Airports may not fully recover until late 2024 according to Fitch

Global airport traffic levels may not fully recover to pre-pandemic levels until 4Q24, says Fitch Ratings in a new report. Fitch expects the traffic level recovery speeds to vary regionally due to differences in traffic profiles - including whether flights are for business or leisure - as well as due to differing government support schemes and travel restrictions.

"We can expect to see air travel change significantly over the next few years as lockdowns keep traffic levels down," says Jeffrey Lack, Director, Fitch Ratings. "Domestic and leisure travel will probably recover much earlier than international and business travel."

Fitch's expectations for full traffic recovery ranges from 2Q21 to 4Q24, although the timing and shape of the recovery are uncertain. Airport performance is vulnerable to significant worsening of the pandemic - even though future lockdowns may be less stringent, given their high economic impact. Airport performance is linked to airlines' strength, and many of these are going bankrupt or facing liquidity issues.

Fitch has developed various scenarios to assess the potential impact of the pandemic on rated airports. Fitch considered issuers' ability and intention to reduce operating costs and tap into balance-sheet flexibility, with capex growth plans deferred and dividends reduced.