Airport Cities: Urban Hubs Of Aviation And Commerce

The concept of an airport city is an idea that was featured in Time's 10 ideas that will change the world in 2011. An airport city is designed with passengers, cargo, businesses, workers, and residents in mind. The most common commercial activities in airport cities include duty-free shops, restaurants, hotels, and banks. Airport cities can be found at major airports worldwide, particularly in Europe, North America, South America, and Africa. They are also being planned for new airports in Asia.

Commercial activities

Airport cities are often hubs of diverse commercial activities, leveraging their strategic location and connectivity to stimulate economic growth. Firstly, the presence of an airport significantly impacts local employment rates. Research by McGraw (2020) revealed that airports in mid-sized and smaller cities contributed to an average of 3.9% growth in total employment per decade. This increase in jobs is not limited to the airport premises but extends to various service sectors, including wholesale, retail, finance, insurance, real estate, and government transportation.

Moreover, Bilotkach's study in 2015 underscored the positive correlation between the number of non-stop flight destinations and the total number of jobs, business establishments, and average wages in the region. Adding flights to new destinations, particularly those offering further connections, broadens a region's access to markets, fostering opportunities for commercial expansion. This "connectivity" metric reflects how well an airport and its surrounding area are integrated into domestic and international economic networks.

Airports also play a pivotal role in facilitating business operations by providing rapid long-distance cargo movement and passenger transportation. Companies rely on these services for intermediate purchases, production, and sales. For instance, a business may need to procure electronic components for product assembly and then distribute the finished product to customers via air freight. Thus, the efficiency and reach of an airport can directly influence the commercial success of local enterprises.

Additionally, local businesses themselves are significant contributors to passenger and freight activity at airports. This symbiotic relationship between the airport and local enterprises further underscores the interdependence of commercial activities within airport cities. As a result, airport cities often experience a self-reinforcing cycle of economic growth and commercial development.

In summary, airport cities are characterised by a diverse range of commercial activities, encompassing transportation, logistics, retail, finance, and more. The presence of an airport acts as a catalyst for economic growth, employment, and business opportunities, making airport cities vibrant centres of commercial enterprise.

Non-aeronautical revenue sources

Airport cities, or aerotropoli, are urban developments built around an airport. These cities have a diverse range of revenue sources that contribute to their overall income and help them remain competitive. While aeronautical revenue, which comes from fees charged to airlines and aviation-related activities, is the primary source of income for airport cities, non-aeronautical revenue also plays a significant role in their financial success.

Non-aeronautical revenue refers to income generated from sources other than airlines and aircraft. This includes a wide range of activities such as retail sales, parking, and real estate rentals. In fact, according to recent estimates, non-aeronautical revenue accounts for 38.80% of the total revenue generated by airports worldwide.

Retail concessions, which include duty-free stores, restaurants, and cafes, make up a significant portion of non-aeronautical revenue, contributing 26.40% to the total. Airports also generate income by leasing space to rental car companies, selling fuel and oil to airlines, and offering advertising opportunities on billboards and digital screens.

In addition to these, airport cities have other non-aeronautical revenue streams such as telecommunications, car rentals, and passenger experience offerings. They may also offer conference and event spaces, lounges, and pre-ordered meals to enhance the travel experience of their passengers. By investing in stocks, bonds, or other financial instruments, airport cities can generate investment income as a form of non-operating revenue. Furthermore, they may rent out unused property for commercial or industrial purposes, including leasing land and buildings.

The growth of the global airport non-aeronautical revenue market is expected to be significant, with a projected increase of USD 35,045.11 million from 2023 to 2027, according to Technavio. This growth underscores the importance of non-aeronautical revenue sources in the overall financial strategy of airport cities.

Government/regulatory support

Airport cities are often associated with large airports in a given region and are usually located in smaller towns outside the city they serve.

The development and success of airport cities hinge on strong government and regulatory support. This support encompasses a range of strategic initiatives and policies that facilitate the efficient operation of these aviation hubs. Firstly, the government plays a pivotal role in establishing and enforcing safety standards for airport design, construction, and operation. This includes regular inspections and stringent adherence to safety protocols to mitigate risks and ensure the well-being of travellers, staff, and surrounding communities. The Federal Aviation Administration (FAA) in the United States, for example, has been tasked with overseeing airport safety, allocating grants for airport planning and development, and regulating commercial space transportation.

Additionally, government intervention is crucial in addressing regulatory capture, where the regulated industry unduly influences the regulatory body. For instance, the FAA has faced criticism for allowing airlines to operate aircraft that were overdue for safety inspections, highlighting the need for stronger oversight and penalties.

The government also contributes to the development of airport cities by investing in infrastructure. This includes allocating funds for airport expansion and modernization, and the integration of new technologies. Such investments aim to enhance the overall traveller experience, reduce environmental impacts, and foster economic growth in the region. Moreover, government agencies, such as the FAA, play a key role in managing air traffic control (ATC) services, which are essential for the safe and efficient movement of aircraft.

In some cases, governments may also provide incentives or subsidies to airlines and related businesses to encourage their establishment or expansion within airport cities. This can include tax breaks, reduced landing fees, or other financial incentives to promote economic activity and create job opportunities in the region. Furthermore, the government is responsible for establishing and enforcing regulations that govern airline fares and the routes served by air carriers. This regulatory aspect ensures fair competition and accessibility for travellers.

Lastly, government support extends beyond physical infrastructure to include the development of human resources. This involves providing training and educational programmes to ensure a skilled aviation workforce. By investing in the development of aviation professionals, the government contributes to the long-term sustainability and growth of airport cities.

Airport transit process

Airport cities are often referred to as 'aerotropoli', a term coined by academic and author John Kasarda. It describes a city that has an airport at its centre, with the economy and culture of the city-region heavily influenced by this airport.

Now, for the airport transit process:

When travelling through an airport, the first step is to locate the correct terminal and check-in area for your flight. Many airports have multiple terminals, so it is important to check this information in advance. Most airlines offer online or mobile check-in options, allowing passengers to select their seats and obtain a boarding pass before arriving at the airport. Baggage can also be checked-in online, with some airlines offering home luggage collection services. At the airport, self-service kiosks are often available for faster bag drop-off.

Once checked in, passengers proceed to security checks. Here, you will need to remove items like liquids, electronics, and metal objects from your carry-on luggage and place them in separate trays for X-ray screening. It is important to familiarise yourself with the airport's rules on prohibited items to avoid any delays. After clearing security, you can locate your departure gate and spend time in the airport's duty-free shops, restaurants, or lounges.

For connecting flights, or when transferring to an international line, the process may vary. Passengers usually need to collect their baggage at the transfer airport and proceed through security again to deliver their baggage to the next airline. It is important to review the baggage rules and allow sufficient time for clearing security and reaching the departure gate. Some airports offer expedited transfers, with separate security lanes for connecting passengers.

When travelling to a new country, you may need to undergo immigration procedures. This involves presenting your passport and, if required, a visa to the immigration officials. A transit visa may be necessary if you are only passing through a country to reach your final destination. It is important to check the specific visa requirements for each country and have the necessary documentation ready.

Finally, before boarding, ensure you have the required boarding pass and any necessary identification. The boarding pass can be obtained during the check-in process, either at the airport or online, and it is essential for gaining access to the aircraft.

Land-side business development

Airport cities are often referred to as 'aerotropoli', and they are areas of dense economic activity surrounding an airport.

The development of land-side businesses is a crucial aspect of enhancing operational efficiency and elevating the customer experience at airports. Here are some strategies and considerations for land-side business development:

Safety and Security:

Prioritize the safety and security of employees, installers, and passengers alike. Implement strict safety standards and regulations, especially in secure areas, to ensure a safe environment for all. Regularly assess and address potential risks and vulnerabilities to stay ahead of any threats.

Operational Efficiency:

Streamline day-to-day land-side operations by utilizing integrated solutions. These solutions can encompass improved communication, coordination, and navigation technologies and practices. Draw on industry knowledge and best practices to optimize operational flow and logistics, reducing bottlenecks and enhancing overall efficiency.

Customer Experience:

Focus on making the airport user-friendly and accessible. This includes clear signage, efficient security processes, and easy check-in and ticketing procedures. Consider the layout and design of the airport to ensure a seamless travel experience, from arrival to departure.

Staff Wellbeing:

Recognize that operators and agents work in a high-stress, fast-paced environment, and their wellbeing is paramount. Implement measures to ensure staff safety, comfort, and alertness. This can include providing comfortable break areas, adequate staffing levels to reduce individual workload, and access to mental health support and resources to combat fatigue and promote resilience.

Business Partnerships:

Foster relationships with a diverse range of businesses and service providers to create a vibrant airport city. From retail and dining options to financial and travel services, a mix of offerings can drive economic growth and cater to the varied needs of travellers.

By implementing these strategies, airports can develop their land-side businesses effectively, contributing to a thriving airport city that is efficient, secure, and traveller-centric.

Frequently asked questions