passenger numbers at Europe’s airports are around half that observed at the equivalent time of year pre-pandemic, but even this is a marked improvement on the situation just a few months ago.

European air travel is showing what might tentatively be described as the green shoots of recovery. Latest data shows

The impact of the pandemic on airport revenues has been dramatic, with an average year-on-year decline across Europe’s airports of around 60%. Hidden beneath the headline figures, however, is a more complex picture. From country to country and city to city, each airport faces a very different pandemic recovery roadmap, based on their location, size and routes.

For many airports, non-aeronautical services, such as retail and F&B outlets, car parking, and rental car concessions, could play a crucial role in recovery. Large airports (more than 25m passengers per year) typically generate about 45% of their revenue from non-aero revenues; the share for smaller airports is generally below 35%.

For the majority of Europe’s airports, non-aero revenues have been more stable during the crisis. Understanding the nuances behind these figures will be crucial for airport operators, concession holders and investors, to determine how trends will play out as the recovery continues in the months and years ahead.

We have seen large differences in the performance of non-aero revenues between airports, driven by operational and scheduling decisions such as gate allocations, security check-point openings, and maintenance works. Responses on how to deal with external impacts such as flight delays and rerouting, airline destination network choices, and even access road flow-through also play a key role. To give one example, because many airports are consolidating passengers on a reduced number of gates, retail outlets nearest the open gates have seen their revenues hold up better than others.

In addition, while total retail spend per passenger has largely held up during the crisis and, in the case of some airports, increased by up to 10% year-on-year, again there are significant variations between different airports and different retail categories.

Overall, while non-aero revenues have fallen less than total revenues in 2020, it is unclear whether this trend will last when passenger numbers recover to pre-pandemic levels, which most industry experts expect to happen around 2024 or 2025. Over the longer-term, it is far less certain how much ancillary value can be generated and how it would be divided among stakeholders.

Another factor to consider is how the current crisis is testing the strength of the relationships between airport operators and concession holders. While interests can appear in direct conflict when determining concession fees under a severely reduced passenger flow, the interdependence of all players remains true, and all parties benefit from collaborative optimisation of the customer journey to maximise the value of each passenger. The relationship between airports and concession holders should therefore transcend transactional bargaining on fee structures.

More than ever, it is obvious that airports are far more than landing strips and parking for airplanes. They create value for a range of stakeholders, including themselves. Retail, F&B, car parking and rental car concessions are a crucial part of the passenger experience and should be seen not as a zero-sum game but as a synergetic value source for airports and airlines.