A340pilot From Canada, joined Sep 2003, 576 posts, RR: 0 Posted (11 years 5 months 3 weeks 5 days 18 hours ago) and read 1520 times:
I have always wondered about how airports make there money? How much does it cost for a 747 to land or take off? Do they rent the walkways and ports? Or do they pay one lump sum per year? and how do they price the landings according to aircraft size! I know that they make money renting out retail stores in the airports, as well as parking..............
Tom in NO From United States of America, joined Nov 1999, 7194 posts, RR: 32
Reply 1, posted (11 years 5 months 3 weeks 5 days 18 hours ago) and read 1493 times:
Airports derive their revenues from a number of sources:
1) landing fees
2) space rental fees from airlines (gates, offices, ticket counter, baggage claim and makeup)
3) concessionaires (minimum amount, plus a percentage of revenues, as well as space)
4) parking lots (if self-operated, all revenues come straight to the airport; if operated under a contract, airport takes minimum amount, plus a percentage)
5) taxis, limos, off airport shuttles (yearly fee)
6) PFC's (used only for capital consruction projects, or possibly for bonds)
7) rental car agencies
8) game room (video games)
10) aircraft parking
11) fuel flowage fees from fueling companies
12) FBO's: space, fuel flowage
13) hangar rentals
14) interest income from bonds, PFC's, etc
Now, how do airports create their yearly budgets?
Refering to the list of revenue sources I detailed above.
The airport derives its anticipated expenses for the year being budgeted. These expenses include, but not limited to:
1) operation and maintenance (very wide ranging)
2) capital improvements (can be exceedingly variable)
4) debt service on bonds
5) depreciation of facilities
Those expenses are then totalled up. Then we do the anticipated revenue side. We figure out all anticipated revenues listed in my previous post EXCEPT landing fees. That amount is then totalled up, and the remaining difference between anticipated revenues and expenses is made up via the landing fee.
Now, depending on if the airport winds up with a surplus or a deficit, that amount will be made up (either as a credit to the tenant/airline, or as an extra charge the following year).
We can get really technical by getting into different types of rate making methodologies, such as compensatory, or residual, etc. but that's another topic.
I hope that helps with your understanding of how airports make their money. Sometimes it not as easy as "1, 2, 3" to increase revenues. It is a process.
Hope this helps. Let me know if you have other questions.
Tom at MSY
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
PVD757 From United States of America, joined Aug 2003, 3430 posts, RR: 16
Reply 6, posted (11 years 5 months 3 weeks 5 days 1 hour ago) and read 1311 times:
Our airport has a way of breaking down the landing fees per tenant. since we primarily have RJs up to 757s, the wieghts can be considered pretty standard. We have long term contracts in place with the major carriers. They get the preferential term of "signatory" placed on them where their ops go into a pool. If the landing fee pool is determined to be for example $10 million, they divide this amount by the ops performed by each airline. If WN has 10,000 flts a year(I wish), they would pay whatever percentage that those flights represent of the total ops. If the carrier is non-signatory, they pay landing fees, a differnet overnight parking fee, and a user fee for the terminal. Most of this applies to charters, but I have seen carriers like HP, or old TWA before they went under, drop in a diversion. They would pay full price because they have no scheduled service to PVD. The signatory status is also tied to long-term leases and other service agreements.