Regional airports play a very important role in the future growth of the aviation industry. These airports also contribute to the economy of a region as well as the whole nation, especially when the air travel penetration is low but the customer base is widespread. However, every airport has its own requirements depending on their respective market segments. Understanding of these particular challenges and opportunities is responsible for the success of an airport.
This article will give you an overview of the various opportunities and challenges faced by regional airports.
The challenges faced by regional airports are more as compared to those faced by their capital city counterparts.
- Expenses – It costs more to upgrade and maintain a regional airport and for airport ground handling. Most of the regional airports are maintained by local authorities. Hence, there is no expertise and sourcing available for the regular maintenance of these airports. But the upgrading of the airports according to modern aviation standards is mandatory.
Therefore, whenever there is a need for updates, expertise and equipment are sourced from other locations.
- Limited income – These smaller airports have much higher expenses as compared to their income. Although the airports are small, but operating costs for the airport are fixed which needs to be met. So, the expenses per passenger are higher than the global average. Moreover, the airport needs a number of personnel for different operating tasks which is almost similar to the number in major hubs.
Hence, the income is limited as compared to the expenses which give less confidence to investors.
- Route sustainability and airline traction – Since these airports are smaller, they have a very less or negligible catchment area. The route of these airports might need to be operated with a certain type of aircraft which might not be available with all airlines.
This poses as a barrier for attracting airlines to operate to such airports.
There are various challenges faced by the regional airports but these still provide a great future opportunity.
Potential to grow faster – Smaller airports have a stable political environment and a favorable regulatory environment. Due to these reasons, they have a higher potential and faster pace of growth.
The foreign investors and top aviation companies prefer to invest more which contributes further to the growth.
- Favourable government policies – these smaller airports are usually funded by local authorities and have the favor of new government policies.
A commitment and support statement to encourage air traffic from the Government will significantly boost the confidence of investors.
- Focus on development – The airports can increase route development activity, refocus their retails and offer concessions to serve local travellers.
All these measures will contribute to the profit of the airports and hence will lead to increased income.
The future is unpredictable but the airports that remain financially viable will be the most successful. Focusing on the needs and requirements of the regional airlines and general aviation markets will also contribute to the success of these airports.
Hence, there might be certain challenges for regional airports but these are definitely a contributor to the national economy which makes it a matter of interest for investors.
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