SPAIN. Airports company Aena has committed to renegotiating commercial contracts with business partners as part of its response to the COVID-19 crisis. It outlined its plan as it released first-half financial results on Tuesday.
The airport company said it had already negotiated payment deferrals with airlines and other business partners for six months, and agreed rent reductions of up to 75% for activities by commercial partners, airlines and handling agents. The total amount deferred comes to €83.6 million, with €18.6 million related to commercial operators and €65 million for airlines.
The board has instructed management to study the impact of the crisis and to agree amendments to contracts with partners, including those with fixed rents and minimum annual guaranteed rents.
Aena said: “In order to maintain the value of these contracts for Aena, the negotiations could envisage various adaptations of the contractual terms to the post-COVID-19 reality, in relation to the MAG (including a possible reduction of these, linked to the duration of the State of Alarm), the duration of the contracts, providing tenants maintain their contracts.”
Each concession will be handled individually, and negotiations will take into account, according to Aena, “various levers for risk mitigation: MAG-based rents, duration of the contract, obligation to open, investment commitment, marketing fee, variable rent and product range.”
In the first half, commercial and real estate revenue decreased by -20.5% or €124.4 million. Income from key commercial partners was recognised in the accounts but will form part of the negotiation with tenants that lies ahead.
Due to the guaranteed income related to MAG-based rent, income from duty free climbed by €9.3 million and F&B by €2.3 million in the half, even though these operations were closed for much of the period.
Aena said: “In application of IFRS 16 (leases), the revenue relating to the MAG for the period of the State of Alarm, which ran from 15 March to 20 June, amounting to €198.6 million, has been recognised in the accounts, given that Aena has a contractual right to receive these rents. These rents will form part of the contractual negotiations that are planned to be held with each of the commercial operators.”
Passenger traffic across the group fell by -65% year-on-year to 50.2 million, with a -66% decline in the Spanish network. Revenue fell by -47% to €1,112.4 million and net profit plunged from €559 million in H1 2019 to a loss of €170.7 million in H1 2020.
