Airport Revenue Diversification (2010) / Chapter Skim
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Pages 5-15
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From page 5... ...
For those general aviation airports that served corporate aviation activity levels remained stable or prospered, whereas many of the smallest general aviation airports have faced declining demand for recreational flying. In summary, for the period following deregulation, most commercial service airports experienced expansion of aeroCHAPTER TWO AIRPORT BUSINESS AND REVENUES
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From page 6... ...
6Un its S hi pp ed b y U
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Funding Sources for Capital Projects Federal grants through the AIP have played a central role in building commercial service and general aviation airports and in defining what activities take place on airports. For the smallest hub airports, AIP grants can fund almost 60% of capital projects; for large and medium hubs, AIP funding is proportionally much smaller, and passenger facility charges much greater.
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From page 8... ...
For larger airports, revenue bonds account for another 30% and state and local funds the remaining 20%. Funding Sources for Operations Although federal funds and passenger facility charges contribute heavily to capital projects, as Figure 8 shows operations and maintenance at the largest airports are funded by airport users.
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Airport sponsors must agree to grant assurances if they accept federal grants or surplus property. None of the assurances prohibit either land development or use of airport revenue for non-aeronautical purposes, but they do guide and establish certain limitations.
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From page 10... ...
The FAA requires commercial service airports to file annual financial reports when an airport receives AIP funds (and signs grant assurances)
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From page 11... ...
Large hub airports generate 68% of aeronautical and non-aeronautical revenue; medium hubs, 19%; small hubs, 8%; and nonhubs, 4%. General aviation airports receiving federal grants are not required to file Form 5100-127 and thus there is far less information about operating revenues at general aviation airports.
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From page 12... ...
. Trends In the last ten years, total airport operating revenues have been growing.
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From page 13... ...
Relative shares of operating revenues have remained fairly constant, with large hub airports reporting 68% of operating revenue; medium hubs, 19%; small hubs, 8%; and non-hubs, 4%. At this highly aggregated level, the share of operating revenue that is nonaeronautical actually declined slightly from 50% in 1998 to 47% in 2008.
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From page 14... ...
. Part 2 of this report addresses how airports incorporate revenue diversification in their planning processes and implement the strategies through partnerships, private contracts, and incentive packages, and Part 3 presents a wide range of revenue diversification ideas that have been tried at commercial service and general aviation airports.
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From page 15... ...
15 FIGURE 17 Non-aeronautical business units. Source: Adapted by KRAMER aerotek inc., from SH&E (2009)
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