Maximizing Non-Aeronautical Revenues: Key to Airport Financial Sustainability

Introduction

Airports play a pivotal role in global connectivity and economic growth, relying on diversified revenue streams to sustain operations and fund infrastructure development. While aeronautical revenues remain a primary income source, airports increasingly focus on non-aeronautical revenues, which account for almost 40% of total airport revenues. Non-aeronautical revenues are a key component of airport financial strategies, enabling operators to reduce reliance on aeronautical charges while enhancing profitability and supporting infrastructure development and future capacity expansion. From retail and duty-free shopping to digital transformation in airport services, leveraging these opportunities is crucial for financial resilience and sustainable growth in an evolving aviation landscape.

Distribution of airport revenues by key source

The importance of non-aeronautical revenues

In 2023, total airport revenue reached $146 billion, marking a 21.4% increase from 2022. However, it remained 11.4% below pre-pandemic (2019) levels.

• Aeronautical revenues—predominantly generated from airline charges and passenger fees—totaled $79 billion, reflecting a 22% rise from 2022 but still 14% lower than in 2019.
• Non-aeronautical revenues, derived from commercial activities such as retail, dining, parking, and other services, reached $54 billion, up 21% from 2022 but still 17% below 2019 figures.

Airport revenues in both the aeronautical and non-aeronautical sectors show growth but remain below pre-pandemic levels. This gap highlights a key trend: while passenger traffic is rebounding, airport spending behavior has not fully recovered.

Despite being a major income source, aeronautical revenues alone are not enough to sustain airport operations. Airports are increasingly prioritizing non-aeronautical revenue streams, which accounted for 36.7% of total airport revenues in 2023.

How size and region impact non-aeronautical revenue

Non-aeronautical revenue distribution varies significantly across regions and airport sizes.

Regional breakdown:

• Leading regions: The Middle East (47%), Asia-Pacific (43%), and Europe (39%) generate the highest share of non-aeronautical revenues.
• North America (33%), Africa (26%), and Latin America-Caribbean (26%) report lower shares, highlighting regional differences in commercial opportunities.

Impact of airport size:

• Larger airports (15–25 million passengers) see peak non-aeronautical revenue at 39%, benefiting from high passenger volumes and robust commercial activity.
• Smaller airports (<1 million passengers) have the lowest share (23%), reflecting fewer commercial offerings and lower passenger spending power.

As airports strive to maximize financial resilience, understanding these variations helps operators optimize retail strategies, parking services, and real estate development.

Passenger traffic recovery vs airport revenue recovery

Passenger traffic recovery does not equal airport revenue recovery, especially for non-aeronautical revenue.

While passenger traffic in 2023 was only 5% below 2019 levels, total airport revenues in real terms were still down 11%, with aeronautical revenue falling 14% and non-aeronautical revenue declining 17%.

This disparity highlights a critical issue: although people are flying again, they are not spending at the same levels as before.

A combination of factors is at play, including changing consumer habits, economic uncertainty, and competition from external retail alternatives. The decline in travel retail spending suggests that now it is even more important for airports to innovate and create engaging retail and service experiences that encourage spending.

Traffic recovery vs airport revenue recovery, 2023 vs 2019 (world, real terms)

Despite airport revenues relying heavily on passenger traffic, passenger traffic recovery does not equate to overall revenue recovery, with non-aeronautical revenues lagging more significantly.

Shifts in non-aeronautical revenue composition

Non-aeronautical revenue comes from various sources, and its composition of has evolved significantly since 2019.In 2019, retail concessions accounted for 27% of non-aeronautical revenue, but by 2023, this share had dropped to 20%. In contrast, car parking revenue increased from 21% to 24%. Notably, the growth in car parking revenue share was primarily influenced by North America, while retail remains the dominant source of non-aeronautical revenue in most other regions.

Other categories experienced a mixed recovery in 2023 compared to 2019. Real estate revenue grew by 7%, food and beverage by 8%, and car parking by 18%, while duty-free concessions fell by 34%, advertising by 23%, and retail concessions by 18%.

The shift in non-aeronautical revenue priorities reflects evolving passenger spending habits and underscores the need for airports to rethink their commercial strategies.

Continued decline in non-aeronautical yields

Despite overall airport revenue growth, non-aeronautical revenue per passenger has been in decline since 2016, with a compound annual growth rate (CAGR) of -2.3%. The compound annual growth rate of non-aeronautical revenue per passenger in real terms from 2015 to 2023 was -4.75%.This suggests that airports are making less money from each traveller, highlighting the need for new revenue models and a stronger focus on passenger engagement.

Trends in global non-aero revenues per passenger

Accounting for non-aeronautical revenues and economic oversight models

The financial structure of airports is shaped by how non-aeronautical revenues are integrated into airport charges and regulatory frameworks. Depending on how these revenues are treated, cost basis for airport charges falls under three types of regimes: single till, dual till, and hybrid till, each aligning with different models of economic oversight.

Single till: Non-aeronautical revenues subsidize aeronautical charges, reducing costs for airlines but limiting commercial incentives for airports.

Dual till: Aeronautical and non-aeronautical revenues are accounted for separately, encouraging cost efficiencies and commercial investment.

Hybrid till: A blend of the two, allowing partial cross-subsidization while ensuring maintaining incentives for non-aeronautical development.

Dual till vs. single till: the impact on airport charges and non-aeronautical revenues

The dual till approach separates non-aeronautical and aeronautical cost structures when establishing airport charges for users of infrastructure. This approach tends to generate greater cost efficiencies encourages commercial development and innovation in non-aeronautical revenue streams such as retail, parking, and real estate.

In contrast, the single till accounting method stems from a long-standing convention to support aircraft operators at the expense of infrastructure providers. Essentially, the net proceeds from non-aeronautical revenues are used to offset or lower aeronautical charges. This method introduces inefficiencies for both airport operators and their airline customers.

Dual and hybrid till regimes induce cost efficiencies and innovations on the commercial side of the airport business.

The global trend in dual and hybrid till 2023

The way forward: maximizing non-aeronautical growth

To strengthen revenue streams, airports are leveraging digital transformation to enable seamless transactions, personalized marketing, and operational efficiencies. Additionally, airports are expanding commercial activities into on-arrival duty-free sales, landside developments, and hospitality services, increasing financial resilience.

Key strategies include:

• Expanding real estate development: Airports can capitalize on unused land by developing logistics hubs, eVTOL/AAM/UAS facilities (vertiports), and hospitality ventures. These initiatives transform airports into thriving commercial ecosystems beyond aviation.
• Embracing hybrid formats: Retail-integrated F&B spaces and curated street food markets introduce new revenue streams while enhancing the airport’s cultural and culinary appeal. These hybrid models create dynamic, experience-driven environments that attract both travelers and non-traveling visitors.
• Enhancing passenger experience and customer-centricity: Digital payments, hyper-personalized retail offerings, and premium lounges create a seamless and engaging passenger journey, encouraging higher spending and brand loyalty.
• Developing immersive entertainment: Airports can increase passenger dwell time and engagement through interactive brand activations, cultural exhibits, and entertainment zones. These experiences transform terminals into lifestyle hubs rather than mere transit points.
• Leveraging data and technology: AI-driven pricing strategies, targeted marketing, and mobile commerce solutions enhance revenue optimization and create frictionless, data-driven shopping experiences.
• Implementing light-handed regulatory frameworks and dual and hybrid till models: Light-handed, consistent, and transparent economic oversight fosters investment and revenue diversification, while dual and hybrid till models incentivize financial efficiency, innovation, and investment in commercial activities.
• Strengthening Public-Private Partnerships (PPPs): Collaborations with private investors unlock funding for infrastructure projects and open new commercial opportunities, ensuring sustained financial growth.
• Sustainability-linked initiatives: Implementing eco-friendly retail concepts, energy-efficient airport hotels, and carbon offset programs aligns commercial activities with global sustainability goals, appealing to environmentally conscious travelers.

Conclusion

Non-aeronautical revenues are an essential pillar of airport financial sustainability, significantly contributing to infrastructure development, enhanced passenger services, and strengthened operational resilience. As evolving consumer expectations and technological advancements reshape the travel experience, airports that strategically maximize commercial opportunities—while adopting flexible regulatory frameworks and innovative financial models—will secure long-term financial stability and reinforce their role as dynamic economic engines in the broader aviation ecosystem.

ACI members (airports or World Business Partners) interested in joining ACI World ANARA* – the unique global platform for non-aeronautical revenues and activities – please contact the author at vcheglatonyev@aci.aero

*ANARA is Airport Non-Aeronautical Revenues and Activities Sub-Committee of ACI World Economic Standing Committee (WESC)