Concession Structure Analysis

 

Top 20 International Airports 1998

February 5, 2001

 

Synopsis of Analysis

 

 

 

 

 

 

 

 

 

 

Food and Beverage Concession Analysis

Retail and Services Concession Analysis

 

Number 1 Ranking By Category

Pass.  Count  Ranking

Airport

Passenger Count Cat. #1

% Total Cat. #2

Total Revenues Cat. #3

Total NPY Cat. #4

NPY Less Duty Free & Gen. Serv. Cat. #5 

Revenues Cat. #6

NPY Cat. #7

SQF Cat.

#8  

Mthly RPSF Cat. #9

Pass. Count to Sq. Ft. Leased Cat. #10  

Revenues Cat. #11

NPY Cat. #12

SQF Cat. #13

Mthly RPSF Cat. #14

Pass. Count to Sq. Ft. Leased Cat.

#15 

Overall RPSF Cat. #16

#1 & 13

1

Atlanta

73,127,267

9.65%

$188,298,674

$2.57

$2.57

$90,969,428

$1.24

81,727 

$92.76

895 

$97,329,246

$1.33

80,067 

$101.30

913 

$194.06

#10 & 14

2

Chicago

72,485,228

9.57%

$156,311,976

$2.16

$2.16

$81,964,809

$1.13

72,422 

$94.31

1,001 

$74,347,167

$1.03

41,963 

$147.64

1,727 

$241.96

 

3

Los Angeles

61,215,712

8.08%

$262,295,664

$4.28

$2.58

$83,262,171

$1.36

103,355 

$67.13

592 

$74,499,910

$1.22

61,881 

$100.33

989 

$167.46

 

4

Dallas/Ft Worth

60,368,466

7.97%

$136,715,916

$2.26

$2.26

$65,176,538

$1.08

91,881 

$59.11

657 

$71,539,378

$1.19

69,855 

$85.34

864 

$144.46

#3,4,5,6,7,9,12 & 16

5

San Francisco

40,368,500

5.33%

$297,500,000

$7.37

$5.91

$153,500,000

$3.80

99,426 

$128.66

406 

$85,000,000

$2.11

50,657 

$139.83

797 

$268.48

 

6

Denver

36,831,400

4.86%

$104,087,791

$2.83

$2.83

$49,888,270

$1.35

67,400 

$61.68

546 

$54,199,521

$1.47

76,956 

$58.69

479 

$120.37

 

7

Minn./St P. 

28,982,638

3.82%

$62,979,000

$2.17

$2.17

$26,025,000

$0.90

39,339 

$55.13

737 

$36,954,000

$1.28

30,246 

$101.82

958 

$156.94

 

8

Detroit Metro

30,803,158

4.07%

$62,002,960

$2.01

$2.01

$37,266,600

$1.21

55,000 

$56.46

560 

$24,736,360

$0.80

30,246 

$68.15

1,018 

$124.62

 

9

Miami

34,041,712

4.49%

$188,391,363

$5.53

$3.04

$51,589,863

$1.52

115,960 

$37.07

294 

$51,902,202

$1.52

44,532 

$97.13

764 

$134.20

 

10

Las Vegas

33,669,185

4.44%

$54,520,919

$1.62

$1.62

$26,786,128

$0.80

67,689 

$32.98

497 

$27,734,792

$0.82

55,397 

$41.72

608 

$74.70

#15

11

Newark

32,520,800

4.29%

$77,589,000

$2.39

$2.01

$39,660,000

$1.22

57,100 

$57.88

570 

$25,568,000

$0.79

14,500 

$146.94

2,243 

$204.82

 

12

Phoenix

31,769,113

4.19%

$78,381,398

$2.47

$2.45

$44,536,550

$1.40

89,553 

$41.44

355 

$33,421,351

$1.05

38,494 

$72.35

825 

$113.80

#8

13

NY JFK

31,043,500

4.10%

$172,589,000

$5.56

$3.29

$42,523,000

$1.37

128,400 

$27.60

242 

$59,648,000

$1.92

64,150 

$77.49

484 

$105.08

 

14

Houston

30,996,138

4.09%

$60,471,846

$1.95

$1.95

$31,398,136

$1.01

35,770 

$73.15

867 

$29,073,710

$0.94

24,663 

$98.24

1,257 

$171.38

 

15

St Louis

28,600,622

3.79%

$50,493,283

$1.76

$1.76

$33,088,344

$1.15

59,311 

$46.49

484 

$17,431,939

$0.61

30,723 

$47.28

934 

$93.77

 

16

Orlando

27,748,571

3.66%

$90,560,385

$3.26

$2.91

$35,760,258

$1.29

94,499 

$31.53

294 

$45,115,382

$1.63

67,754 

$55.49

410 

$87.02

 

17

Toronto P.

26,744,530

3.53%

$141,163,687

$5.28

$2.56

$30,057,368

$1.12

53,674 

$46.67

498 

$38,449,900

$1.44

48,213 

$66.46

555 

$113.12

 

18

Seattle

25,863,466

3.41%

$71,601,948

$2.77

$2.44

$35,063,142

$1.36

67,668 

$43.18

382 

$27,940,795

$1.08

34,397 

$67.69

752 

$110.87

 

19

Boston L.

26,526,708

3.50%

$128,526,243

$4.85

$2.40

$38,169,298

$1.44

49,801 

$63.87

533 

$25,482,476

$0.96

29,157 

$72.83

910 

$136.70

 

20

NY La G.

23,926,923

3.16%

$53,226,900

$2.22

$2.23

$26,453,800

$1.11

40,600 

$54.30

589 

$26,953,500

$1.13

23,600 

$95.17

1,014 

$149.47

 

  In order to view the preliminary 1999 Concession Structure Analysis Click Here

(The 1999 analysis is preliminary because the final numbers for all airport are not available)

 

 

 

Synopsis of Analysis

 

RMD Financial Corporation generated this "concession structure analysis" based upon the information and documents provided by the sources listed below and others.

The purpose of this analysis is to provide a "first level" preliminary economic analysis of the top twenty international airports in North America.    We have outlined above a "sixteen point analysis"  of the critical first level financial issues a concessionaire should consider as he/she evaluates a concession opportunity at an international airport.    This first level concession structure analysis is the starting point as one completes an analysis of an airport's concession program.   Before anyone invest in an airport concession program they should complete both a "level two and  three" financial analysis of each airport's concession program.
 
 

Do not use this analysis as your "primary investment analysis source"  when you decide to invest in an airport concession program.

 
 

Primary Information Sources:

      • The international airports listed above;
      • Airports Council International;
      • Federal Aviation Administration;
      • US Department of Transportation; and
      • RMD Financial Corporation's staff and clients.

 
 
 

Airports Council International  -  ACI

Airports Council International – North America, head quartered in Washington, D.C., is the "Voice of Airports" for North America, and the largest region of the worldwide Airports Council International. Our members span the continent and provide millions of passengers access to hundreds of destinations every day. From the snowy mountains of Calgary to the sun-drenched airports of southern Florida, ACI-NA's member airports are the portals to the world.  ACI-NA's member airports handle over 95 percent of the domestic-and virtually all of the international-air passenger and cargo traffic in North America.

 
 

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Number 1 Ranking By Category

 RMD has ranked each of the top twenty North American international airports above  based upon the 16 major analytical categories listed below.   The  "number one" airport in each category has been identified.   The number one "overall all" international airport in North America, from the stand-point of "concession management and revenue performance" is  San Francisco International Airport and  the "worst overall" international airport is Las Vegas International Airport.

 

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Pass. Count Ranking

Passenger Count Ranking are determined by the Airports Council International of North America based upon the FAA's annual report of passenger "inplanements and deplanements"   at US airports.   There are 151  airports in North America; however, 54.27% of 1,396,146,782 passengers travel though the top twenty airports.


 
 
Airport

RMD has listed each of the top twenty North American international airports above  based upon their passenger traffic.   RMD has included a "web site link" to the home page of each  international airport.   Each web site link will enable you to secure more detailed information about each airport.
 
 
Passenger Count Cat. #1
 
Passenger Count - Category #1 - The FAA generates an annual report of passenger "in-planments and de-plantments;" based upon information provided to the agency by the aviation managers.

 


 
 
% Total Cat. #2
 
% Total - Category #2 - The passenger traffic of each international airport is compared to the total passenger traffic for the top twenty North American international airports, and the % of traffic controlled by each airport is listed.

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Total Revenues Cat. #3
 
Total Revenues - Category #3 - Each international airport public the annual revenues for each "revenue source" to includes, retail, services, landing fees, food and beverage revenues.   This information if public in the "request for proposals"  issued by each airport when the seek public bids for services.    Trade magazines such as "World Airport Retail News"  public annual detailed revenue numbers.   RMD's concession structure analyses are limited to retail, services, food and beverage revenues; with an "adjustment" for "Duty Free and General Services" revenues.    This "adjustment" allows for a more comparative analysis of all airports.

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Total NPY Cat. #4

Total Net Passenger Yield - Category #4 - The "net passenger yield" for reflects each airport's "computed net dollar yield" for each airline passenger.    Both passenger  "enplanements and deplanements" numbers are included in the analysis.  The  net passenger yield numbers  for retail, services, food and beverage revenues serves as an indication of how well each airport has structured its concession program.   An airport with a "retail NPY" of $5.50 is generating greater revenues for their concessionaires and airport authority than an airport generating NPYs of $2.50.    An airport could be generating above average NPYs and still be a  poorly managed airport from the standpoint of the concessionaire.   New York's "JFK International Airport" food and beverage concession program is an excellent example of this problem.   JFK has an overall NPYs of $3.29 while its NPY for food and beverage revenues is $1.37.    Clearly, with 128,400 square feet leased, the largest in the US, JFK has over leased the  food and beverage segment of their airport.  The pint is that NPYs are a critical analytical element.

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NPY Less Duty Free Cat. #5
 
Net Passenger Yield Less Duty Fee - Category #5 - The "net passenger yield" for reflects each airport's "computed net dollar yield" for each airline passenger.    Only five of the top twenty international airport realize significance "Duty Free" revenues.    Hence, we have computed the impact of "Duty Free Revenues" on overall revenues.  RMD's concession structure analyses are limited to retail, services, food and beverage revenues; with an "adjustment" for "Duty Free" revenues.    This "adjustment" allows for a more comparative analysis of all airports.

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Food and Beverage Concession Analysis Cat. #6 -10

Food and Beverage Concession Analysis - Category #6 - 10
Each element of food and beverage revenues are analyzed separately to determine which international airport has the most "economically sound" concession program.   The "economic soundness  of an airport's concession program is not driven by the size of the airport or the passenger traffic.    Boston's Logan International Airport out performances Dallas Ft. Worth despite the fact that DFW has 60,366,466 passengers, compared to Logan's 26,525,708 passengers.   A concessionaire's evaluation of an airport's concession program should include an analysis of the issues outlined below, the other relevance categories in this report and a detailed study of passenger traffic.  
 

    • Revenues Cat. #6  - Gross food and beverage revenues;
    • NPY Cat. #7 - Net Passenger Yield for  food and beverage revenues;
    • SQF Cat. #8 - Leased  food and beverage space at the airport;
    • Mthly RPSF Cat. #9 - Monthly Revenues Per Square Foot  for  food and beverage revenues; and
    • Pass. Count to Sq. Ft. Leased Cat. #10 - The relationship between "passenger count" and "leased square footage."

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Retail and Services Concession Analysis Cat. #11 - 15

Food and Beverage Concession Analysis - Category #6 - 10
Each element of retail revenues are analyzed separately to determine which international airport has the most "economically sound" concession program.   The "economic soundness  of an airport's concession program is not driven by the size of the airport or the passenger traffic.    A concessionaire's evaluation of an airport's concession program should include an analysis of the issues outlined below, the other relevance categories in this report and a detailed study of passenger traffic.  
 

    • Revenues Cat. #11 - Gross retail revenues;
    • NPY Cat. #12 - Net Passenger Yield for retail revenues;
    • SQF Cat. #13 - Leased  retail space at the airport;
    • Mthly RPSF Cat. #14 - Monthly Revenues Per Square Foot  for  retail revenues; and
    • Pass. Count to Sq. Ft. Leased Cat. #15  - The relationship between "passenger count" and "leased square footage."

 

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Overall RPSF Cat. #16

Overall Revenues Per Square Foot  - Category #16
The purpose of this category is to establish a "standard" for all airport.   The economic impact of all 16 categories are used to compute the Overall Revenues Per Square Foot analysis.     A concessionaire's evaluation of an airport's concession program should include an analysis of the issues outlined above, the other relevance categories in this report and a detailed study of passenger traffic.  
 
 
 

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 How does your airport rank?

Is it the worst international airport for concessionaires?

Is it the best international airport for concessionaires?

 

 For a review of your international airport's 2001 numbers  click here

 

 For a review of your international airport's 2000 numbers  click here

 

 For a review of your international airport's 1999 numbers  click here

 

For a review of your international airport's 1998 numbers  click here

 

  For a list of the top 600 airports worldwide at year-end year 2000  click here

 

  

 

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 Phone: 877-342-6203

 Phone: 720-306-3683

Email: rdaniel@rmdfc.com

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