The value of
airports — October 2018

What dictates the value of an airport? To answer this question investors require a good understanding of what drives passenger demand and airport profitability.

Revenues tend to grow at a rate comparable to growth in passenger traffic and so airport commercial viability typically depends on realising economies of scale. As a result smaller airports struggle — nearly half of Europe’s airports are loss making according to ACI. Indeed, if you just look at those airports handling less than 1 million passengers per annum, the proportion is even higher, at 76%. Net profit at these smaller airports averages minus 6% and return on capital invested averages minus 1.8%.