Large commercial airports in the United States : operative revenue framework (original) (raw)

Determinants of financial health of US general aviation airports

Journal of Airport Management, 2008

This survey-based study investigates the current financial environment of US general aviation airports. Due to a dearth of data and research on the financial performance of general aviation airports, the paper provides vital information regarding the critical needs and major revenue sources of such airports.The findings suggest that general aviation airports can be self-sustaining regardless of their location, runway length and other airport-specific characteristics.The attitudes of the airport manager towards the importance of financial self-sustainability, positive relationships with local communities, and utilisation of non-traditional and non-aviation revenue sources are found to be critical for the financial health of general aviation airports. In addition, the research provides estimates of the funding needs of US general aviation airports and evidence of the cumulative demand for T-hangars on a national basis.

The sky is the limit? The determinants and constraints of European airports commercial revenues

Journal of Air Transport Management, 2011

This study investigates the determinants of commercial and retail airport revenues from real estate operations. Aviation revenues per passenger are mainly determined by the national income per capita in the area where the airport is located, the percentage of leisure travelers and the size of the airport. Main drivers of commercial revenues per passenger include the number of passengers passing through the airport, the ratio of commercial to total revenues, national income, the share of domestic and leisure travelers and the number of flights. These results are in line with previous findings of a negative influence of business travelers on commercial revenues per passenger. We also find that a large amount of retail space per passenger is generally associated with lower commercial revenues per square meter confirming decreasing marginal revenue effects. Real estate revenues per passenger are positively associated with national income per capita at airport location, share of intra-EU passengers and percent delayed flights.► Aviation and non-aviation revenues are strongly interlinked. ► Share of leisure travelers and size of airport are major revenue determinants. ► Aviation revenues per passenger also explained by national income per capita. ► Higher supply of retail space appears to depress commercial revenues per unit. ► Share of business travelers affects commercial revenues negatively.

Analyzing the Financial Impact on Airports of Remote Airport Ground Transportation Terminals

Transportation Research Record, 1986

Airline deregulation in the United States has had a significant impact not only on the airlines but also on the airports that facilitate air travel. Airline "wars" and competition have received considerable attention, but little has been written on competition among airports for airline travellers. Recent steep discounting of fares between major airport hubs and the withdrawal of major carrier service from many smaller airports has led major airport hubs to expand their geographic base, drawing patrons away from smaller airports nearby (50 to 100 mi). This trend has had obvious negative effects on the smaller airports and positive benefits on the more fortunate, larger hubs, which now enjoy greater revenue from additional patrons. In addition, an upward spiral effect is evident when airlines view the hub as a larger market and add additional or more direct flight service. This only accelerates the move away from smaller airports. Seeking to provide service and profit from ...

The Commercial Performance of Global Airports

Transport Policy , 2018

Revenues from non-aeronautical business have received increasing attention from airports seeking to enhance their profitability. This study analyzes the commercial performance of global airports using a panel dataset of 75 airports in 30 countries. Applying pooled OLS, random effects and 3SLS estimation frameworks, we identify the main drivers of financial performance. Our results are in line with the existing literature, where the share of international passengers, financial risk as well as airport size and the mix and intra-terminal location of retail space are found to be significant determinants. The latter finding indicates the presence of economies of scale in generating higher commercial revenue and ensuring profitability for an airport's non-aeronautical operations. No empirical support is found for the hypothesis that privatization or state ownership of an airport and/or the national income per capita are significant factors of an airport's financial performance. Regarding the retail mix, a higher share of food and beverage outlets appears to depress the commercial yield while a higher percentage of outlets located airside is associated with higher yields.

Economic Evaluation of Investments in Airports: Recent Developments

Journal of Benefit-Cost Analysis, 2021

The problem of how to evaluate investments in airports has now been studied for over 50 years. This paper analyzes the use of different methods like cost–benefit analysis (CBA), economic impact analysis (EIA), and computable general equilibrium (CGE) models to address the question. It assesses the strength and weaknesses of each method, and it discusses which methods have been used in different countries. The paper argues that the CBA approach and the newer CGE modeling approach address the policy issue well and that both methods are appropriate, although improvements are possible, especially in the newer aspects of evaluation. Furthermore, more data intensive CGE models are able to analyze broader aspects of the evaluation question for which CBA has had difficulty. EIA does not address the problem satisfactorily, and it misleads air transport policy. But this evaluation contrasts sharply with practice. EIA has been extensively used to decide on airport investment. CGE approaches ar...

Inverting the regulatory rules? Optimizing airport regulation to account for commercial revenues

This paper analyzes the role of commercial revenues in today's airport regulatory system. We find that the current regulatory regime only partially achieves core aims such as welfare maximization. After highlighting instances in which airport price regulation is not economically justified, we explore the potential for airports to exercise market power in the commercial sector. In certain circumstances, we advocate the introduction of an 'inverted' dual till system under which commercial as opposed to aviation revenues are the focus of price regulation. The suitability of such a system varies from airport to airport, however, depending on various factors, such as the airport's competitive environment and the presence of capacity constraints. --