Airport Investment and Future Growth: Getting the Policies Right 

Airports are strategic assets that enable economic development. They are also competitive businesses that must remain financially viable, attract investment and long-term financing, and innovate to meet growing demand. 

Yet these two roles are not always reflected in aviation economic policies and regulatory frameworks. 

According to Airports Council International (ACI) World, global airports are expected to handle approximately 10 billion passenger movements in 2026. By 2050, this figure is projected to double, reaching approximately 20.7 billion. Accommodating this growth will require approximately USD 4.1 trillion in airport infrastructure investment by 2055. 

The challenge is not simply identifying where investment is needed, but ensuring airports can attract the capital required to deliver it. 

As governments and industry leaders gather in Montréal for ICAO’s Seventh Worldwide Air Transport Conference (ATConf/7), ACI is advancing three interconnected policy priorities: enabling airport infrastructure investment and long-term financing, strengthening the financial viability of small and regional airports, and advancing ICAO’s taxation policies. 

Airport financial sustainability is a prerequisite for infrastructure investment, connectivity and economic development.

Together, they reflect a fundamental principle: airport financial sustainability is a prerequisite for infrastructure investment, connectivity and economic development. 

What Airports Are Bringing to ATConf/7

Justin Erbacci, Director General of ACI World, explains what’s on the table, what airports want, and why it’s worth paying attention to.

Airport Infrastructure Investment: Beyond Capital Requirements 

Airport infrastructure is capital-intensive, with substantial upfront investment, long construction periods and extended payback horizons. 

ACI estimates that approximately USD3.77 trillion will be required to expand, modernize and rehabilitate existing airports, with another USD350 billion needed for new infrastructure. 

Yet capital does not flow simply because demand exists. 

Investors require confidence that airports can recover costs, earn reasonable returns and operate within stable, predictable and transparent regulatory frameworks. 

ICAO’s Policies on Charges for Airports and Air Navigation Services (Doc 9082) establish the principles of airport cost recovery, including depreciation, cost of capital, reasonable returns and pre-funding under specific conditions. 

The challenge lies in consistent implementation. 

Economic oversight should be transparent, effective and proportionate, safeguarding the public interest while enabling airports to invest and modernise. 

Commercial flexibility is equally important. Non-aeronautical revenues and appropriate regulatory approaches, including dual- and hybrid-till arrangements, strengthen incentives for commercial development and infrastructure investment. 

Progressive liberalisation of market access also supports connectivity, competition and traffic growth, improving the commercial viability of airport development. 

Investment and connectivity are mutually reinforcing. Infrastructure enables growth, while liberalisation strengthens the conditions needed to finance it. 

Small and Regional Airports: When Economic Value Exceeds Financial Returns 

Approximately 90% of airports worldwide handle five million passengers or fewer annually. Many provide essential connectivity to remote communities, island States and regions dependent on aviation for tourism, trade and essential services. 

Their economic and social benefits often exceed the revenues they generate. 

The challenge is structural. Airports face substantial fixed costs regardless of traffic volumes, while smaller airports cannot achieve the economies of scale available to larger facilities. 

More than 60% of airports handling fewer than one million passengers recorded net losses in 2024, rising to approximately 80% when non-operating income is excluded. 

Many are indispensable to regional development but financially unviable as stand-alone businesses. 

Airport networks offer one solution. By pooling management, procurement, financing and commercial activities, they generate economies of scale and enable cross-subsidization between larger and smaller airports. 

Approximately 55% of airports worldwide belong to airport networks, including 56% of small airports. 

Private-sector participation and blended financing provide complementary approaches, combining public funding with private capital and operational expertise. 

Essential connectivity cannot always be financed by airport revenues alone. Sustainable financing must reflect airports’ wider economic and social contributions and be integrated into national development and investment plans. 

Taxation: Funding Aviation or Burdening It? 

Taxation policies can either support or undermine aviation’s contribution to economic development. 

ICAO policies establish a clear distinction between taxes and charges. Airport charges recover the costs of providing infrastructure and services, whereas taxes generally generate government revenues. 

Confusing the two has significant consequences. 

Government-imposed aviation taxes can increase travel costs, suppress demand and weaken connectivity. ACI analysis indicates that for every US$1 collected through passenger-based aviation taxes, approximately US$2 in GDP may be foregone. 

ICAO’s Policies on Taxation in the Field of International Air Transport (Doc 8632) establish principles of fair, equitable, transparent and non-discriminatory taxation. 

Yet inconsistent implementation and policy fragmentation remain challenges. 

ACI proposes advancing ICAO’s taxation policies through an additional principle: revenues generated from aviation-specific government levies imposed on international air transport should be utilised for civil aviation purposes. 

This would better align taxation with aviation development, supporting infrastructure, safety, security and sustainability. 

Greater transparency and systematic monitoring of government levies would further strengthen evidence-based taxation policies. 

From Policy Principles to Investment and Capacity Development 

The three challenges are interconnected. 

Airports cannot attract long-term financing without predictable regulation and sustainable revenues. Small and regional airports cannot preserve essential connectivity without appropriate financing arrangements. And taxation policies should support, rather than constrain, aviation’s contribution to economic development. 

Much of the policy foundation already exists. 

ICAO Assembly Resolution A42-26 recognises the importance of enabling institutional and regulatory frameworks, diversified financing and a stable, predictable investment climate. 

The priority is to translate these principles into practical conditions that enable airports to invest, modernise and develop capacity to meet future demand. 

As ATConf/7 considers the future of international air transport, the question is not whether airport infrastructure investment is needed. 

It is whether governments will provide the economic and regulatory conditions that allow airports to remain financially sustainable, attract long-term investment and deliver the connectivity on which economies and communities depend.

It is whether governments will provide the economic and regulatory conditions that allow airports to remain financially sustainable, attract long-term investment and deliver the connectivity on which economies and communities depend. 

Editorial credit: K I Photography / Shutterstock.com