MOUNTAIN VIEW, Calif., April 22, 2015 /PRNewswire/ -- Airports have traditionally been dependent on passenger traffic and airlines for revenues. As customer expectations change and airline operators struggle to sustain profits, airports are diversifying their sources of income to include non-aeronautical avenues, such as duty free shops and lounges.
New analysis from Frost & Sullivan, Analysis of the Global Airport Industry, reveals that in the United States alone, the proportion of non-aeronautical revenues accounted for 44.8 percent of the total airport revenues in 2012. The trend is similar in developing countries too. While aeronautical revenues in China's Guangzhou airport grew 8.7 percent, non-aeronautical revenue grew 28.2 percent in 2012.
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Safety concerns along with government regulations and interference often close viable growth opportunities in the airport industry. Airports need to manage critical resources, such as air space and runways, while complying with government regulations and simultaneously increasing profits.
"To achieve this balance, airports are investing heavily in optimizing revenue per visitor," said Frost & Sullivan Industry Analyst Renganathan Krishnamurthy. "Providing parking facilities, conference rooms, and boarding and lodging facilities opens up new opportunities for income generation."
Further, airports are improving cargo traffic. By building specialized cargo facilities, expanding technologies and hiring personnel to reduce overall handling time, air cargo can be made an attractive proposition for time-constrained businesses.
Apart from an increased focus on non-aeronautical revenue, governments and airports are constructing airport cities to boost overall business in the surrounding regions. An aerotropolis or airport city is an urban planning and development concept in which an entire town or city's business revolves around an airport and its related activities.
"This centerpiece approach is expected to significantly drive revenues for airports," observed Krishnamurthy. "However, airport cities are long-term strategies. It will require the consensus of a host of stakeholders along with effective planning and execution to make the concept commercially viable on a global scale."
Analysis of the Global Airport Industry is part of the Business and Financial Services (http://www.financialservices.frost.com) subscription. Frost & Sullivan's related studies include: Global Civil Helicopters Market, Commercial Aircraft Fuel Systems Market, Optionally Piloted Helicopters and Global Airport IT Market. All studies included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Analysis of the Global Airport Industry
SOURCE Frost & Sullivan