The Airport Business

The Airport Business

The Airport Business

The Airport Business


Starting from the premise that airports can be run as commercial successes, The Airport Businessaims to place the business as a whole within a conceptual framework. The author examines the major issues facing airports throughout the world, and offers an insight into how to deal with the major economic and financial difficulties that are likely to arise in the next decade.


The airport business is taking off. During the last twenty-five years the airport industry has been transformed from being a branch of government into a dynamic and commercially oriented business. the change has come about as the close ties between governments and airports have been progressively loosened. At the same time airport managers in many countries have been given greater freedom to operate commercially in order to produce profits or at least to reduce their deficits. Yet there has been much uncertainty as to how such commercial freedom might be used. in most countries, up to the mid- or late 1970s, airports had been thought of as little more than an insignificant arm of government and little attention had been paid to them. As the pressure to become commercially oriented grew, so it became increasingly apparent that little was known about airport economics or the airport business. Independent airport managers had no body of public knowledge or economic theory to call on to aid them in turning subsidized airports into profitable companies.

Numerous articles and conference papers have appeared in recent years dealing with particular aspects of airport management. But there has been no coherent attempt to place the airport business as a whole within a conceptual framework. That is the prime aim of the present book. It starts with the premise that airports, the larger ones at least, can be operated as successful businesses. Whatever their form of ownership, they should be able to at least cover their full costs, including capital charges, from their revenues. If they set out to do so, they should also be able to generate substantial profits.

The focus of the book is the economic and financial aspects of the airport business. It is concerned with providing a sound understanding of the economics of that business placing particular emphasis on revenue generation from both aeronautical and commercial activities. Airport managers face a unique problem. They must plan and undertake huge capital investments in large and immovable assets, which have no alternative use, to satisfy a demand over which they have little control. It is the airlines and not the airports who decide where and how the demand for air transport will be met. Maximizing revenue generation in such a situation is a particularly demanding task.

The book starts with an overview of the airport business identifying what

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