Airport budget how to#

There are various maintenance requirements that an airport has, which, when dealt with, allow the airline to run seamless operations. They involve the money used to maintain the purchased assets, provide utilities, pay salaries and wages of the airline staff, and purchase various supplies. Operational costs are the ones that are directly related to the smooth function of the airport. It also includes purchasing Ground Support Equipment like luggage carts and vehicles such as tractors and buses. These costs are incurred during the building of runways, taxiways, various structures, and terminals. They are fixed expenses that don’t require additional funding once the project is complete. These costs typically include the price of constructing the airport or expanding the infrastructure of the airline, including funds for labor, materials, and the equipment used. These costs can be categorized as capital expenses and operational expenses. Determine Airport ExpensesĪfter determining the revenue sources you have available, the next thing to consider is the cost of building and maintaining the airport. This often results in higher revenues, lower risk of poor investments, and better provision of amenities. The privatization can contract management, a long-term lease, or complete sale of the airport. It mostly happens when a loan provided has become challenging to pay back for the business. It’s possible to have an airport privatized which could be necessary for reasons like insufficient revenue, high maintenance costs, or future expansion. Plus, if there are some unused runways, the airport can rent them out for driving courses or other activities that can generate income. There could be additional revenue if the airport sells fuel to the planes that stop for refueling during long-distance flights. If there is a wide difference between the estimated revenue and the operation costs, you can resolve it with government subsidies. The rent charges usually apply to the space provided in ticket counter sections, luggage areas, and parking. The service fees typically fall on the passengers and cater for the facilities and security provided in the airport. This money could come from renting services, airline charges, transport services, parking, and more. The income an airport generates is generally used to handle the costs of maintaining the business. It’s also possible to get funded by a foreign government, but this mostly happens in under-developed countries with limited resources. The money required to build or expand an airport could come from government grants, commercial loans, international organization loans, and bonds from private investors or banks. There are some primary sources of capital available for airports which can be public, private, or both. We’ll discuss the revenue in terms of airport funding, which is necessary for the construction or expansion of an airport, income required to handle operation costs, and privatization, the last resort when income sources are insufficient.Įstablishing and running an airport is a project that requires a lot of funding.

As such, we’ll go ahead and look at the sources of revenue in an airport and the costs involved in maintaining an operational airline. There are two primary factors that determine the budgeting process of an airport: the amount of revenue it generates and the expenses it incurs.

This article discusses how airports can handle elaborate budgeting processes in detail.

Airport budget how to#

That is why it’s essential to learn how to execute a budgeting process. Without a budget, it becomes challenging to determine whether the airline is bringing any profits to the table or not. Large businesses like airports deal with many clients within a year and require a ton of money to run and maintain.