In the face of the widening COVID-19 crisis, Austria´s Innsbruck Airport will shut down commercial operations for three months as a cost-saving measure. The airport is an important economic driver for the Tyrol region in the Austrian Alps. It is one of Europe’s top three airports for winter charter operations, as thousands of ski tourists fly in every weekend from Europe, Israel and Russia, mostly on leisure carriers. ATW spoke with managing director Marco Pernetta about the decision to close temporarily.
Austria’s air traffic has nearly come to a standstill because of the coronavirus crisis. What does that mean for a successful regional airport like Innsbruck?
For a short time, there were even considerations about whether Austria´s regional airports would have to close on the order of the authority. But a very good solution has been found, which offers great flexibility for individual decisions: shorten operating times, reduce the mandatory number of firefighters or a complete closure of the airport. Soon, there will be no scheduled or charter flights landing anymore in Innsbruck. That means there will be no regular flights from March 20, besides a few business jets that are based in Innsbruck. These operators still run worldwide return campaigns, such as Tyrol Jet Services. So the question became: to remain open, to which extent, or to close?
And you decided to close the airport temporarily.
In the face of the emerging dimension of the crisis, I contacted the works council and we quickly agreed that we want to introduce part-time work quickly. At the same time, we knew that closing airport operations would offer the greatest possible benefit for the company and the workforce. We therefore decided to continue operating until March 23. A week later, from April 1, we will convert almost the entire workforce into part-time work. Until then we can carry out all necessary work in all areas to complete the winter season, which for our airport is the most important part of the year.
How much savings you can achieve?
We initially planned for a three-month closure, always with the option to restart the airport again in the shortest possible time, for example for emergency flights, evacuations, etc. We need about three hours to get the airport back into operation. The airport closure itself will save us about €1 million ($1.1 million) per month. These are primarily personnel costs, but also operating costs, such as electricity, security, as well other variable costs. We have about 165 regular employees, of whom around two-thirds are employed in the operational departments, the shops and the lounge. Only three to four managers, including myself, will continue to work full time at the airport, so the most important corporate tasks can be carried out. In return, around 98% of the workforce goes into part-time work. By the way, the heliport nearby the airport continues to operate normally without restrictions.
How long can the airport survive such a situation?
We are lucky in Innsbruck in terms of timing, as we have so far actually had an extremely good winter season. We had a 5% passenger increase by the end of February. Unfortunately, the passenger volume slipped into the negative zone within just three weeks and we will not be able catch up by the end of the year. This of course will have an impact on our revenue. If we, with every cost-cutting measure, could still reach a red-black zero this year, this would be a little miracle for me.
And that depends on what?
For us, like for many other airports, it will primarily depend on what happens to outgoing passenger traffic in the summer, of which 60% to 70% has already been sold. If this business also disappears, then it is difficult to achieve it. But that’s not decided by us. It also depends on what happens in the destination regions around the Mediterranean. Also, will some of the airline partners still be around after the crisis? It gets really exciting on one hand, and on the other hand probably terrifying what is happening in the industry. Innsbruck Airport reported a passenger record of around 1.1 million in 2019, the seventh year of permanent growth. But that is history and does not help us a little further in the crisis.
What is the possible outlook from your side?
I don’t assume that demand will come back for the coming winter as aggressively as the last winter season. This will result in a weaker season. There is a lot of uncertainty in the market and as a result, airlines and tour operators tend to have less capacity.
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