Airports shrug off impact of Great Recession

Emerging markets are among the growth engines that have allowed the sector to withstand turbulence since the Financial Crisis, Fitch said.

Global airport traffic outpaced economic growth following the financial crisis in 2008, underlying the asset's stability and interest from investors, according to a report published by Fitch Ratings.

From 2007 to 2016, air travel increased at a faster rate than in the previous 40 years, Fitch said, making it the best decade ever for airports based on passenger numbers. According to the report, the growth came despite fallout from the Great Recession, which is unusual because passenger traffic is usually correlated to the strength of the economy.

Airports are considered by many to be sound infrastructure investments, providing protection from competition, a variety of growable revenue streams and the means to manage costs effectively.

“Air traffic might have been expected to suffer in a recessionary period, as passenger traffic is a function of business climate and willingness to spend, both not exactly at their highest over the period,” Fitch stated.

Airports in developing markets grew the most in the last decade due to a “catch up” effect for non-OECD countries with maturing markets. From 1997 to 2015, non-OECD countries made up 42 percent of global passenger growth, but that shifted to 68 percent from 2007 to 2015.

The counter to this trend, Fitch said, is that developing countries are also more at risk of volatility. Brazil, for example, suffered economic contraction over the last few years, which negatively affected its airport industry.

Another surprise in Fitch's report is that large international gateways fared better than origin and destination airports, running contrary to the traditional view that O&D airports show the greatest resistance to traffic shocks.