Airports: Revenue Streams And Business Models Explained

Airports are big business, with global airport revenues hitting $131 billion in 2013. Airports make money in a variety of ways, including aeronautical and non-aeronautical revenue streams. Aeronautical revenue includes airline terminal space rentals, airline landing fees, and usage fees for terminals, gates, services, and passenger counts. Non-aeronautical revenue includes income from retail shops, food and beverage sales, and parking. Airports also generate income by leasing facilities to airlines and air-freight companies, and through government grants and airport bonds.

Leasing facilities to airlines, shops and air-freight companies

Airports make money by leasing their facilities to airlines, shops and air-freight companies. Airlines pay rent for counter and gate space, training facilities, storage facilities, hangars, offices, and maintenance facilities. Airports also rent out terminal spaces, including gates, ticketing counters, and baggage claim areas.

Airports also make money from retail and concessions sales. According to an ACI survey, airline passengers tend to have more spending power than the national median. Airports are increasingly featuring more food and beverage options, including local restaurants and vendors, and in 2013, U.S. airports generated $587 million from food and beverage sales. Airports also make money from property development, including constructing hotels, office buildings, and commercial real estate on airport property.

Charging for fuel and parking

Airports make money by charging for fuel and parking. They also make money by leasing their facilities to different entities, including retail shops, airlines, and air-freight companies. There are also very small fees and taxes on airline tickets that can generate money for the airport.

Airports are financed through municipal bonds and are publicly owned. However, they own the facilities, which they can rent out to airlines and other businesses. This includes counter and gate space, training facilities, storage facilities, hangars, offices, and maintenance facilities.

Airports also generate income through property development, constructing hotels, office buildings, and commercial real estate on airport property. They can also create flexible shared spaces within terminals, allowing for pop-up stores, exhibitions, and events.

In addition to these sources of income, airports also make money from food and beverage sales. In 2013, U.S. airports generated $587 million from food and beverage sales, or about 7.2% of non-aeronautical revenue. This is likely due to the heightened security measures mandated after the terrorist attacks of September 11, 2001, which means passengers are spending more time in airport terminals, arriving early to ensure they clear security in time for their flights.

Fees and taxes on airline tickets

Airports make money in a variety of ways. One of these is through fees and taxes on airline tickets. These fees and taxes are typically very small, but they can generate a significant amount of money for the airport when applied to the large number of passengers travelling through.

Airlines act as airport tenants, paying rent for counter and gate space, training facilities, storage facilities, hangars, offices, and maintenance facilities. This is a major source of aeronautical revenue, which comprises the majority of airport income. In 2013, U.S. airports generated about $10 billion in aeronautical revenue, or about 55% of total operating revenue, according to Federal Aviation Administration (FAA) data.

Airports also generate income from retail and concessions sales. Airline passengers typically have more spending power, and the heightened security measures mandated after the terrorist attacks of Sept. 11, 2001, mean passengers are spending more time in airport terminals, arriving early to ensure they clear security in time for their flights. As a result, airports are featuring more food and beverage options, expanding their offerings beyond national franchisers to include local restaurants and vendors. In 2013, U.S. airports generated $587 million from food and beverage sales, or about 7.2% of non-aeronautical revenue.

In addition to these sources of income, airports also make money by charging for fuel and parking, as well as through airport bonds and government grants.

Renting terminal spaces, gates, ticketing counters and baggage claim areas

Airports make money by renting out terminal spaces, gates, ticketing counters, and baggage claim areas. Airlines act as tenants, paying rent for counter and gate space, training facilities, storage facilities, hangars, offices, and maintenance facilities. This is a consistent income stream for airports.

In 2013, U.S. airports generated about $10 billion in aeronautical revenue, or about 55% of total operating revenue, according to Federal Aviation Administration (FAA) data. Aeronautical revenue comprises the majority of airport income and includes airline terminal space rentals, airline landing fees, and usage fees for terminals, gates, services, and passenger counts.

Airports also generate income from retail and concessions sales. Airline passengers typically have more spending power, according to the ACI survey. As of 2013, passengers had a median household income of $75,000 to $90,000, compared to a national median of a little more than $52,000. Airports are increasingly featuring more food and beverage options, expanding their offerings beyond national franchisers to include local restaurants and vendors. In 2013, U.S. airports generated $587 million from food and beverage sales, or about 7.2% of non-aeronautical revenue.

Airports can also develop flexible shared spaces within terminals, allowing for pop-up stores, exhibitions, and events, creating a dynamic airport environment.

Food and beverage sales

Airports make money through a combination of aeronautical and non-aeronautical revenue. Food and beverage sales fall under the latter category, which generated about $587 million in the US in 2013. This is a significant source of income for airports, and one that has been growing in recent years.

Airports have traditionally relied on national franchisers to provide food and beverage options, but they are increasingly turning to local restaurants and vendors to provide a wider range of choices for passengers. This is partly due to the fact that passengers now tend to spend more time in airport terminals, arriving early to clear security, and so are more likely to purchase food and drink while they wait.

Airports can also make money by charging rent to food and beverage outlets, as well as through the sale of advertising space in these areas.

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