The Commercial Performance of Global Airports
17 Pages Posted: 28 Nov 2014 Last revised: 3 Dec 2014
Date Written: November 28, 2014
Abstract
Non-aeronautical business has been a key sector for airports seeking to improve their viability. This study analyzes the commercial performance of airports using a panel dataset of 75 airports in 30 countries. Applying pooled OLS, random effects and 3SLS estimation frameworks, we identify the main drivers of financial performance. Our results are in line with the existing literature, where the share of international passengers, financial risk and airport size are found to be significant determinants. The latter finding indicates the presence of economies of scale in generating higher commercial revenue and ensuring profitability for an airport's non-aeronautical operations. No empirical support is found for the hypothesis that privatization or state ownership of an airport and/or the national income per capita are significant factors of an airport's financial performance. Regarding the retail mix, a higher share of food and beverage outlets is found to affect the level of the commercial yield negatively while a higher percentage of outlets located airside tends to result in higher commercial yields.
Keywords: commercial revenues, non-aeronautical airport income, airports finances
JEL Classification: L93, R04, M21
Suggested Citation: Suggested Citation