Running airport operations successfully is our core business and vital to Airports Company South Africa’s value creation process. We strive to maintain service excellence and high-performance levels, while creating value for society and the economy by boosting trade opportunities and tourism as well as catalysing local economic activity.
Airports are part of an interconnected ecosystem that includes airlines, air traffic management, ground handling and other transport services, as well as related retail and hospitality services. We generate revenue from three sources:
- Core aeronautical revenue from airport operations, including regulated tariffs for aircraft landing, parking charges and passenger service charges
- Non-aeronautical revenue from commercial income streams, such as advertising, retail, car parking, car rental and property
- Non-core revenue from the provision of technical advisory and consultancy services both in South Africa and abroad, as well as revenue from our training academy. See Grow Airports on page 92 for further details.
We operate in a highly regulated industry and a high-risk environment. Compliance, as well as safety and security, are our top priorities, combined with the business imperative of improving passenger experience. Our success is dependent on our ability to manage our airport operations efficiently and innovatively, and particularly our ability to work with various stakeholders.
At all times we meet compliance requirements, with the mindfulness that insufficient planning and/or ineffective implementation may have significant consequences for all our stakeholders. We actively cultivate a culture of going beyond compliance. We engage with regulators in this regard as we believe we have a responsibility to contribute to our industry over the long term. Through our first-hand experience of industry challenges, we make meaningful contributions to ensure regulations and procedures are relevant and in the interest of all stakeholders, shaping a safe and secure airport environment and industry. Please see more on compliance in the Governance and Remuneration Report.
Growth in passenger traffic is driven by increased demand on existing routes, opening new routes and capitalising on new opportunities. During FY2019/20, three new direct routes across Africa were introduced, contributing to increased connectivity and revenue diversification. In addition, global carriers, including Qatar Airways, Singapore Airlines and Alitalia, expanded their services on existing routes.
The country’s national carrier, South African Airways (SAA), was placed into business rescue in December 2019. This resulted in a further decrease in the number of routes the airline operated through our airports, following the initial route cuts that were implemented earlier in the year as part of the airline’s turnaround strategy. SAA’s business rescue will impact our operations to some extent, although to a degree, other airlines have stepped in to operate several routes, both domestically and internationally. For more information on route development at our airports, see Grow Footprint performance, page 92.
Forty-two million arriving and departing passengers were processed through our airports in FY2019/20.
The year under review ended with President Ramaphosa’s declaration of COVID-19 as a national disaster on 15 March 2020, declaring travel bans and later imposing a lockdown to contain the spread of the coronavirus, followed by a further two weeks and a staged relaxation of lockdown regulations. Our airports remained closed until 1 June 2020 when we were able to partially reopen under Level 3 of the lockdown.
|Annual departing passenger throughput capacity||Total annual departing passengers||Aircraft landings|
|O.R. Tambo International Airport||14 000 000||10 470 706||10 686 913||10 662 446||105 975||109 758||110 286|
|Cape Town International Airport||7 000 000||5 384 136||5 437 295||5 404 706||45 092||49 338||51 497|
|King Shaka International Airport||3 750 000||3 057 175||3 007 573||2 819 458||25 383||25 571||27 058|
|Port Elizabeth International Airport||1 000 000||849 342||848 298||821 735||24 140||22 655||26 992|
|Upington International Airport||50 000||26 073||30 637||33 113||3 079||3 579||3 671|
|East London Airport||600 000||463 242||425 402||411 373||13 287||12 427||13 521|
|George Airport||450 000||417 656||422 978||398 511||18 381||21 509||17 051|
|Kimberley Airport||100 000||76 564||80 782||86 415||4 445||4 892||4 445|
|Total||27 250 000||20 924 465||21 118 264||20 836 852||248 519||259 169||264 457|
GDP growth is a key driver of traffic volume in the aviation industry. Despite South Africa’s subdued GDP growth in the year under review, we were on track to weather the economic contraction, as total passenger growth on a year-to-date basis by February for the financial year stood at 3,3% comprising 4,7% growth in domestic travel and muted cross-border traffic growth of 0,3%. Travel bans in March 2020 and the closing of our airports during lockdown led to a considerable and unprecedented contraction in departing passengers. This led to a 1% decline in departing passenger to 20 924 465 compared to the previous year.
Our decrease in total aircraft arrivals of 4.1% for the year represented a decrease of 1.3% in international arrivals, a decrease of 3.7% in domestic arrivals and a decrease of 7.9% in regional arrivals. Our decrease in total annual departing passengers can be attributed to a decrease in international and regional departures of 3.4% and 5.5% respectively while domestic departing passengers increased by 0.3%.
|Arrival aircrafts||38 524||130 693||11 620||67 682||248 519|
|Variance compared to FY2018/19||-1.3%||-3.7%||-7.9%||-5.8%||-4.1%|
|Total annual departing passengers||5 822 544||14 526 386||517 960||57 575||20 924 465|
|Variance compared to FY2018/19||-3.4%||0.3%||-5.5%||-5.1%||-0.9%|
Our Run Airports performance review focuses on security, safety, airport operations and non-aeronautical operations, demonstrating our value creation efforts, and concluding with an outlook for FY2020/21.
As traffic volumes grow and passenger expectations change, ensuring the efficacy of our security measures is paramount. We manage a growing range of security variables, as informed by our increasing knowledge of the nature of threats and the risks they pose. We are committed to continually enhancing security awareness and response, developing a culture of security, improving technological resources, fostering innovation, improving oversight and quality assurance, as well as increasing cooperation and support from all stakeholders.
Key initiatives in FY2019/20
The K9 Vapour Wake Programme trains working dogs in the detection of explosives and other illicit substances. The first such programme in Africa was developed in collaboration with South African Police Service (SAPS) K9 Unit, the national key point security officers, the SACAA and the USA Department of Homeland Security’s Transportation Security Administration (TSA).
Officers from our academy participated in behaviour detection training through a TSA-led initiative, hosted in the United States. Following this training, we customised our behavioural detection officer programme, in association with the SACAA, SAPS and TSA.
Our landside or public area integrity check was expanded to include background-checks of all employees and stakeholders who have access to our airports.
We participated in the National Joint Operational and Intelligence Structure, as we do at times when issues arise which affect the security of our airports at national level, such as the COVID-19 pandemic.
In heightening the security of our airports, we implemented an access control system, which makes use of electronic gates in our cargo division. Consequently, South African air cargo security systems have been approved by both the European Union as well as the TSA.
A vehicle management intrusion detection system was implemented in response to engagement with stakeholders at O.R. Tambo International Airport. This comprises 40 analytic cameras, complemented by improved lighting and parking facilities, which allows for surveillance of our entire controlled parking area.
We established a joint coordination centre for lawenforcement agencies at O.R. Tambo International Airport.
During the year, Airports Company South Africa received an award for an outstanding partnership with the APEX programmes at the ACI’s APEX awards. The APEX Safety programme and APEX Security programme promote the highest levels of safety and security, at airports of all sizes, in line with International Civil Aviation Organisation (ICAO) standards and ACI’s best practices.
We remain alert to our exposure to cyber security threats. For more information on how we are managing cyber security threats, see IT and Digitisation on page 98.
Looking ahead, we will continue to build strategic partnerships with key stakeholders, digitise our security systems and invest in security service initiatives in the medium term to secure and protect our airports’ infrastructure, our assets, our passengers and our people.
In FY2020/21, we intend to pursue cost-effective technological solutions. We will be issuing a request for proposals and tenders for our enterprise access control system in due course. The online system will centralise and efficiently manage enterprise access to our network of airports allowing enterprise stakeholders to access different airports using a single card, based on the specifics of their permits.
On a national level, we will focus on developing our centralised control room, located at our new head office, which will connect all our South African airports. Through the control room we will be able to coordinate all security efforts between airports and manage security incidents if they arise.
On the 11 March 2020, the World Health Organisation (WHO) declared COVID-19 a pandemic. We had already intensified measures at all our airports to detect, manage and prevent the spread of the coronavirus, following confirmation of the first suspected case of COVID-19 in the country in the week before. The Department of Health and its entity Port Health implemented a variety of detection and management procedures to identify potentially infected passengers. Officials continued to use thermal screening on all passengers entering South Africa, with those passengers identified as potentially infected at the airport then channelled to the National Institute of Communicable Diseases (NICD) for further testing. All passengers were also asked to complete a questionnaire before landing to assist with detection and tracing of potential infections from highrisk areas.
We worked closely with the Department of Health and the SACAA in coordinating our response to COVID-19. To help mitigate the spread of the virus at all our airports, we implemented precautionary measures aligned to the standards and protocols provided by the WHO, the ICAO and the SACAA. Screening and testing measures were strengthened at our international airports, which are ports of entry and national key points.
We implemented strict disinfection and hygiene control procedures at our airports, particularly at arrival gates, buses and all passenger facilitation areas. The number of hand sanitising stations was increased, and the cleaning schedules of high contact surfaces were updated for more frequent sterilisation with ammonia and chlorine-based cleaning compounds in line with NICD recommendations. All our front-line staff were supplied with protective respiratory masks and gloves to minimise the risk of infection. We also launched a digital and social media communications campaign, including terminal building announcements, to create awareness of prevention measures.
On 15 March 2020, the COVID-19 outbreak was declared a national disaster in South Africa. Airports Company South Africa together with other relevant aviation authorities, implemented air travel restrictions as detailed by the Minister of Transport. Airlines from countries deemed high-risk were redirected to a remote parking apron and the relevant authorities were notified. Foreign nationals from high-risk countries were not allowed to disembark the aircraft and inbound crew as well as South African citizens returning from high-risk countries were screened and quarantined.
As a company we have been instrumental in leading the preparedness and fight against COVID-19 since the declaration of the pandemic. We continue to work with all our stakeholders in the interpretation of applicable regulations, the specifications of requisite personal protective equipment (PPE), the implementation of safety procedures, the provision of general information about preventative methods as well as providing support to our employees and stakeholders.
Occupational health and safety
We strive towards zero health and safety incidents in our workplace. Senior management holds overall responsibility for safety excellence. Our leadership-led, behaviour-based safety programme is cascaded down the Company through awareness programmes, ongoing employee engagement and safety compliance training. Regular safety audits are conducted and appropriate resources are provided to ensure a safe workplace environment.
We continued our implementation of measures to reduce the number of severe incidents at our airports. Accordingly, we have employed stringent contractor management processes to ensure occupational health and safety compliance resulting in 284 contractors completing the review and approval process in FY2019/20. We have also continued our phased approach to the refurbishment of clinics with occupational health equipment at our airports, with clinics at international airports fully operational. The refurbishment process is expected to be completed by June 2020.
During the year under review, we embarked on the process of attaining ISO 45001 certification, which is an occupational, health and safety standard aimed at improving employee safety, reducing workplace risks and creating better, safer working conditions. Our first step was to complete an ISO 45001 gap-analysis and implement plans to close gaps identified. This was achieved by year end, with all identified gaps addressed.
Furthermore, this year we aligned our safety reporting, of incidents and injuries, to international best practice (Bird Triangle), which enables proactive implementation of safety measures. To further strengthen our safety reporting framework, we implemented a risk- and exposure-based medical surveillance programme, in the year under review. This is expected to drive a step change in assuring job fitness and preventing detrimental effects of the work environment on our health.
Total occupational fatalities: 0
Total non-occupational fatalities: 31
Total severe injuries: 87
Our airport operations are central to differentiating our service offering. Passenger satisfaction drives revenue and traffic growth, as well as protecting and enhancing our reputation. Globally, passengers’ expectations are shifting. High-quality, seamless travel experiences, driven by technology-enabled self-service opportunities, among others, are what passengers expect. However, we need to ensure affordability, which we do through ongoing collaboration with airlines. In FY2019/20, we introduced a monitoring system aimed at enhancing awareness of operational challenges that may hinder achieving our KPIs. Any factors that could lead to deviation from our targets are discussed at monthly airports management meetings, with a view to implementing corrective action expediently.
Our ability to effectively manage airport operations and ensure high levels of service quality largely depends on the predictability of passenger flows which is closely linked to on-time performance. On-time performance is determined by the percentage of aircraft departures within 15 minutes of their slot time, in accordance with the International Airlines Transport Association’s (IATA) universal standard. We achieved an average on-time performance of 85.05% for FY2019/20 (FY2018/19: 83.39%).
Good on-time performance contributes to the quality of passenger experience, enhances our reputation and is beneficial for airlines as it optimises costs. OAG, a global travel data provider, confirmed and recognised our largest three airports for their on-time performance, which received awards in respective categories. See page 12 for more information on these awards.
On-time performance (%)
|O.R. Tambo International Airport||83.97||82.46||84.55|
|Cape Town International Airport||86.33||84.81||86.66|
|King Shaka International Airport||85.27||84.30||85.90|
|Port Elizabeth International Airport||88.42||85.49||84.10|
|Bram Fischer International Airport||82.10||79.91||79.35|
|Upington International Airport||85.05||87.60||83.80|
|East London Airport||87.22||82.67||81.13|
On-time performance (%)
|O.R. Tambo International Airport||3.89||3.97||3.96|
|Cape Town International Airport||4.06||4.07||4.06|
|King Shaka International Airport||4.10||4.18||4.16|
|Port Elizabeth International Airport||3.99||4.02||4.00|
|Bram Fischer International Airport||4.10||4.06||3.87|
|Upington International Airport||4.32||4.37||4.28|
|East London Airport||3.97||3.81||3.92|
Airport service quality (ASQ)
ASQ is a globally established benchmarking programme operated by ACI measuring passengers’ satisfaction on a scale of 1 (poor) to 5 (excellent), which enhances our understanding of passenger satisfaction and facilitates improvement of service quality and business performance. We measure and monitor passenger experience through our ASQ targets on a quarterly basis. We strive to go beyond meeting customer experience expectations, aiming to exceed these by focusing on compliance, efficiency and high levels of service quality. During the year, we embarked on various initiatives to improve our passengers’ experience. See page 12 for more information on the ACI ASQ awards we received in FY2019/20.
In FY2019/20, we introduced Info-Gate totems, increasing the availability and quality of services to passengers. Info- Gate totems are versatile self-service indoor navigation and guidance systems that efficiently increase the number of service counters through digital navigation. These complement our traditional customer engagement touch points of telephone or face to face at information counters. Info-Gate consists of two types of totems. Wayfinding totems allow customers to navigate and find information independently. Interactive counters connect customers via a video camera to a customer service agent for assistance. A total of 51 Info-Gate totems were installed at three international airports: O.R. Tambo International Airport, Cape Town International Airport and King Shaka International Airport. The impact on overall passenger experience has been positive.
Capacity management is an ongoing challenge as we balance our infrastructure, operating procedures and conditions with the accelerating volume of passengers processed through our airports. This is critical to ensuring passenger safety and facilitating an enjoyable travel experience. Considering our limited resources, we also focus on efficiency optimisation to enable growth in the volume of passengers. We are reaching the limits of our existing capacity and capacity expansion is critical. For further information on our capacity expansion projects in Develop Airports performance, see page 88.
Airport operations stakeholder engagement
In FY2019/20, as part of our key account management initiative, we reviewed our operational stakeholder engagement process and invested in a new user-friendly platform that enhances the intelligence derived from our stakeholder surveys by encouraging more in-depth feedback. The surveys focus on operational stakeholders’ experience of Airports Company South Africa in relation to employees and our day-to-day operating environment. Our new approach has resulted in an increase of stakeholder completion rate of 20% and has increased stakeholder satisfaction from 3.5 in FY2018/19 to 3.8 in FY2019/20. The key account management framework also makes use of business intelligence tools to add value to existing engagement and build stronger relationships with stakeholders. In FY2020/21, we intend to develop a bulletin to share a high-level view of key findings from our survey as well as the initiatives we are working on to address these findings.
Ground handling is an integral part of our value chain, including ramp handling (such as water services and bus services), as well as crew and passenger handling (such as baggage, sanitation and catering) services. These services are provided by licensed Airports Company South Africa service providers. In the year under review, we entered litigation proceedings related to ground handling which pronounced the Preferential Procurement Policy Framework Act applies to ground-handling services and as a result, our invitation to market decision must be reviewed and set aside.
Revenue performance, specifically revenue from commercial operations, received significant attention in the year under review. In December 2019, our Board approved a new commercial structure aligned to Vision 2025.
The new structure will enable us to effectively manage commercial revenue-generating opportunities through dedicated workstreams, operationalising the recalibrated commercial operating model, tracking and managing our impact and managing the transformation of our commercial operation by embedding a supportive culture. Through our commercial operations, we intend to become a world-class commercial airport business that delivers superior non-aeronautical returns and enhances customer experiences through collaboration with our commercial partners.
In comparison to last year, commercial revenue increased by 3%, yet we have still not been able to reach our target of 7%. This reflects the challenges emanating from the external operating environment (see page 30.) In addition, as a result of litigation placing our tender processes on hold during the year, we were unable to reach our rental occupation targets or modernise our tenant mix. This posed challenges to existing tenants as they were not able to upgrade their stores.
The conclusion of litigation proceedings between Airports Company South Africa and Imperial Holdings provided clarity in how we will proceed in commercial operations in the year ahead. We are now in a position in which we can plan with certainty and we know what initiatives we need to put in place.
The implementation of social distancing and isolation measures and finally by the national lockdown at the end of FY2019/20 due to COVID-19 significantly impacted our business and that of our concessionaires with a reduction in passenger numbers and commercial activity. In this period concessionaires experienced increased pressure on revenue performance, challenges in the global supply chain and increased pressures due to staffing and sanitation costs, while hotels experienced high levels of cancellations. This has resulted in a significant decrease in our commercial revenues and an increased demand for rental reductions from concessionaires in the last quarter of the financial year, ultimately impacting our overall performance for the year.
|Advertising||197 777||180 124||189 844||9.8%|
|Retail||1 225 277||1 215 353||1 172 909||0.8%|
|Parking||575 135||593 402||551 836||-3.1%|
|Car rental||316 249||304 045||284 752||4%|
|Property rental||791 275||717 294||691 129||10.3%|
|Hotel operations||162 287||155 504||150 075||4.4%|
|Business development||24 445||28 480||44 422||-14.2%|
|Other||75 699||76 060||61 614||0.5%|
|TOTAL||3 368 144||3 270 261||3 146 581||3%|
Total non-aeronautical revenue of R3.37 billion (2019: R3.27 billion) in this section differs from the amounts in the financial statements, as it excludes smoothing adjustments of R12 million (2019: R46 million). Smoothing is an adjustment required for IFRS purposes, however it does not have a bearing in the manner in which the KPI or the commercial portfolios are monitored.
This year saw advertising growth of 9.8% compared to FY2018/19, 5% below target. Our ability to meet our target was hampered by litigation proceedings, concluded in January 2020, which prevented us from awarding advertising tenders. Our current advertising contracts come to an end in FY2021, consequently all our airports will go to market for advertising opportunities. We will also implement an advertising strategy that includes improved digitisation and collaborative partnerships, to provide passengers with a superior experience in interacting with brands at our airports.
Revenue from our retail operations grew 0.8% from FY2018/18, 6% below target. Retail spend per passenger showed a marginal increase of 1.2%, while the average basket size declined 2.8%, indicating passengers are spending less when travelling. Growth was further negatively impacted by in-flight luggage restrictions and a decline in Asian travellers which affected revenue performance in key high-yielding categories such as core duty free and jewellery. In the month of March, retail was severely impacted by the COVID-19 pandemic and associated travel restrictions with some international departures’ shops experiencing a 61% decline in sales and some domestic retailers experiencing as high as 35%.
In FY2019/20, retail leases were extended to 2023, with a 5% escalation realised in minimum rentals compared to an expected 8% to 10% escalation as per lease contracts. Rental escalations were waived on some leases to avoid an increase in vacancies due to a termination of contracts. Vacancy rates reached 6% for FY2019/20, with 22 shop closures across all airports, resulting in a decline in budgeted revenue. Most retailer’s performance did not exceed their minimum rental threshold, resulting in only minimum rentals being realised on most leases.
Car parking and car rental
Car parking revenue decreased by 3.1% from FY2018/19, 11.03% below target, due to multiple days of zero-trading. Total transactions across our three largest international airports declined by 3.75%, with O.R. Tambo International Airport and Cape Town International Airport declining 5.99% and 5.00% respectively and King Shaka International Airport increasing consistently. The growth in e-hailing, the use of the Gautrain and lower levels of corporate and government spending has impacted our parking and car rental business. Nonetheless, car rental has shown a resilience by growing revenue 4% from FY2018/19.
Property rental income has grown 10.3% to R794 million (FY2018/19: R717 million), while hotel operations generated R162 million in revenue (FY2018/19: R156 million). Compared to FY2018/19, property rentals increased 4.7%. This includes rentals from hotel operations and filling stations but excludes subsidiaries. The strong performance can be attributed to lower vacancy rates of 4% and adjustments to contractual frameworks for filling stations, hotels and lounges. See Property Management in Develop Airports on page 88 for further details.
Our hotel portfolio comprises five hotels which are operated through management contracts with renowned hoteliers. City Lodge Hotels operates O.R. Tambo International Airport City Lodge, Port Elizabeth Road Lodge and Bram Fischer Road Lodge. Tsogo Sun operates O.R. Tambo International Airport Intercontinental Hotel and Marriott Hotel operates O.R. Tambo International Airport Transit Hotel. According to the Smith Travel Research Hotel Benchmark report, which provides data on the performance of the South African hospitality industry, O.R. Tambo International Airport Intercontinental Hotel improved its revenue per available room by 9.8% compared to the previous year, while on average South African hotels improved by 3.8%. The O.R. Tambo International Airport Intercontinental Hotel surpassed the performance of all five-star hotels in South Africa, which on average improved by 6.4%.
The lockdown measures did not have any material impact on the property rentals up to the end of the year under review. The hotels did experience cancellations in the month of March 2020, slightly impacting performance. While the future is uncertain, we are considering a number of scenarios to respond to the challenges emerging as a result of the pandemic. We have resolved to provide rental relief to our tenants, in the form of deferred rentals for the first quarter of FY2020/21.
Cargo handling at our nine South Africa airports
We have well-established cargo precincts at a number of our airports, particularly at O.R. Tambo International Airport and Cape Town International Airport. Most cargo volumes are moved through ‘belly space’ on passenger flights.
|Cargo handling volumes (tonnes)||FY2019/20||FY2018/19||FY2017/18||Variance|
|O.R. Tambo International Airport||356 954||380 209||399 781||-6.1%|
|Cape Town International Airport||68 191||79 272||87 540||-14%|
|King Shaka International Airport||17 371||17 587||16 596||-1.2%|
|TOTAL||442 516||477 068||503 917||-7.2%|
The significant and immediate impact of COVID-19 on the global air cargo industry was evident in the last quarter of the year under review. Widespread cancellations of passenger flights considerably reduced bellyhold capacity for the cargo market and volumes were reduced by factory closures and supply chain bottlenecks in the Asia Pacific region as the Chinese manufacturing sector came to a standstill.
While developments in China were key for the initial impact of the pandemic on air freight, outcomes in subsequent months will increasingly reflect the closing of manufacturing sectors in other regions.
Historically, our focus for deriving revenues in the cargo precincts has primarily been on leasing facilities and facilities management, offering limited room for growth and the extension of our brand. To capitalise on new opportunities, in the previous financial year, we developed a cargo evolution roadmap. The roadmap aims to nurture relationships with our cargo business partners, grow revenues through a more responsive and enhanced cargo product and enable stakeholders to take advantage of our current and future cargo offering. There is considerable potential to harness opportunities in various aspects of the cargo portfolio that could grow non-aeronautical revenue and increase cargo traffic. Improving efficiencies, streamlining processes and introducing new methods of planning for and delivering cargo infrastructure will unlock new opportunities in the cargo value chain.
We have outlined and committed to the following key objectives to reach by 2025:
- Grow cargo awareness, skills and experience · Foster a win-win partnership with local, regional and international role players
- Grow cargo revenue through a co-created value proposition for all business partners
- Define and embed operational, planning and development guidelines
- Execute approved development plans
During the year under review, we started embedding the foundations for these objectives and building blocks into our operations. An engagement plan was developed to ensure collaboration with external stakeholders as we identified and defined participation requirements for relevant regional economic development initiatives such as Special Economic Zones and identified ancillary land parcels to support future developments for some of our key airports relating to cargo. We also initiated the development of proposals for alternative cargo business models and undertook integrated planning processes for cargo-related infrastructure. Our airports are diverse, we therefore anticipate various models may be needed to support cargo at our airports. All these activities enable us to determine the best long-term course of action in cargo. We remain confident any approved investments we make in cargo will contribute to long-term value creation for the Group.
Towards the end of the financial year, it became clear the social and economic impacts of COVID-19 will be pervasive globally, impacting every country, industry, business and individual. The global economic slowdown and an expected reduction in passenger numbers and routes due to COVID-19 leaves significant uncertainty, with no end in sight. As the impact of COVID-19 becomes more evident, we will undertake intensive market analysis of the domestic and international factors that will impact how we run airports. Under these unprecedented circumstances, only time will tell how and when the aviation industry will normalise.
Looking forward, our commercial operations will remain on a recovery trajectory. We will observe the response of global airports to ensure proportional response, prioritising passenger number reductions over minimum annual guaranteed rent reductions. We will keep close communication with concessionaires regarding risks and further communicate best-practice and measures to be implemented. Although we expect to be challenged by these circumstances, we must also prepare for the tide to turn and be ready to take advantage of commercial opportunities when they arise. Consequently, we will follow through on our plans to go out on tender in retail, advertising, car hire and the regularisation of e-hailing.
Running airports will be our primary focus and we will concentrate on operation priorities such as enforcing the government regulations, rebuilding passenger confidence, ensuring the health of staff, stakeholders and airport users and improving operational efficiency. In the long term, we aim to migrate the current aerotropolis structures and initiatives into new governance structures that extract greater value. We remain committed to unlocking long-term value by way of effective integrated spatial planning, land acquisition, zoning and development.