The global uncertainty created due to the coronavirus pandemic has put more than $20 billion worth of airport infrastructure projects at risk of delays as governments and investors may face difficulties in obtaining financing for the sector among the hardest hit by the pandemic.

The Asian Infrastructure and Investment Bank (AIIB) in its latest report expressed concern that many projects will inevitably be delayed for years, rather than months, given the large financing needs and increased uncertainty about future profitability.

“As of March 2020, the value of announced airport projects (pre-financing and financing), ranging from those still at the stage of conception to those where financing is being arranged but not closed, amounted to USD122 billion. These comprise 59 recently announced airport infrastructure listed projects located all around the world, but primarily in the Asia Pacific and Europe, with five megaprojects accounting for more than 50 percent of the total investment volume,” said AIIB

The AIIB informed that among the said 59 airport infrastructure projects, 31 are in countries that are either rated below or at risk of slipping below investment grade. Based on these criteria, we can estimate that projects worth as much as USD20 billion in countries with poor sovereign ratings could face potential financing difficulties.

For airlines, the world’s leading economies have already announced various bailout packages to rescue the industry however, more state assistance could be needed, said AIIB.

Giving its outlook for airport infrastructure projects, AIIB said that the vast majority of airports in developing economies will remain in public ownership for the foreseeable future, and the deteriorating investment credit rating of the governments and liquidity shortage will complicate access to finance for airport infrastructure projects.

Meanwhile, the airport projects that are in private entities (mostly in developed economies), short-term public support may be required.