External factors and their impact on non-aeronautical revenue

Abstract

In recent years, non-aeronautical revenue has played an increasing role in airports’ total revenue. To predict the impact that external factors may have on airport revenue, it is essential to understand how non-aeronautical revenue is generated. To help the reader understand these mechanics, this paper examines the main factors underlying the generation of non-aeronautical revenue at airports. Two significant external factors — the current credit crisis and worldwide economic recession, and the recent fluctuations in the price of oil — are then analysed with respect to their potential impact on airlines, passenger volumes and the generation of non-aeronautical revenue for airports. The paper concludes that these external factors do affect airports’ non-aeronautical revenue and that, to a certain extent, airports can take action to mitigate this impact.