Time, Money and Airport Delays |
| Courtesy of Eben Esterhuizen | |
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Time is money, especially when it comes to airport delays. In 2007, travelers lost 320 million hours to flight delays, according to Forbes Magazine. A May report from Congress’ Joint Economic Committee put the total losses at $40 billion annually. As Forbes points out, everyone is frowning, except the vendors in the terminal. People don’t take it out on Starbucks or Hudson News when their flights are delayed; in fact, they’ll likely buy a latte while they wait. What else can you do when you are locked inside a shopping mall?
The top 50 North American airports had $4.6 billion in sales, according to the 2007 edition of Airport Revenue News’ annual Fact Book. The largest airport by sales volume, Chicago, makes nearly $300 million a year. It should come as no surprise that Chicago’s O’Hare Airport is the worst when it comes to flight delays. "And prospects are looking better and better," says Joshua Zumbrun. "Ever increasing traffic at U.S. airports – the Federal Aviation Administration projects the number of U.S. travelers growing 2.7% per year through 2025 – has led to a proliferation of services. The picture is one of increased passengers experiencing increased delay times, longer time spent waiting for flights after clearing security (an unintended consequence of the post-Sept. 11, 2001, policy of telling passengers to arrive at flights two hours before takeoff), and policies at many airports to keep prices in the terminal from differing too much from those on the street. Travelers find themselves essentially locked into a shopping mall." Want to profit from airport delays? There are three the publicly traded companies operating at Chicago’s O’Hare airport: Starbucks Coffee (SBUX) Disclaimer: I don’t own any of the stocks mentioned above. |
In 1990, only about 30% of airport revenue came from retail, parking, concessions and other business partnerships. Airport revenue came from charging the airlines. In recent years, however, the portion of revenue coming from non-aeronautical sources has risen to 50%, and at larger airports as high as 60%. An International Civil Aviation Authority study released in September of 53 North American airports found that in 2005, a year in which the airlines lost $10 billion, the airports earned $2 billion. Only five airports failed to turn a profit.
