Airport Finance & Charges

Airport charges are applied to airport users for the use of airport facilities. The way in which an airport makes money is basically divided into aeronautical and non-aeronautical (commercial) means. Aeronautical charges typically comprise landing (usually based on aircraft weight), parking, other infrastructure charges, navigation, passenger and freight handling (on a per-passenger or consignment basis), and fuel provision. Government taxes may also be included. Ultimately, these charges are paid, indirectly, by passengers and freight customers via the ticket price or freight forwarding fee.

Airport charging systems are in many instances imposed and governed by national authorities and can be ‘light’ or ‘heavy’ handed, or somewhere in-between.  In a light-handed regime airports may be given carte blanche to set their own fees. At the other end of the scale they will be closely controlled. Some countries control prices at their main gateway airports only. Even where the airports concerned are privately owned, the charges have to comply with whatever regulatory parameters are set by the authorities.

Airports may apply ‘single’ or dual’ till principles. Under the single till principle all airport activities (aeronautical and commercial) are taken into consideration to determine the level of airport charges. Under the dual till principle, only aeronautical activities are taken into consideration; the airport's retail and other non-aeronautical revenue is not taken into account in reducing charges to airline users. Airport charges derived using the single till approach are therefore likely to be lower than they would under a dual till because of the "sharing" of profits generated by commercial activities. There are some variations on this theme, eg excluding parking revenues from the "till".

Charging systems can also work as management tools. By varying certain charges, airports for example can try to increase the use of airport infrastructure or reduce the environmental impact of aviation. In reports issued by CAPA in 2009 (e.g. in Airport Investor Monthly) it was clear how even neighbouring airports responded to the financial crisis by differing methods - in some cases reducing their fees (and/or introducing incentives) and in others by raising them (and/or curtailing incentives).

News Headlines

CAPA Analysis

Share Market Performance