AI Impact on Airport Non-Aeronautical Revenue Market growth, set to increase by USD 43.09 billion from 2024-2028, Evolving sophisticated airport terminals to boost the revenue, Technavio

NEW YORK, Aug. 22, 2024 /PRNewswire/ — The global airport non-aeronautical revenue market  size is estimated to grow by USD 43.09 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  8.84%  during the forecast period. Evolving sophisticated airport terminals is driving market growth, with a trend towards progression of airport cities and aerotropolis concepts. However, cost-intensive market penetration  poses a challenge. Key market players include Aena S.M.E. SA, Aeroports de Paris SA, Airport Authority Hong Kong, Airports Authority of India, Airports of Thailand Public Co.,Ltd., Brazilian Airport Infrastructure Co., Changi Airport Group Singapore Pte. Ltd., Copenhagen Airports AS, Fraport Group, GMR Infrastructure Ltd., Guangzhou Baiyun International Airport, Heathrow SP Ltd., Japan Airport Terminal Co. Ltd., Korea Airports Corp., Malaysia Airports Holdings Berhad, Metropolitan Airports Commission, Oman Airports, Royal Schiphol Group, The Port Authority of New York and New Jersey, and Vinci.

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Key Market Trends Fueling Growth

Airports have transformed from simple transport facilities into commercial business hubs, known as airport cities or aerotropolises. This shift is driven by the gradual adoption of airport city strategies and the expansion of urban economic zones around airports. Key contributors to this transition include passenger terminal commercial activities, particularly airside offerings such as galleries and retail outlets. Airport growth relies on the availability of land for facility expansion and enhanced surface transportation, making commuting more convenient. Modern airport cities offer a range of commercial functions, including shopping malls and restaurants, within their boundaries. 

Airports are no longer just places for boarding flights. They’re becoming retail and dining hubs, offering a wide range of non-aeronautical revenue opportunities. Rental services, contactless payment methods, and digital advertising are on the rise. Passenger flow and cargo operations are being optimized with advanced technologies and partnerships with major airports and retail operators. Healthcare services and premium lounges provide enhanced passenger experiences. Digitization and passenger engagement are key trends, with mobile apps offering personalized shopping recommendations, dining experiences, and contactless payment solutions. Virtual shopping experiences allow passengers to pre-order meals and non-aeronautical products for pick-up at the airport. Leading players in the industry are integrating technology to create memorable and convenient experiences, even during economic downturns and global uncertainties. E-commerce platforms and luxury brands are partnering with airports to meet changing consumer preferences for high-quality retail and seamless journeys. The future of airport revenue is all about creating an enjoyable journey, from pre-ordering meals to integrated shopping experiences. 

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Market Challenges

• Airport non-aeronautical revenue, particularly from sleeping pods, is experiencing growth due to increasing passenger traffic and investments. However, several challenges limit the market’s expansion. Domestic or regional airports, which primarily serve arrival and departure functions, have limited concessionaires and small terminal spaces, reducing the demand for sleeping pods. Additionally, airports offer lounges and other rest areas, providing more privacy for passengers. Public organizations are investing in no-frills airports in tier-II and tier-III cities, which have minimal terminal space and do not require sleeping pods. Moreover, sleeping pods can be cost-prohibitive for budget travelers, with prices ranging from USD15 to USD20 per hour. Long-haul passengers, who require extended sleep due to exhaustion and time zone changes, may find hiring sleeping pods expensive. Business-class passengers, who are often top-tier members of airline loyalty programs, receive complimentary lounge access, reducing the need for sleeping pods. Some airports offer alternative seating options, such as deck chairs, that allow passengers to lie down, reducing the demand for sleeping pods.
• Airports generate significant revenue beyond aviation operations, known as non-aeronautical revenue. This income comes from various sources like ground support equipment, power systems, baggage handling systems, security systems, water service vehicles, and car rentals. Air travelers and air passengers utilize these services and facilities, including restaurants, catering services, duty-free shops, luxury goods, electronics, souvenirs, cafes, advertising spaces, marketing campaigns, promotions, car parking facilities, short-term parking, long-term parking, conference centers, hotels, office complexes, amenities, and passenger experience enhancements. Passenger satisfaction is crucial in attracting footfall and revenue. Airport infrastructure and commercial activities offer high-quality amenities, dining, entertainment options, and digital advertising technologies to travelers and advertisers. Aviation-related income comes from passenger numbers at airports worldwide, making non-aeronautical revenue a vital aspect of airport business success.

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Segment Overview 

This airport non-aeronautical revenue market report extensively covers market segmentation by

1. Service 

• 1.1 Concessionaries
• 1.2 Parking and car rentals
• 1.3 Land rentals
• 1.4 Terminal rent by airlines
• 1.5 Other services

• 2.1 Commercial development
• 2.2 Advertising

• 3.1 APAC
• 3.2 North America
• 3.3 Europe
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Concessionaries-  Airports are expanding and upgrading their retail offerings to capitalize on increasing passenger traffic and generate non-aeronautical revenue. Concessionaires, such as restaurants, bars, and duty-free shops, pay fees to operate at airports, hotels, lounges, and other facilities. Digitalization and off-airport sales may impact shopping dynamics, but airports can target first-time travelers. Airport expansion projects provide opportunities for operators to establish regional or international hubs, leading to intense competition and growth in non-aeronautical activities, particularly retail. Sleeping pods offer efficient, passenger-friendly services and can generate revenue through additional features like TVs, work desks, and Wi-Fi. Airports are adopting new trends, such as grids, capsules, or sleeping pods, to provide value-added services and overcome space constraints. For instance, GoSleep’s business-class sleeping pods offer TVs, Wi-Fi, and work desks at Dubai International Airport, Abu Dhabi International Airport, and Helsinki-Vantaa Airport. Minute Suites’ sleeping pods provide similar facilities at Philadelphia International Airport, Hartsfield-Jackson Atlanta International Airport, and Dallas/Fort Worth International Airport. Singapore Changi Airport’s Haven by JetQuay offers premium services, including showers and meals, for transit passengers.

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Research Analysis

The Airport Non-Aeronautical Revenue Market encompasses various commercial activities that generate income for airports beyond the core aeronautical business of handling passengers and air cargo. This includes a range of non-aeronautical services such as food and beverage outlets, car rental services, duty-free shops selling luxury goods, electronics, souvenirs, cafes, advertising spaces, marketing campaigns, promotions, and car parking facilities. These offerings aim to enhance the passenger experience and contribute significantly to airport revenues. Airport infrastructure, passenger footfall, and the travelers’ preferences play a crucial role in shaping the market. Digital advertising technologies and high-quality amenities, including entertainment options, are also essential components of this market. Advertisers and airport cities also benefit from the commercial activities that take place at airports.

Market Research Overview

The Airport Non-Aeronautical Revenue Market encompasses various commercial activities that generate income for airports beyond traditional aeronautical services. These activities include, but are not limited to, food services, car rental services, cargo handling systems, car parking, banking, advertising, retail, and more. Airports worldwide are increasingly focusing on enhancing the passenger experience through high-quality amenities, entertainment options, and advanced technologies. Passenger traffic, both air cargo and air travelers, contributes significantly to the demand for non-aeronautical services. In the Asia-Pacific region, where passenger numbers continue to grow, airports are expanding their offerings to meet the needs of air travelers. Non-aeronautical services include food services, such as restaurants and catering, which offer a range of dining options from quick bites to fine dining. Car rental services provide convenience for passengers, while cargo handling systems facilitate the efficient movement of goods. Car parking, banking, advertising, and retail are other essential services that contribute to airport revenue. Stringent regulations, including cargo screening systems and security systems, ensure the safety and security of passengers and cargo. Ground handling systems, ground support equipment, power systems, and baggage handling systems are essential for airport operations. Water service vehicles, healthcare services, and digital advertising technologies are among the latest additions to airport infrastructure. Passenger satisfaction is a critical factor in airport revenue, and airports are investing in personalized shopping, dining recommendations, contactless payment solutions, and virtual shopping experiences to meet the evolving needs of travelers. Advertisers and airport retailers benefit from passenger footfall, while rental services offer convenience and flexibility. The airport non-aeronautical revenue market is digitizing, with mobile apps, personalized shopping, and digital advertising becoming increasingly popular. Airports are transforming into airport cities, offering a range of commercial and leisure activities, from conference centers and hotels to office complexes and amenities. Aviation-related income is no longer limited to aeronautical services, with airports generating significant revenue from non-aeronautical activities.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Service
• Concessionaries
• Parking And Car Rentals
• Land Rentals
• Terminal Rent By Airlines
• Other Services
• Business Segment
• Commercial Development
• Advertising
• Geography
• APAC
• North America
• Europe
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

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SOURCE Technavio