single-airport operators to manage these functions while others have designated one or more airport operators to manage a network or networks of airports composed of large, medium-sized and small, regional, airports.
ACI’s data reveals that about one in three States have selected a network approach in developing and operating airports, with 48% of all airports in the world, representing 30% of global traffic, being part of a national or sub-national airport network. The Latin America-Caribbean (LAC) region is a perfect illustration of the relevance and importance of airport networks. An estimated 270 airports in LAC are part of national or sub-national networks, the majority of which are in Brazil, Mexico, Argentina and Colombia. Approximately 82% of all LAC airports, generating 54% of the Region’s total passenger volume, are in networks.

So why do States opt for the network approach? While the airport industry as whole is profitable, smaller airports, that is, those that serve fewer than one million passengers per year, have a negative return on invested capital of 1.7%. And, 80% of airports serve fewer than one million passengers. In networks as a whole, some 73% of airports are small and have a corresponding share of network traffic of only 8%. The survival of many of these airports depends on the distribution of revenue from larger airports in their network and not directly from their own operations. The larger airports and the airlines that serve them in turn benefit from the feeder traffic that the small airports provide. In many cases States choose to preserve the network approach as a social and economic policy decision—whether they remain public or are operated by private companies—for reasons of safety, socio-economic considerations, efficiency and/or as a matter of integrated transport policy. Typically operating airports as a network is the only way to keep small airports viable to serve their communities. As such, it is important that economic oversight of airport networks be proportionate, light-touch and flexible. A “one size fits all” approach to economic oversight is discordant with the market dynamics and competitive pressures that shape the airport industry. Since States are more and more reluctant or unable to fund our sector, it is left to airport operators to safeguard the financial health of the network. Cross-subsidization, i.e. the practice whereby regional airports are subsidized by large airports, is a valid option to ensure the financial sustainability of airport networks, as correctly acknowledged by guidance provided by the  International Civil Aviation Organization (ICAO).
ICAO will hold its Airport Economics Panel from 23–25 May 2017, in Montreal, Canada. On the agenda is the design and review of ICAO policies that affect the economics of airports, notably with respect to airport networks, cross-subsidization and airport charges.
The ACI delegation will advocate networks as a safe, efficient and cost-effective option to manage airports, including cross-subsidization if local conditions deem it necessary. The ACI delegation will also advocate for ICAO policies and guidance that are proportionate, light-touched and flexible. While the changes to the aviation market have been wide ranging and airports will continue to respond to these changes, in an increasingly competitive environment, airport owners worldwide are opting for networks as a safe, efficient and cost-effective option. Airports play a crucial role in the economic and social health of communities, countries, regions and the world at large, and they must craft a strategy for their sustainable development to continue those benefits. Appropriate policies at ICAO are also necessary to continue those benefts.