WHAT DO YOU KNOW ABOUT NON-AVIATION BUSINESSES IN AIRPORTS?
IF THE FIRST THING YOU THINK OF IS THE PRICE OF A COFFEE AT THE AIRPORT, YOU’RE THINKING THE RIGHT WAY. THE COMMERCIAL ACTIVITES IN AIRPORTS ARE COMPLETELY SEPARATE FROM THE OTHERS AND ARE INTERESTING BECAUSE, AS THEY’RE RELATIVELY NEW TO KAZAKHSTAN, THEY LOOK SET TO GROW IN THE FUTURE. READ MORE IN THE ARTICLE BELOW.
It’s widely known that the main (aviation) airport activity includes the maintenance of runways, air navigation services, security, passenger service, handling of cargo, aircraft maintenance, etc. It’s about everything that ensures safe and precise arrivals and departures of passengers and cargo. It is what’s reflected in your flight ticket under the “Airport Fees” section..
However, airports are also involved in non-aviation activity which is the primary item of income for most of the world’s airports. According to the estimates of foreign specialists, such income on average is about 15-20% of an airport revenue profile while in some cases it may even reach 30-40%. The profit from such an activity may be around 60-70% of the total airport profit.
In Kazakhstan this rate is considerably lower. This is largely owing to the fact that non-aviation incomes didn’t use to be of proper importance in our country for a long period of time. Still, it should be noted that the airports of the two main Kazakh cities, Astana and Almaty, have all the conditions and considerable potential to achieve significant successes in this sphere.
So what is a non-aviation activity?
Non-aviation activity is a non-core commercial activity of airports which allows improvement of the service quality and earning of additional income. It includes the following:
- Lease of premises, land or equipment belonging to the airport(for example, check-in desks, booking offices or administration
- Restaurants, bars, cafes and delivery of flight catering;
- Duty-free shops;
- Concessions to supply aviation fuel and lubricants – the right for selling or distributing aviation fuel and lubricants at the airport;
- Car parks;
Other concessions and other airport business (car renting bank operation fees, currency exchange fees, entry fees for areas of special interest, such as viewing points of the terminal).
For instance, below is an average revenue profile of European airports.
The modern tendencies show that airports are becoming the centers of commercial activity attracting many businesses from various spheres of economics. Airports use all their facilities to develop non-aviation activity including internal and external areas of terminals.
To understand better which airport services are in the highest demand and who are the service consumers, please see the following table:
Lately the topic of non-aviation income has been further developed in the “aerotropolis” concept that was put forth by John Kasarda, the professor of the University of North Carolina. According to him, the modern airports have a high potential to turn into real mini- cities, so called “aerotropolises”. The concept makes a reference to the experience of the past centuries when seaports and railway stations used to grow into large settlements and business centers. “Aerotropolis” is something the largest world airports are turning into by being the centers that accumulate business parks, logistic and industrial clusters, industrial territories, junction stations and terminals, shopping arcades, technology, information and communication centers while becoming the core of the whole network.
As we can see, our airports have enough room for improvement. By the way, there are already some examples of “aerotropoli” in the world. They are Las Colinas in Texas, Zuidas in Amsterdam, Songdo International Business District in South Korea and Panatropolis in Panama. Read about one of these remarkable examples of airport cities in the next issue of Sky Magazine.