Exclusive extracts from this 98-page-long report:
- What is the business?
Airports generate two different revenue streams: aeronautical revenues and non-aeronautical revenues. Airport operators derive the bulk of their aeronautical revenue from lease agreements with passenger and cargo airlines, which pay aircraft landing and parking charges, and passenger fees. These revenues are used to determine the cost per enplaned passenger (CPE), a key indicator of the airport industry's financial performance.
- What are the main markets?
Demographics, more liberalised aviation markets and strengthening economic fundamentals have driven considerable growth in emerging market air traffic. Most of the world's fastest growing airports are to be found in emerging markets, with the majority in the Asia-Pacific region.
- Who are the key players?
The hub competition battleground is no longer limited to Europe and North America. Several airports in emerging markets, particularly in Gulf countries and Asia, have been challenging incumbents on specific traffic flows. This has two main implications: first, it heightens rivalry among large European airports seeking to serve as spokes for these emerging hubs; and second, it weakens air traffic at incumbent European hubs (Frankfurt, London, Paris).
- How intense is competition?
The level of competitive rivalry varies considerably between major and small airports. Major airports, such as those analysed in this report, mainly operate at full capacity, most generate high margins and many enjoy geographical exclusivity for the city and region they serve. Those that belong to airport networks also benefit from economies of scope and scale that allow efficiencies in terms of costs and charges.