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Video answers: How airports make money

Here are the answers to last Friday’s video, enjoy!

Suggested ICAO level for video: 5+

  1. It’s privately owned so the government doesn’t own it.
  2. The break even point for per passenger revenue at Heathrow is $19 per passenger, or to put it another way, if Heathrow earns $19 per passenger that passes through the airport, they will be able to pay for their costs.
  3. Departing and connecting passengers are more valuable because they have more time to shop.
  4. Passengers spend most at retail stores, which earns Heathrow $5.15 per passenger.
  5. They spend more money because the airport encourages it by requiring passengers to pass through duty free shops before reaching their gates and also by not posting gate number until 45 minutes before a flight, which encourages passengers to stay in the central areas with shops. Finally, because Heathrow has many long-haul flights and a greater proportion of long-haul passengers are wealthier, they naturally spend more money.
  6. The average flight costs $9,500.
  7. On average it receives $29 per ticket.
  8. Because Heathrow needs bigger planes to make more money, it tries to encourage that, as a result it’s poorly connected to other domestic airports around the country.
  9. Most airports lose money because they’re government run and not very focused on making money.
  10. They do this because they see airport connections as having a positive economic benefit that they wouldn’t have without the discount for airlines.

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