Aerospace infrastructure investment-an outlook

As airports across the world brace for a drastic reduction in passenger throughput, capital expenditure has come under increased pressure. While some European airports have taken advantage of the quieter skies to carry out major works, in the UK the opposite has been true. Nevertheless, any activity is likely to be short term leaving the construction and engineering sector in need of an outlet to survive.

Its been close to four months since the airline fleets of Europe have been mothballed and as time passes, the outlook is starting to emerge from the fog of uncertainty. As airlines began timidly resuming operations in July, airports across the continent were adapting to a new normal - reduced passenger throughput, health screenings, passenger tracing and non-standard cargo operations. In some countries, travel restrictions remain in place with self-isolation protocols varying by jurisdiction. The threat of a second wave does nothing to help matters. But, it is clear that everything is pointing towards a stuttering restart to passenger operations.

In the UK, this has translated into short term capital investment in airport infrastructure being wiped out. The medium term does not look promising either. With furlough schemes coming to an end, airports including Gatwick, Heathrow and Edinburgh have made many of their staff redundant. Projects have been mothballed and management have taken a "batten-down-the-hatches" approach. With each of the three airports requiring major runway works over the coming years irrespective of traffic throughput, this decision may prove to be short-sighted. Amongst the engineering consultants supporting airports, the outlook is similarly grim. Specialist teams have been temporarily disbanded with some not forecasting a return to working on their bread and butter until part-way through 2021.

In contrast, airports across Europe have continued with their planned capital spend. Dublin remains committed to completing the north runway and further work on the surrounding apron appears to be progressing. Rennes, in France, completed a major runway resurfacing project as has Stuttgart, while Brussels recently shut one of its main runways to commence a major overhaul. The economic adage of spending your way out of a downturn appears have more traction outside the UK, at least where aviation is concerned. Nonetheless, all are short term construction schemes and a broader look at the future of airport infrastructure needs to be considered.

Although government coffers have dwindled over the course of the pandemic, certain sectors require a minimum level of investment. Defence is one such sector. Come what may, nations require protection and there is no shortage of new military aircraft being delivered and in need of refreshed facilities. As the F-35 arrives in Australia, Belgium, Denmark, Poland, the UK and across the US, major infrastructure investment is required for the aircraft's future sustainment. The new B-21 Raider, as a global strategic asset, will also likely see a similar requirement though on a much smaller scale. And although small, the nascent commercial space launch sector will be in need of suitable infrastructure to support launch operations.

As is always the case when things don't quite go to plan, survival is a case of a willingness to adapt. The question is, will there be anyone left with the right skills in the right place to adapt to the new norm?