We know airlines make revenue through flight tickets and ancillary services offered on board, but how do airports survive in the industry?
Most of the revenue generated by airport is found in non-aeronautical revenue.
Non-aeronautical revenues are the following: parking and ground transportation, rental car services, land and non-terminal services, retail and duty free shops, and food and beverage services. Landing fees is a charge paid by an aircraft to an airport company, where the revenue is generated to pay for maintenance and expansion of the airport’s buildings, facilities and runways. Other revenues include advertising fees that companies pay to the airport in order to have their advertisements up in the terminals; and taxi permits in order to pick up and drop off passengers at the airport.
Airports will lease terminal space and facilities for companies to provide retail, food and beverage services in which they will pay rent and a share of the revenue will go to the airport.
It seems that products bought through the airport’s automated kiosk have become a popular trend in North America. This is also very beneficial for airports as it maximizes the use of space and caters to passengers on the go. Of course, the longer you spend at an airport, the more likely you are to make a purchase. The truth is, passengers are spending more on food and beverages than at duty free and gift shops.
Airports have also spent a lot of time improving the layout of airports. When passengers are able to view all the retailer shops in a glance, this increases their sense of choice; as a result, there is a higher opportunity for making purchases.
Airports also charge a fuel flowage fee, which is a fee levied by an airport operator per unit such as gallons, litres, or pounds of aviation gasoline and jet fuel sold at the airport. In the majority of airports, the flowage fee is required.
In commercial airports, airline companies will need to pay usage fees to use terminals, gates, passenger counts and other services provided by the airport.
The bottom line. Airports have found innovative solutions in generating revenue, most through pay-per-use, including automated kiosks and increased parking fees. One thing I have noticed in recent year is the increased sea of parked cars either temporarily or long-term.