Aviation is a constantly changing industry, this means that airports and airlines need to be extremely innovative and constantly improving their service offering to remain profitable.
It is well accepted in the industry that downward pressure on aeronautical revenues is going to continue for regional airports, as Europe’s airlines continue to seek ways to reduce their own operating costs, so there needs to be a fresh approach to commercial revenue streams for regional airports.
Old Airport Revenue Model
The old revenue model for airports is for aeronautical income to be the main financial income. Due to the continuous downward pressure from airlines on this revenue stream a change in airport strategy is needed.
Many regional airports continue to rely on aeronautical fees to maintain financial stability, so it is no surprise that 43% of all airports in Europe are loss making.
Advertising, Parking and Concessions
A large part of an airports revenue but not the main stream.
This was the smallest part of the mix with airports generating a part of their revenue through alternative streams.
New Airport Revenue Model
The new airport Revenue model turns the old one upside down. With aeronautical revenues no longer being the base of any financial plan for a profitable airport it is time to start thinking outside the box.
The traditional revenue source like advertising, concessions and parking still play an important role in any airport’s revenue model, but the other new sources are what will really count.
New strategies and new ways are what is needed for any airport to be profitable. These are just some of the ways in which regional airports can start to think outside the box:
Advertising is one of the traditional revenue streams for airports, but is your airport maximising all of the space available at the critical places in your airport? When did you last review existing advertising contracts? Review all businesses in the local area and find innovative ways for them to advertise at your airport.
Renewable Energy Solutions
The rising cost of fossil fuels will continue to impact an airport’s financial performance. Airports are already intensive users of energy and finding long term renewable solutions will not only reduce the airport’s carbon footprint, but also has the potential to reduce energy costs significantly.
Use the Airport
Think of the airport as more than just a place for passengers to arrive and depart from. Use the location for hosting seminars and conferences, host children’s parties, organise educational tours. Continue to think outside the box!
How we can help
IC Aviation are experts in increasing airport revenues. With innovative route development planning and increased commercial awareness, we have helped numerous airports throughout Europe increase their route network and improve profitability. Contact us today to find out how IC Aviation can help your business gain more revenue.