The Commercial Performance of Global Airports

17 Pages Posted: 28 Nov 2014 Last revised: 3 Dec 2014

See all articles by Franz Fuerst

Franz Fuerst

University of Cambridge - Department of Land Economy; University of Melbourne; City University of New York - Center for Urban Research

Sven Gross

University of Applied Studies and Research Harz

Date Written: November 28, 2014

Abstract

Non-aeronautical business has been a key sector for airports seeking to improve their viability. This study analyzes the commercial performance of 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, where the share of international passengers, financial risk and airport size are found to be significant determinants. The latter finding indicates the presence of economies of scale in generating higher commercial revenue and ensuring profitability for an airport's non-aeronautical operations. No empirical support is found for the hypothesis that privatization or state ownership of an airport and/or the national income per capita are significant factors of an airport's financial performance. Regarding the retail mix, a higher share of food and beverage outlets is found to affect the level of the commercial yield negatively while a higher percentage of outlets located airside tends to result in higher commercial yields.

Keywords: commercial revenues, non-aeronautical airport income, airports finances

JEL Classification: L93, R04, M21

Suggested Citation

Fuerst, Franz and Gross, Sven, The Commercial Performance of Global Airports (November 28, 2014). Available at SSRN: https://ssrn.com/abstract=2531651 or http://dx.doi.org/10.2139/ssrn.2531651

Franz Fuerst (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

HOME PAGE: http://www.landecon.cam.ac.uk/directory/dr-franz-fuerst

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

City University of New York - Center for Urban Research

CUNY The Graduate Center
New York, NY 10011
United States

Sven Gross

University of Applied Studies and Research Harz ( email )

Wernigerode, 38855
Germany
0049/3943/659279 (Phone)

HOME PAGE: http://www.tourismusundverkehr.de/

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