a340pilot
Posts: 554
Joined: Mon Sep 01, 2003 10:22 am

Airports Makin' The $$$

Sat Oct 04, 2003 5:09 am

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?  Confused 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..............

Best regards,
a340pilot


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Tom in NO
Posts: 6725
Joined: Thu Nov 11, 1999 10:10 am

RE: Airports Makin' The $$$

Sat Oct 04, 2003 5:27 am

REVENUES:

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)
9) advertising
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

BUDGETS:

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)
3) payroll
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
 
BA
Posts: 10133
Joined: Fri May 19, 2000 11:06 am

RE: Airports Makin' The $$$

Sat Oct 04, 2003 5:30 am

Here are the airport fee charges for Beirut International Airport (BEY):

http://www.beirutairport.gov.lb/airport/parking/parking.htm

You should find the above link interesting and should give you an idea of how airports generate money.
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
a340pilot
Posts: 554
Joined: Mon Sep 01, 2003 10:22 am

RE: Airports Makin' The $$$

Sat Oct 04, 2003 5:34 am

thanks for the link, but w/o going into a conversion mode what is the U.S. conversion for <6000 Lebanese pounds per 1000 kg or part thereof.......>
 Big grin


Best reguards,
a340pilot
Go! Canucks Go!
 
Tom in NO
Posts: 6725
Joined: Thu Nov 11, 1999 10:10 am

RE: Airports Makin' The $$$

Sat Oct 04, 2003 6:06 am

Landing fees in the US are based upon 1,000 pound increments. Basically, you pay a certain amount per 1,000 pounds of the maximum aircraft landing weight.

Examples:
1) If an airport charges $1.00 per 1,000 pounds, and a 747-400 has a max landing weight of 630,000 pounds, the landing fee would be $630.

2) a 737-700 has a max landing weight of 128,000 pounds, so the landing fee for him would be $128 (with the $1/1,000 lbs).

Landing fees vary widely from airport to airport, depending on other revenue streams.

As for jetways, airlines usually provide their own. MSY owns about 5 jetways, and we include them in other rental fees.

Tom at MSY
"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
 
BA
Posts: 10133
Joined: Fri May 19, 2000 11:06 am

RE: Airports Makin' The $$$

Sat Oct 04, 2003 6:59 am

A340pilot,

1500 Lebanese Pounds (also called Lebanese Lira) = $1 US Dollar

0.45 Kilograms = 1 Pound

So you should get an idea from that.

Landing fees in Beirut are pretty cheap.

Regards
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
PVD757
Posts: 3021
Joined: Sun Aug 24, 2003 8:23 pm

RE: Airports Makin' The $$$

Sat Oct 04, 2003 10:34 pm

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.

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