How did airports make money in 2020?

    The drop in global passenger demand and travel restrictions continued to rock the aviation industry. Like airlines, airports had been seeing revenue fall over the last few months. This has remained low for much of the past year, which resulted in minimal income.

    Jewel Changi Airport
    Jewel Changi Airport

    The standard approach

    Usually, airports rely on passengers for a regular flow of revenue. They generally take a little profit of every sale made by a retailer, which is why duty-free is often encouraged. It costs around $1.5 billion to run Heathrow Airport each year. With around 80 million passengers going through, the London hub relies on each person to satisfy its expenses.

    London Duty-Free

    On an average, Heathrow’s sales cut is broken by the following:

    • Restaurants – $5.15.
    • Retail shops – $5.15.
    • Parking lots – $2.03.
    • Car rentals and VIP lounges – $3.04.
    • Express train to London – $2.15.

    The airport also makes an aggregate of $9,500 for each aircraft that lands. The charge depends on the size of the plane. For example, an operator of a Bombardier Dash 8 will pay just $999, while a company landing a Boeing 747 will churn out $11,600.

    Unusual times

    However, with around 75 per cent of global flights restricted compared to this time in 2019, airports have lost out on considerable chunks of revenue due to the lack of passengers and aircraft coming in. 

    Mumbai Airport
    Mumbai Airport

    A few months ago, Airports Council International (ACI) reported that airports in the United States are expected to lose $14 billion due to operational inactivity.

    Current situation

    With the COVID-19 vaccine getting available soon, air travel has been resumed by huge numbers. Many airports have started running back by their older efficiency. Although there is a capping of only 70% passengers, it is sufficient for the airline and the airport to make enough money to cover its expenses. Air travel is set to be back to its average rate by the Q3 of 2021. 

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