Impact of Non-Aeronautical Revenues on Airport Landing Charge in Global Airports

Abstract

The airport industry, which is heavily regulated, has shown interest in improving performance by increasing non-aeronautical revenues (NAR) to cope with changes in the aviation environment, including trends toward liberalization and privatization. This study uses panel data from three separate years (2012, 2014, and 2016) to analyze how a high NAR share might affect airport charging policies and explores the impact of NAR on landing charges of global airports grouped by type of aircraft. The data was collected from 137 airports worldwide, and generalized least squares regression was performed by including data obtained from the ATRS (Air Transport Research Society) Global Airport Benchmarking Reports. The results indicate that an increase in the NAR share has a statistically significant negative effect on airport charges. This study provides meaningful implications from an empirical analysis of how a change in an airport’s business model, such as increasing the NAR share, might affect airport charges. This study’s results are expected to encourage international airports to be more active in promoting commercial activities (e.g., duty-free shops) and pursue a pricing policy that can bring them a competitive advantage.