Non-Aeronautical Revenue Becoming Increasingly Important at Airports

A new report by Frost & Sullivan has assessed the trend towards constructing airport cities and aerotropolises, and boosting airport revenues.

“Analysis of the Global Airport Industry” found that although airports have traditionally been dependent on passenger traffic and airlines for revenue, as customer expectations change and airline operators struggle to sustain profits, airports are diversifying their sources of income to include non-aeronautical avenues.

In the United States alone, the proportion of non-aeronautical revenues such as duty free shops and lounges accounted for 44.8 percent of the total airport revenues in 2012. Aeronautical revenues in China’s Guangzhou airport grew 8.7 percent whereas non-aeronautical revenue grea 28.2 percent in the same year, according to the report.

Airports are investing heavily in optimising revenue per visitor by providing parking facilities, conference rooms and boarding and lodging facilities according to Forst & Sullivan Industry Analyst Renganathan Krishnamurthy.

Both governments and airports are constructing airport cities to boost overall business in the surrounding regions as well as increasing revenue.

“This centerpiece approach is expected to significantly drive revenues for airports,” observed Krishnamurthy. “However, airport cities are long-term strategies. It will require the consensus of a host of stakeholders along with effective planning and execution to make the concept commercially viable on a global scale,” he said.

Airports are also improving cargo traffic by building specialised cargo facilities, expanding technologies and hiring personnel to reduce overall handling time – an important development in order to make air cargo an attractive proposition for time-constrained businesses.

"Analysis of the Global Airport Industry" is part of the Business and Financial Services subscription. Frost & Sullivan’s related studies include: Global Civil Helicopters Market, Commercial Aircraft Fuel Systems Market, Optionally Piloted Helicopters and Global Airport IT Market.