COVID-19 has had a dramatic impact on the Australian Airport Industry. Globally, flight restrictions and cancellations have decreased aircraft movements at airports, drastically reducing revenue for both airports and airlines. Today, many airports are battling to manage operational and maintenance costs with reduced budgets to maintain airport infrastructure.
In January 2020, many airports continued on an upward trajectory of growth, leading to a real buoyancy about the future. However, COVID-19 staggered the industry with a 90-95% loss in revenue after ceasing operations due to cancelled flights and closed borders. Many airports enacted crisis management teams, which were there to manage the financial and operational aspects of the business trying to find efficiency and restrict losses. There was much uncertainty around March to May on how long the period of peril would last. Most airports expected a rebound in aircraft movements within six months. However, Melbourne’s second wave, which hit in June, further prolonged the recovery driving airports into further uncertainty as to when the situation would return to normal.
With so many airports looking for ways to bounce back, we’ll explore the top challenges faced by Australian airports today and how Antoun’s recommendations can ensure travel safety for passengers in a cost-effective way to remain within the airport’s reduced budgets.
In a report, the Australian Airports Association (AAA) estimated that “in March 2020, Australia’s major airports would lose more than $500 million in aeronautical revenue alone, compared to 2019.” The report notes that the actual cost will depend on how long travel restrictions remain intact and the time it takes to recover. AAA calls on their airport partners to work together so they stay open to recovery.
Preserving Cash Reserves
After a massive decrease in airport traffic due to the pandemic, most airport shareholders have explored what the future holds. This has led to airport management teams reviewing and restructuring their budgets, resulting in layoffs, renegotiations in service contracts, and postponing planned investments. All in the hope to minimise the impact on their finances.
Airports around Australia are now struggling with budget constraints, so the current focus is around preserving cash reserves by better assessing how maintenance of infrastructure is undertaken and more stringent criteria for selecting the right repair.
According to Luc Ramalinga, Head of Airports and Maritime at Antoun, who has worked in aviation for the last 15 years and has managed one of the busiest airfields in the country, the last 9 months for the airport industry has been about preservation and survival to ensure service continues until everything goes back to normal.
He says, “In general, across the industry we have noted a reduction in the amount of spend both on capital expenditure and pavement maintenance. A main focus for airports now is preserving their cash reserves, aligning service levels with the number of passengers that are still allowed to fly at airports whilst maintaining a safe and compliant facility.”
Critical Runway Maintenance
Maintaining surface integrity through regular inspections and pavement maintenance plays a big part in airport runway safety. But with tighter airport budgets, most airports are scaling back and pushing back on repairs and replacement activities that are considered non critical to safe operations. With the lack of international flights available and closed borders, airports are rethinking construction budgets that were previously worth billions of dollars nationally.
Given the current COVID pandemic crisis, one can understand airports current approaches to managing their facilities is pavement maintenance. However, it is recommended to be completed periodically to prevent ongoing pavement failures and pavement distress from requiring larger repairs and therefore more money to keep the area serviceable. Even with tighter budgets, airports can look at alternative solutions to manage their pavements that will keep them serviceable and minimise the downtime of these critical assets.
Keeping Up Safety with Budget Restraints
Many airports are facing challenges to best manage their infrastructure maintenance due to the loss of revenue. Replacement projects have been downgraded or postponed to allow the airport revenue to recover before proceeding. These risk based decisions are critical for the ongoing operation of the airport. With these decisions comes the potential of increased risk of failure to critical assets.
Luc Ramalinga notes that managers responsible for critical airfield infrastructure are having to find new ways of maintaining their assets with less budget.
Luc points out that the average design life for a typical concrete pavement is 40 years. However, some airports have aircraft concrete pavement that is already a decade over the time for renewal. These continue to be maintained in a reactive maintenance schedule to mitigate safety and compliance risks.
A common approach to managing critical infrastructure that has significant operational impact during downtime is to prolong the asset’s life. This is done through smaller maintenance activities that have a diminishing return on investment as time goes on. This is due to the inherent degradation of the foundation pavement. Safety risks for aging pavement are a real factor, if not maintained correctly. This may lead to failures that cause foregin object debris (FOD) that has the potential to be ingested by an aircraft engine during aircraft operations.
The challenge for airports today is striking the right balance in managing their infrastructure to match the current financial constraints versus investing in the replacement of critical long term assets. Not one strategy is correct and is very much dependent on the airport’s size and strategic goals. What is clear is an ongoing prolongation of deferral of maintenance projects has a compounding impact on cost and operational disruption for those repairs in the future.
Changing the Strategy for Airport Infrastructure Rethinking Rethinking The Methodology Of Maintenance: Condition-Based Replacement
Luc Ramalinga says, the most critical issue and important objective for any airport is to keep runways safe and serviceable. With this challenge however, comes a great opportunity for airports to change their approach to asset maintenance and how to introduce efficiency in their capital investment formulation.
Given the strain COVID-19 has put on revenue, we need to rethink the methodology of how airport assets are maintained. Traditionally, airlines fund around 95% – 100% of the maintenance and repairs of their aeronautical assets. Capital investment decisions have sought to complete bulk replacements of critical assets like aircraft taxiways that have been rated as being in poor condition even though there would be a percentage of slabs that would be still in a serviceable condition.
With airports now focusing on saving every dollar, a condition-based replacement can be a suitable alternative. This means focusing only on the area that requires replacing or repairing. For example, if an area of slabs in a section needs 70% replacement, repairs can be focused on that 70%, without replacing the rest of the 30%.
Working smart and intelligently, Antoun’s rapid set concrete can be used in one night, replace one slab, and then go right back out again. Antoun can provide flexibility and partner with airports in any coming year, depending on how much traffic comes back to the airport and work with whatever maintenance and repair budget is available.
Antoun: Leading the Change in Airport Maintenance Strategy
Amidst reduced budget challenges many airports face today because of COVID-19, air travel remains crucial to global trade. Airports must find ways to ensure the safety and maintenance of their runways so passengers continue to travel safely.
Pivoting their strategy and working with the right infrastructure partner like Antoun, who can offer a host of flexible repair and maintenance solutions that meets their needs, can help them move safely forward.
As experts in mission-critical infrastructure project delivery, Antoun employs the E6 methodology using a strategic combination of technical expertise, innovation, and experience that’s been proven to deliver top-notch results throughout even the largest mission-critical projects. With Antoun, you get the results you’re expecting on budget and on time – with no surprises.
Antoun is agile and can offer clients better flexibility for capital work, focusing on critical areas that need repair while ensuring uninterrupted operations. Antoun works closely with clients to identify the real need and then find the right solution that matches their revenue profile, adapts to the airport’s growth, and partners with them closely as they come back stronger, better, and ready to serve their customers.