The sky is the limit? The determinants and constraints of European airports commercial revenues

This study investigates the determinants of commercial and retail airport revenues from real estate operations. Aviation revenues per passenger are mainly determined by the national income per capita in the area where the airport is located, the percentage of leisure travelers and the size of the airport. Main drivers of commercial revenues per passenger include the number of passengers passing through the airport, the ratio of commercial to total revenues, national income, the share of domestic and leisure travelers and the number of flights. These results are in line with previous findings of a negative influence of business travelers on commercial revenues per passenger. We also find that a large amount of retail space per passenger is generally associated with lower commercial revenues per square meter confirming decreasing marginal revenue effects. Real estate revenues per passenger are positively associated with national income per capita at airport location, share of intra-EU passengers and percent delayed flights.