The airport – airline stand-off

Why shouldn’t the same attitude now apply to airports and their relations with airlines? Instead of the airport operator seeing the airline itself as a major source of income, why not treat it as a business partner bringing people and investment to a town’s doorstep? If people are flying to a town they will usually open their wallets and begin purchasing goods and services. If more airlines and people are encouraged to fly in surely this can only be good for the town’s businesses? First steps would be to reduce landing charges, head taxes and security costs. If the regional airfield is council owned such changes would be of direct benefit to local businesses emanating from increased passenger throughput.

Unless I am missing something in Australian history, I don’t think there was a local tax collector waiting for the passengers on the first trains and modern buses that arrived in town, yet, when you disaggregate what makes up an airline ticket that is exactly what happens now. For a privately-owned regional airport it may need to encourage retailing and services at the airport so that the airline becomes a commercial partner bringing an increasing number of customers to business tenants on the airfield. The airport becomes a destination as well as a transit point.

An even more compelling argument can be made for the major airports. To a greater or lesser extent these large airports now understand how important airport-based retailing and services are to their bottom line. If an airport becomes a business centre surely it is compelling to have as many airlines as possible flying customers to your door. If you reduce airport charges to airlines significantly the airlines will look very closely at operating more services. They will become a stronger business partner bringing new customers to an airport’s tenants. A highly successful example is Dubai’s yearly shopping celebration promoted in bold advertising across the fuselages of partner airlines. While this effort promotes Dubai’s retailing in general, there is no doubt on-airfield businesses benefit significantly due to enhanced passenger flow.

Given the above, isn’t it time that we ditched the lawyers at 50 paces approach that has dominated many operator/airport relationships over the past 15 years? Commercial aircraft and even private aircraft that fly into an airport are often delivering business opportunities that are going unnoticed and unexploited. This is due to some airports focussing far too narrowly on what charges can be sheeted home to the airlines themselves and not making their airport a destination in its own right.

Australia is on the cusp of significant change both economically and socially. *******The hostility between some airports and operators is holding back growth for both parties ********* because of a view that airlines, in their own right, are major income sources for airports. In short, overcharging of airlines by some airports is driving up ticket prices unnecessarily while are other sources for legitimate airport income remain unexplored.

“The hostility between some airports and airlines is holding back growth for both parties.”

An argument could be mounted that if an airport becomes a major attraction in its own right, say with high quality accommodation, retailing, entertainment or a even casino within its boundaries, airlines could be paid a fee to deliver customers. Now that would be a change in the relationship.