How do airports generate "indirect" income i.e. income from things other than aviation operations (landing, FBO services, repairs)?

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    $\begingroup$ "tax free" shops for one. The rent on those is high. $\endgroup$ Apr 14 '15 at 0:32
  • $\begingroup$ In addition to my answer below, I'll note that airports don't generally provide repair, catering, or cleaning services themselves (they do, in a manner of speaking, provide "landing" services). Airports will generally lease space and facilities to companies that want to provide these services. $\endgroup$ Apr 14 '15 at 2:40
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    $\begingroup$ 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. $\endgroup$
    – reirab
    Apr 14 '15 at 5:56
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    $\begingroup$ Asking for the non-aviation income that airports have seems like it could be off-topic, considering that this is a site about aviation. $\endgroup$
    – fooot
    Apr 14 '15 at 19:40
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    $\begingroup$ @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. $\endgroup$ Apr 14 '15 at 21:55

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.

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    $\begingroup$ 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. $\endgroup$
    – jwenting
    Apr 14 '15 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. $\endgroup$
    – Jan Hudec
    Apr 14 '15 at 6:48
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    $\begingroup$ 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 '15 at 7:34
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    $\begingroup$ @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"? $\endgroup$
    – jwenting
    Apr 14 '15 at 19:09

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