Airports have come a LONG way. Years ago, they were dark, cramped places with few amenities. But nowadays most larger airports are like small cities, with restaurants, hotels, things to see and buy, and thousands of employees.
Have you ever wondered about how airports make money? I don’t mean the airlines or individual places you can visit within the airports. I mean the actual airports. I did. Here’s what I found out.
According to U.S. Global investor, the cost to operate an airport in 2020 is about $13.55 per person. That amount varies based on size and location.
You would think, as entities almost always owned by federal, city or county governments or by a regional airport authority that’s part of the local government (here’s how all of THAT works), that airports would be crying for money. Fortunately, that’s usually not the case.
About 56% of airport revenue comes from the airlines and their passengers. Specifically terminal, landing and passenger fees paid by airlines.
A little less than 50% of airports’ revenue comes from non-aeronautical activities. That would be revenue from on-site parking garages, as well as rent and other payments from hotels, lounges, restaurants, retail establishments, car rental companies, etc.
4.6% is from non-operating activities. That would include things such as advertising you see around the airport, sponsored spaces and special events.
Simple Flying gave an excellent example in 2018 of how all of this adds together so an airport makes a profit:
…Here is a summary of what Heathrow receives every time a plane lands or takes off from the facility.
- An average of $9,500 for each landing plane. The price varies depending on the size of the plane and larger ones pay higher fees that cover runway time, gate space, check-in area. A small 76-passenger Bombardier Dash 8 will pay just $999, while a Boeing 747 will be charged $11,600.
- Departing aircraft are charged again based on the number of passengers and their destination. A passenger flying outside Europe costs the airline $58. If the passenger connects through Heathrow the fee drops to $44 and if the aircraft is parked at a remote stand and not at a gate the fee per passenger is reduced to $39.
If we make a rough calculation we will see that a small Dash 8 flying on a domestic route will be charged a total of $2,400 for both arrival and departure, while the large 747 flying on a long-haul route will bring $31,700 for the airport. Naturally, airlines with frequent flights from Heathrow have contracts for discounted prices.
At the end of the day, the airport receives about $29 from the ticket of each passenger…
It’s also interesting to note that airports make much more money on departing passengers than those just arriving. Which kind of makes sense – when you’re departing, you’re kind of stuck at the airport for a while. Unless there’s an issue with your luggage when you arrive, you just get your stuff and leave. That’s why you see more food and retail space near the gates than at luggage pickup 😉
By the way, want to know how much money airports make? According to International Airport Review, as of March 2019, global airport revenues had grown by 6.2%, to $172.2 billion U.S. dollars.
That’s a whole lot of Reese’s Peanut Butter Cups sold at Houston News. 😉
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4 comments
[…] Food and beverage programs make up a substantial portion of business for airports across the country, much of which was devastated by reduced flight schedules and reduced foot traffic amid the coronavirus crisis. More specifically, just under 50 percent of an airport’s revenue comes from restaurants, airport lounges and retail establishments, according to data from airline blog YourMilageMayVary.net. […]
Super interesting, although it makes Heathrow’s jacking up prices for Covid all the more galling.
[…] relaxation, or even educational opportunities. These attractions benefit airports too; roughly 40% of airports’ estimated revenues come from nonaeronautical activities like shopping, dining, and lodging, according to 2020 data […]
I’m going to build 3 airport in my country.