AirportInfo Non-Aeronautical Revenue July 2017
Non-Aeronautical Revenue Non-aeronautical revenue critically determines the financial viability of an airport, as these revenue sources tend to generate higher profit margins in comparison with aeronautical activities, which are mostly cost-recovery. Aeronautical revenues are collected from such sources as landing charges, which are circumscribed by either regulated tariffs, contractual agreements between carriers and airports, or a combination thereof. Thus, airports are heavily reliant on the non-aeronautical side of the business as a driver of revenue growth. These sources include: Parking and Airport Access Fees for all airport-owned parking lots and, in some cases, off-airport concessions bringing travelers to and from the airport. Rental Car Operations Revenue from rental car operations within or outside a terminal. Terminal Concessions Rents paid by gift shops, restaurants, and newsstands, and, if agreed to in the concession contract, a percentage of the profits. Land Rent Excess airport land may be rented for golf courses, office buildings, hotels, farming or other uses. Advertising Ads placed on airport walls, billboards and buses is a source of airport income. Hotel Revenue from leasing a hotel or operating a hotel within or outside a terminal. 2
Billions of U.S. Dollars U.S. Airports Have Navigated Tough Market Conditions Since 2009 and Have Shown Signs of Recovery % Change YoY 12 10 10% 8% 6% 8 4% 2% 6 0% -2% 4-4% 2-6% -8% 0-10% Aeronautical Operating Revenue Aeronautical Percentage Change from Previous Year Nonaeronautical Operating Revenue Nonaeronautical Percentage Change from Previous Year Note: 2016 is the latest full fiscal year data available in FAA CATS (Compliance Activity Tracking System) database. 3
Parking, Rental Cars and Terminal Concessions are the Three Main Sources of Non-Aeronautical Revenue for U.S. Airports 2016 ($ Millions) Total Operating Revenues $20,068 Million Total Non-Aeronautical Revenues $9,157 Million Hotel, $179, 2% Terminal Services, $436, 5% Other, $941, 10% Aeronautical Revenue, $10,911, 54% Non Aeronautical Revenue, $9,157, 46% Food & Beverage, $707, 8% Retail & Duty Free, $743, 8% Parking & Ground Transportation, $3,785, 41% Land & Non-Terminal Facilities, $663, 7% Rental Cars, $1,703, 19% Notes: 2016 is the latest full fiscal year data available in FAA CATS database. Terminal Concessions include Retail & Duty Free, Food & Beverage and Terminal Services. 4
Non-Aeronautical Revenue has Grown on Average Over 4% Annually Since 2004, Compared to 1.4% Increase in Passenger Enplanement Over the Same Period U.S. Dollars Billions $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $6.87 $7.00 (7.5)% 1.9% $0.33 $0.35 $0.66 $0.79 $1.47 $1.42 $7.51 7.3% $0.38 $0.82 $1.49 $7.80 3.8% $0.44 $0.82 $1.54 $8.22 5.4% $0.38 $0.91 $1.59 $8.66 5.4% $0.46 $0.98 $1.49 $9.11 $9.16 5.1% 0.5% $0.41 $0.40 $1.06 $1.05 $1.60 $1.62 $4.0 $3.0 $2.0 $4.40 $4.45 $4.81 $5.00 $5.33 $5.73 $6.04 $6.09 $1.0 $0.0 Large Medium Small Non-Hub Notes: 2016 is the latest full fiscal year data available in FAA CATS database. CAGR stands for compounded annual growth rate. 5
Terminal Concessions Revenue from U.S. Airports Has Been Increasing Faster than Enplanement U.S. Dollars Millions $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $1,370 (6.6)% $1,346 (1.8)% $371 $321 $536 $540 $1,508 12.1% $378 $603 $1,574 4.4% $391 $644 $1,662 5.6% $410 $664 $1,798 8.2% $430 $1,870 4.0% $468 $713 $743 $1,887 0.9% $436 $743 $600 $400 $200 $0 $463 $484 $526 $539 $588 $655 $659 $707 Food and Beverage Retail and Duty Free *Services and Other Notes: 2016 is the latest full fiscal year data available in FAA CATS database. CAGR stands for compounded annual growth rate. Services and Other includes a variety of amenities and personal services for passengers including ATM s, Foreign Exchange, Internet Kiosks & Luggage Carts. 6
U.S. Dollars Millions U.S. Airports Have Seen Steady Growth in Rental Car and Parking & Ground Transportation Revenue $6,000 $5,000 $4,000 $4,250 $4,307 2.0% $1,371 $1,393 $4,551 8.5% $1,481 $4,726 6.1% $1,537 $4,952 7.8% $1,595 $5,186 8.1% $1,671 $5,521 11.6% $5,488 (1.2)% $1,750 $1,703 $3,000 $2,000 $1,000 $2,880 $2,914 $3,070 $3,189 $3,357 $3,516 $3,772 $3,785 $0 Parking & Ground Transportation Rental Car Notes: 2016 is the latest full fiscal year data available in FAA CATS database. Excludes Customer Facility Charge 7
Due to Higher Share of Origin & Destination Passengers, Medium and Small Hubs Generate Higher Parking Revenue Per Passenger $7.5 Large Medium Small Non $7.0 $6.5 $6.0 $5.5 $5.0 $4.5 $4.0 $3.5 $3.0 Robust public parking and ground transportation revenues in recent years have resulted in growth across all hub sizes. The dominance of O&D traffic at medium, small and non-hub airports translated to higher parking & ground transportation revenue on a per enplanement basis. Large hubs reported a lower figure due to a relatively higher share of connecting passengers. Note: 2016 is the latest full fiscal year data available in FAA CATS database. Figures used are median for each FAA hub category. 8
AirportInfo July 2017 Contact: Economic Affairs and Research Tel: 202-293-8500 Email: EconomicAffairs@aci-na.org www.aci-na.org