Report: Despite traffic boom, airport profits thin

 Global passenger traffic has rebounded sharply, yet the airport business model that has sustained decades of predictable growth is under strain.

According to Acuracy’s white paper, “What does the future hold for airports?”, airport revenues in 2023 remained 12% below 2019 levels even though traffic was only 5% lower. The disconnect exposes structural shifts reshaping how airports create value.

The report argues that airports are moving away from a volume-driven infrastructure model towards integrated platforms that balance passenger behaviour, climate risk and capital discipline.

Global air travel in 2024 exceeded pre-pandemic levels, with revenue passenger kilometres up 3.8% on 2019.

The white paper concludes that airport success can no longer be measured by passenger volumes alone; airports must integrate passenger experience, sustainable operations and diversified revenue into a coherent strategy.

Yet the composition of demand has changed. Business travel has structurally declined, while the leisure and visiting friends and relatives segments now dominate growth.

These passengers are more price-sensitive and experience-oriented. They spend more time in terminals when offered compelling reasons to do so.

The report cites US research showing that a 10% increase in dwell time can lift food and beverage revenue by 8% and retail revenue by 6%, adding that airports must therefore transform dwell time into commercial engagement.

This shift challenges facilities originally designed for time-sensitive corporate travellers. Seamless digital journeys, biometric processing and integrated mobility connections now determine competitiveness.

Leading hubs such as Singapore Changi have deployed passportless entry, automated baggage systems, and biometric corridors to reduce friction, while also expanding landside attractions, such as Jewel, which drew 80 million visitors in 2024, exceeding airport passenger numbers.

Frankfurt Airport, for example, now hosts more than 80 long-distance trains per day and recorded a 30% rise in Lufthansa Express Rail passengers in 2024.

Passenger volumes are forecast by Airports Council International to exceed 16 billion by 2040 and 20 billion by 2050, underscoring the urgency of decarbonisation.

For airports, 86% of total emissions are linked to in-flight scope three activities, while 14% stem from ground operations.

Sustainable aviation fuel remains the most viable near-term lever, with the potential to reduce aircraft CO2 emissions by up to 80%, it noted.

Yet global SAF production reached only 2.5 billion litres in 2025, representing less than 0.7% of aviation fuel consumption.

Meeting 2050 demand would require up to 6,500 renewable fuel plants and an annual investment of $128 billion.

According to it, airports generate revenue from three streams: aeronautical charges, non-aeronautical commercial activities and investment income. Roughly 90% of revenues remain tied to passenger traffic.

The report highlighted that aeronautical revenues, largely regulated, provide stability but limited pricing flexibility. Non-aeronautical revenues offer higher margins yet are sensitive to passenger behaviour.

Since 2016, per-passenger non-aeronautical revenues, as reported, have declined at a compound rate of 2.3%, underscoring the need for digital engagement and new retail formats.

Ownership structure alone does not determine success. London Gatwick, privatised in 2009, doubled pre-tax profit to £243.8 million by 2023 and is advancing a £2.2 billion second runway project.

Singapore Changi’s corporatised public model consistently reinvests diversified income into expansion. By contrast, Domodedovo Moscow suffered financial distress due to heavy leverage and a decline in traffic, while Berlin Brandenburg’s public mismanagement drove cost overruns from €2.5 billion to over €7 billion.

Dubai International illustrates a strategically managed public model. In 2024, it handled 92.3 million passengers. Emirates Group reported profit before tax of $6.2 billion for 2024–25, with EBITDA of $11.5 billion. Non-aeronautical revenue reached $1.5 billion in 2022, supported by high passenger throughput and diversified retail.

The report argues that future profitability depends less on traffic growth and more on asset optimisation.

In conclusion, it stated that the next era will reward operators that place passengers at the centre of design, treat sustainability as a financing advantage and a commercial imperative, and deploy capital with long-term discipline.

As infrastructure sectors move away from purely volume-based remuneration, airports may also face new regulatory frameworks linking returns to service quality, resilience and environmental performance.

Wole Shadare