Non-aeronautical income accounts for bulk of airports' revenues
Airports have traditionally been dependent on passenger traffic and airlines for revenues but new analysis from Frost & Sullivan, Analysis of the Global Airport Industry, reveals that in the United States alone, the proportion of non-aeronautical revenues accounted for 44.8% of the total airport revenues in 2012. The trend is similar in developing countries too. While aeronautical revenues in China’s Guangzhou airport grew 8.7%, non-aeronautical revenue grew 28.2% in 2012.
New analysis from Frost & Sullivan, Analysis of the Global Airport Industry , reveals that in the United States alone, the proportion of non-aeronautical revenues accounted for 44.8% of the total airport revenues in 2012. The trend is similar in developing countries too. While aeronautical revenues in China’s Guangzhou airport grew 8.7%, non-aeronautical revenue grew 28.2% in 2012.
Safety concerns along with government regulations and interference often close viable growth opportunities in the airport industry. Airports need to manage critical resources, such as air space and runways, while complying with government regulations and simultaneously increasing profits.
“To achieve this balance, airports are investing heavily in optimising revenue per visitor,” said Frost & Sullivan Industry Analyst Renganathan Krishnamurthy. “Providing parking facilities, conference rooms, and boarding and lodging facilities opens up new opportunities for income generation.”
Further, airports are improving cargo traffic. By building specialised cargo facilities, expanding technologies and hiring personnel to reduce overall handling time, air cargo can be made an attractive proposition for time-constrained businesses.
Apart from an increased focus on non-aeronautical revenue, governments and airports are constructing airport cities to boost overall business in the surrounding regions. An aerotropolis or airport city is an urban planning and development concept in which an entire town or city’s business revolves around an airport and its related activities.
“This centrepiece 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.”
