French airport group ADP beats estimates as traffic nears pre-pandemic levels
Reuters
Published Oct 25, 2023 17:00
Updated Oct 25, 2023 18:55
By Victor Goury-Laffont
(Reuters) -French airport group ADP reported forecast-beating 9-months revenue on Wednesday as traffic returned close to pre-pandemic levels but a senior executive said he did not expect a full recovery in Chinese traffic in 2024.
J.P. Morgan analysts say the French company is best-positioned to benefit from the return of Chinese travellers in 2024 with final travel restrictions lifted.
During the third quarter, Chinese traffic at Paris airports was at 37.3% of 2019 levels.
Philippe Pascal, ADP deputy executive officer for finance, strategy and administration, said on a call he did not expect full recovery in traffic from China in 2024 due to "massive disruptions" in the Chinese tourism industry and inflation.
ADP generated 4.12 billion euros ($4.36 billion) in the nine months to September, against an average analyst estimate of 4.07 billion euros in a company-compiled consensus.
Traffic at group level returned to 97.9% of 2019 levels, before COVID-19-related travel restrictions, over the last nine months, and 91.4% of pre-pandemic levels for the group's Paris-region airports.
ADP expects group traffic to reach 95 to 105% of 2019 levels for the full-year.
The ACI Europe body, which represents the region's airports, says it expects full passenger traffic recovery in 2024.
ADP, which operates Paris' two main airports, has faced a series of headwinds this year including strike-induced flight cancellations and a government plan for a transport sector tax in 2024.
Though it expects to pass on most of the new tax burden to airlines, the group said it would have a negative impact of around 90 million euros on its 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA).
"We have to mechanically increase our tariffs 6%", Pascal said, adding this could not be done at once. He declined to specify how much of an increase would be applied in 2024.
ADP remains "cautious" on retail spending per passenger levels in 2024, deputy chief financial officer Christelle Jacquemet said, pointing to a "volatile macroeconomic context" and works at the Paris Charles de Gaulle airport.
($1 = 0.9444 euros)
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Written By: Reuters
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