Airports are far more than just transit hubs where people drink coffee while waiting for a flight. They are thriving businesses in themselves, and with the global aviation industry contributing trillions of dollars to the world economy, they are pivotal in connecting cities, facilitating trade, and generating employment.
But where does this revenue come from, and how does it ripple through the local economy?
To answer these questions, this article looks at the mechanics of airport revenue generation and explores their broader economic impact. It draws on examples from the two busiest international airports in the world – Dubai International and London Heathrow – to illustrate airports’ centrality to the local economy, as well as the distinctly different ownership models the two sites represent.
How airports make money
At their core, airports derive income from two primary sources: aeronautical and non-aeronautical revenue.
Aeronautical revenue includes charges paid by airlines and passengers. Airlines, for instance, pay landing and parking fees to use an airport’s runways, taxiways, and other essential facilities. Passengers contribute through fees embedded in their ticket prices, which fund the use of airport services such as security checks and terminal access. Revenue also comes from cargo handling fees, particularly as global air freight continues to grow.
As a source of income, non-aeronautical revenue often eclipses its aeronautical counterpart, comprising a wide array of commercial activities. Retail and duty-free outlets are among the most lucrative, with travellers spending billions annually on luxury goods, souvenirs, and essentials. Food and beverage concessions, ranging from fast-food chains to high-end restaurants, are another major contributor, with airports taking a share of every transaction.
Taking a step away from the actual airport terminal, income is also generated by leasing real estate to hotels, offices, and logistics companies. Advertising also plays a crucial role, with airports serving as prime locations for high-value campaigns targeting a captive audience.
While it’s not the most glamorous part of the business, parking and ground transportation, including ride-hailing services and car rentals, add a huge amount to non-aeronautical income streams. A report from Florida Tech on American airports estimated that 41% of total non-aeronautical income fell into this category.
Competing on a global stage
The competitive landscape among airports is intense, with hubs vying for global passenger and cargo traffic. Airports employ several strategies to maintain their competitive edge, offering incentives such as discounts on landing fees or operational costs to attract airlines and encourage them to expand their operations.
Investing in infrastructure is equally critical – world-class lounges, streamlined check-in processes, and state-of-the-art baggage handling systems enhance passenger experiences and solidify an airport’s reputation as a premier transit hub. Airports also collaborate with tourism boards to promote their cities as must-visit destinations, further driving passenger numbers.
Case studies – Dubai and London
Airports act as catalysts for regional development, spurring investment in infrastructure, real estate, and related services. The presence of a major airport can transform a city’s landscape, attracting businesses and boosting urban growth. This ripple effect often extends to neighbouring regions, creating a broader economic uplift. With this in mind, let’s look at two key examples – one in Dubai and one in London.
Dubai International Airport – DXB
DXB’s journey began in 1959 as a small airfield before officially starting operations in 1965. A second terminal opened in 1998, with a third added in 2008. With its ongoing expansion and development, DXB remains a central pillar of the UAE’s economic growth. In 2022, the airport handled over 66 million passengers, with its retail and duty-free operations generating over USD 1.5 billion, making it a global leader in non-aeronautical revenue. That same year, its cargo operations handled over 1.7 million tonnes.
It is a vital contributor to the UAE’s economy, generating USD 26.7 billion annually – approximately 27% of Dubai’s GDP and 5% of the UAE’s GDP. It has maintained its position as the world’s busiest international airport for 2024, with 60.2 million available seats – a 7% year-on-year increase in airline capacity.
DXB directly employs over 90,000 people and supports an estimated 400,000 jobs across Dubai. It is government-owned and operated by the Government of Dubai through the Dubai Airports Company. It is part of Dubai’s broader strategy to position the city as a global hub for trade, tourism and aviation, and while the airport itself is publicly owned, it is run with a commercial approach, focusing on maximising efficiency and profitability. As we will see, this ownership model is quite different to Heathrow.
London Heathrow Airport – LHR
Unlike DXB, London Heathrow is privately owned. It is operated by the private company Heathrow Airport Holdings. This consortium includes investors, international pension funds, sovereign wealth funds, and other institutions. While the UK government does not own Heathrow, the airport is heavily regulated by the government, particularly in terms of setting passenger charges and maintaining safety and security standards.
The airport began in 1929 and was redeveloped in 1944 for military use, becoming a civil airport post-war and re-opening as London Airport in 1946. It was renamed Heathrow Airport in 1966 to distinguish it from other London airports.
LHR is the second busiest international airport in the world, with 48.4 million available seats in 2024, a 4% increase in capacity on the previous year. It supports 140,000 jobs, and as the UK’s only hub airport, LHR plays a central role in facilitating trade for businesses across the country. In 2019, trade passing through Heathrow was valued at approximately USD 234 billion, accounting for over 20% of the UK’s total trade by value. In 2025, this figure is projected to rise to more than USD 253 billion.
Heathrow’s significance extends beyond passenger travel, serving as a critical gateway for global trade and investment. As demand for air connectivity continues to grow, its role in driving economic activity and supporting jobs across the UK will only become more pronounced. It also looks like expansion plans are back on the table in 2025, with the UK government recently giving the go-ahead for a third runway.
Ready for take-off
Airports are more than just doors to the world – they are economic powerhouses that drive trade, tourism, and employment on a massive scale. Whether publicly owned like Dubai International or privately operated like Heathrow, these hubs play a pivotal role in shaping regional and national economies.
As global travel continues to rebound from the pandemic and aviation technology advances, airports will continue to change and grow, finding new ways to maximise revenue, enhance passenger experiences, and maintain their competitive edge. With sustainability and innovation at the forefront, the future of airport economics will be shaped by smarter infrastructure, greener operations, and an ever-growing demand for seamless connectivity.
Ultimately, the success of an airport is measured not just in passenger numbers but in its ability to generate economic value and create opportunities – both within its terminals and far beyond. Consequently, airports will remain at the heart of shaping the cities and countries they serve.
