The Commercial Performance of Global Airports

Revenues from non-aeronautical business have received increasing attention from airports seeking to enhance their profitability. This study analyzes the commercial performance of global airports using a panel dataset of 75 airports in 30 countries. Applying pooled OLS, random effects and 3SLS estimation frameworks, we identify the main drivers of financial performance. Our results are in line with the existing literature. The share of international passengers, the size of the commercial area as well as airport size and the mix and intra-terminal location of retail space are found to be significant determinants. The latter finding suggests the presence of economies of scale in generating higher commercial revenue and ensuring profitability for an airport's non-aeronautical operations. Staterun and partially privatized airports appear to retain a significantly smaller share of concession sales than their privatized counterparts. Regarding the retail mix, a higher share of food and beverage outlets appears to increase the revenue share retained by the airport while a higher percentage of outlets located airside rather than landside depresses commercial revenues.