INTERNATIONAL. Non-aeronautical revenues accounted for 46.5% of airports’ income worldwide in 2010, according to the latest Airport Economics Survey released by Airports Council International (ACI). The report underlines the key role that commercial and non-aviation revenues increasingly play in driving airport revenues.
ACI calculated worldwide total airport income in 2010 (2011 figures are not yet available) to have reached US$101.8 billion, up by around +7% compared to 2009, which was broadly in line with industry growth.
ACI World Director General Angela Gittens said: “Non-aeronautical revenues are a vital component in the economics of airports. During the downturn the diversification of airport revenues cushioned the impact of lower passenger and freight volumes and safeguarded operating profits. Non-aeronautical revenues critically determine the financial viability of an airport as they tend to generate higher profit margins than aeronautical activities, the latter frequently representing a zero sum game or producing a deficit.”
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Angela Gittens: The ACI chief underlines the vital role played by non-aeronautical incomes at airports |
Each year, ACI World collects key economic information from its members worldwide to produce valuable industry data and analysis concerning the financial performance of airports in Africa, Asia Pacific, Europe, Latin America, Middle East, and North America.
The 16th edition of the ACI Airport Economics Survey presents data and analysis relative to airport operations for the financial year 2010/2011, based on ACI member input through a survey conducted in Q2 and Q3 of 2011. The survey generated responses from 604 airports that together handled 3.12 billion passengers or about 62% of worldwide traffic in 2010.
Gittens said: “As background on the financial results in 2010, as always, it is important to consider the traffic trends during the reporting period. Powered by a strong rebound in the global economy, the first half of 2010 was characterised by a major recovery in the global air cargo sector, more than compensating for the significant declines in the previous year. Passenger growth rates were robust and stable at an elevated level only temporarily dented by the ash cloud phenomenon in April 2010. Aircraft movement growth however was moderate pointing to higher aircraft utilization and nimble capacity management and expansion on the part of the airlines.”
Aeronautical revenue from passenger and airline user charges accounted for 53.5% of industry-wide income, a similar proportion to 2009.
Airports worldwide in 2010 incurred operating expenses in the amount of US$56 billion or 55% of revenues. The largest expense item reported was personnel cost, accounting for 36% of operating expenses, followed by contracted services (outsourcing cost to third parties) as the second biggest cost item at 19% of total operating cost.
Capital expenditure at airports worldwide in 2010 was almost a third lower than previously predicted, with US$26 billion were spent on airport upgrades or expansions of existing airport infrastructure. For 2011, capital expenditure was expected to rise by 14% to US$29 billion.
ACI said: “The markedly reduced capital expenditure is clearly a consequence of the global financial crisis which led many airports to scrap or cut down on capital programmes. Also, the crisis entailed tighter credit markets, lower commodity costs and more competitive bids that made financing harder to obtain or made construction cheaper, both putting pressure on expenditure.”
The financial performance of the global airport industry in 2011 is expected to have “continued its growth trend”, said ACI. Passenger traffic growth will remain above +4% for the year with the more profitable international traffic growing by around +6%.
ACI noted: “Looking to 2012 while there is a lot of uncertainty in financial markets as to whether governments will be able to contain the sovereign debt crisis in Europe, the consumer seems to be rather unfazed. Consumer confidence is resilient and spending is still growing year on year as the current crisis has not been adding to unemployment yet.
“Therefore, the prognosis is that another year of growth lies ahead of the industry. Growth rates may be smaller, especially in the first half of the year, but overall airports should be in a good spot to grow revenues further. As far as the individual regions are concerned, the significant spreads in growth rates among the regions will homogenize further as economic growth in China and Brazil cools and the continuing political uncertainty in North Africa will continue to limit its growth opportunities. That being said, Asia Pacific will remain the fastest growing region followed by Latin America, whereas North America and Europe will be rather muted.”
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