How do airports generate "indirect" income i.e. income from things other than aviation operations (landing, FBO services, repairs)?
8$\begingroup$ Perhaps this question should ask how do airports generate non-aviation income, rather than how can they. The latter seems very broad and subjective, which makes it a bad fit for SE sites. For example, an airport could smuggle drugs to raise cash, but that's probably not a helpful answer. :) In all seriousness, though, see How to Ask for more information about what makes a good SE question. $\endgroup$– reirabApr 14, 2015 at 5:56
4$\begingroup$ Asking for the non-aviation income that airports have seems like it could be off-topic, considering that this is a site about aviation. $\endgroup$– foootApr 14, 2015 at 19:40
2$\begingroup$ @fooot That seems like an overly literal reading. If we exclude completely irrelevant lines of business (e.g. drug smuggling, thank you reirab), the question is asking about aspects of running an airport. Specifically, where airports make money besides the obvious sources (terminal rental and landing fees). It's not particularly different from the questions that ask about the expenses involved with running an airline or how commercial airlines pay for fuel. Just because a question "could" be off-topic doesn't mean it has to be closed. $\endgroup$– Zach LiptonApr 14, 2015 at 21:55
$\begingroup$ @ZachLipton I understand your reasoning there. It's just that this question seems further removed from aviation than the others. It's a tough call and I waited until someone else made the first vote. I just wanted to communicate what made it seem off-topic to me and possibly others. $\endgroup$– foootApr 15, 2015 at 1:02
$\begingroup$ @ZachLipton Honestly, we probably should have closed it as too broad rather than off-topic. While the drug smuggling part was obviously a joke (though an airport would actually be well-suited for this purpose and baggage handlers at major airports have been busted for this,) the question, as originally stated, was extremely broad. The larger airports are practically cities in their own right. For that matter, SeaTac actually is a city. The number of ways that they could generate revenue is pretty much limitless. $\endgroup$– reirabApr 15, 2015 at 4:18
One way to approach this question is to look at the annual budget for an airport. I'm going to assume that you mean a large passenger airport as opposed to one focused on serving general aviation, cargo, etc...
Let's use SFO (San Francisco International) as our example. It's a city-owned airport, so the budget is a public document. Here's the budget for FY2014/15 and FY2015/16.
Page 5 (page 7 in the PDF) breaks down major sources of revenue. We have some that fall into the category of "direct" revenue in your question: landing fees, terminal rentals, etc... under the "aviation" category. Some of the terminal rental fees include space for purposes you might not consider aviation uses, like back offices for airline staff We also have $60-80M in "PFC Revenue." PFC stands for "Passenger Facility Charge"; it's a charge that is added to the ticket price of everyone flying out of that airport.
Finally, there are the non-aviation revenues. The bulk of those come in two categories: parking and concessions. Parking is self-explanatory. Concessions describes all the independent businesses that operate at the airport. Many businesses lease terminal space for retail shops (including duty-free), restaurants and take-out food, lounges, currency exchange, etc... They all pay rent and/or a share of revenue to the airport based on the terms of their lease. SFO also books about $23M/year in revenue off the sale of electricity, as the airport sells electricity to its tenants (airlines, concessions, etc...). I suspect, but am not positive, that these electricity sales are a nice moneymaker for the airport, as it can purchase hydropower from the City at extremely low cost and resell it at market (utility company) rates to its tenants. This is a quirk particular to San Francisco however.
If you scroll through the detailed budget in the PDF, you'll find entries for other revenue categories. Examples include advertising fees (Clear Channel pays the airport to put up ads in the terminals and other areas), revenue for things like ATMs and baggage carts, leases to rental car companies, fees paid by taxicabs and airport buses for the right to access airport property, and even permit fees paid by filmmakers and photographers using the airport. Heck, the airport even charges the regional transit agency $3.2M/year in rent and custodial fees for the airport train station. Browsing through the budget should give you a pretty good idea where a large US airport can make money from non-aviation services.
3$\begingroup$ and investment. E.g. Schiphol as a company has a profitable real estate investment and speculation arm, having part ownership in things like other airports, shopping malls, ports, etc. etc. $\endgroup$– jwentingApr 14, 2015 at 5:19
$\begingroup$ @jwenting: Those are other activities of the company that owns the airport. I would not consider them indirect income of the airport itself. $\endgroup$ Apr 14, 2015 at 6:48
4$\begingroup$ Another approach practiced to carrying degrees in various countries: receive massive government subsidies, either in the form of direct cash payments, or capital improvements the airport doesn't pay for. $\endgroup$ Apr 14, 2015 at 7:34
2$\begingroup$ @JanHudec economically, the company is the airport... Else where do you stop. Schiphol hosts many companies that rent space in office buildings on its premises too. But technically by some definition they're not "the airport" because they're outside the perimeter fence (same as the long term car park, it too is outside the perimeter fence). Or what about the taxi licenses the airport sells without which a taxi operator isn't allowed to pick up fares at the airport? Is that "the airport" doing it or the company operating "the airport"? $\endgroup$– jwentingApr 14, 2015 at 19:09
$\begingroup$ When I took an airport management course in college we were taught that parking fees is the #1 source of airport revenue. I don't have any actual or current percentage numbers to back that up. $\endgroup$ Dec 13, 2021 at 2:15
Airports tend to acquire a lot of land in their vicinity.
This can be to mitigate noise or complaints from people living under approach/departure paths, for safety in the event of insufficient elevation, for future expansion/extensions of runways or of parking facilities for cars/planes etc.
Grazing animals don't tend to worry too much about airplanes, so "spare" land is often used for agriculture and horticulture (growing animals and plants) Low income but low costs too.
Some businesses need to be located near to airports for reasons, like courier/freight operations or rental car pickups. Long-term carparks can be on remote and less-desirable parts of airport land and still generate a profit. All this land can be re-designated as needs change in the future.
Airport companies will also own the roads across their land. This can sometimes lead to odd interpretations and loopholes in road laws. Locally, police cannot ticket a motorist for speeding on airport land roads, because its not public property. So there are an inordinate amount of speedbumps and sharp turns.
Also, bicycles are excluded from some roads used for pickup/drop off.
A motorist pays to use the parking, a traveller pays a departure tax in their ticket, an advertiser pays for billboard or signage space, and a business pays to lease a concession or shop space in the terminal. Ultimately the visitor pays in the form of increased prices, $10 for a coffee.
The airport company controls everything on their land. You cannot get a phone line or fibre installed to your site. Instead, the telco terminates the service in a handover building at the boundary, and the airport company runs the lead-in the rest of the distance. This is a license to print money because there is no competition so they can charge whatever the customer will pay.
Inside the terminal there are strict controls over transmitters too - you can't even have a wireless ethernet network of your own. Instead you have to buy a SSID which is configured on the airport's own wireless infrastructure, and trunked back via a VLAN. Everything costs money every month.
Admittedly this makes sense from a safety standpoint - high power transmitters may have an effect on operations by interfering with aircraft, or more likely interfering with hand-held radios. And the supply of wireless from a single infrastructure will eliminate contention while providing a better and fairer service.
The stinger comes in the setup and on-going costs being a literal monopoly environment.