Non-Aeronautical Revenue Keeps Many Airports In The Black

Airport revenue models are as individual as airports themselves which, aside from aviation operations, are generally more different than alike. With the consolidation of commercial carriers nationwide and the drop in revenues associated with fewer routes and flights, airports both large and small continue to evolve their revenue models to make up for shortfalls.

We’ve reported on several airports in previous installments on this page (September 2013  May 2015, July 2015) as well as in our newsletter (April 2015).

A common element has emerged among the adaptive strategies being used to keep operating budgets in the black: a higher percentage of revenues are being derived from non-aeronautical sources.

Aeronautical revenue sources include, of course, landing fees, fuel sales, and larger airports receive lease fees for gate spaces.

Non-aeronautical revenues are derived from sources literally as diverse as one can imagine: Parking is the largest source in many places. Car rentals, in-terminal concessions, hangar leases/rentals, land leases for warehouses, horse pastures, farms, and cell phone towers are among consistent and long-term sources. Other renters of airport land include hotels, offices, cargo operators. small manufacturers, and research and development labs. At some airports, car dealerships lease land to store inventory.

A frequently heard saying is that “they do things bigger in Texas,” and one just has to look at Dallas/Fort Worth International (DFW) to see that at least there, it’s definitely true — nearly $4 million flows into its coffers from over 100 natural gas wells operating on airport land, whose huge footprint is 18,000 acres. Three hotels with a combined total of more than 1,000 rooms operate on the airport. And with 50 square miles of area, the airport is surrounded by miles and miles of frontage roads, which soon will have upwards of four car dealerships. The Infiniti dealership was first to open, and Ken Buchanan, executive VP of revenue management for the airport says, “The Infiniti dealership I believe is the largest Infiniti dealership in the US.”