Industry insight into airport-owned land

Industry websites are often enlightening regarding the workings of airport-centric commercial development (often referred to as an ‘aerotropolis’). This article in business website AreaDevelopment is a case in point. Entitled ‘Open for Business: Airports as Real Estate Developer and Strategic Partner‘ the article emphasizes the scale of airport land ownership and its role in airport income generation, seeing opportunities for business from airports as they ‘control large swathes of prime real estate’.

Airports used to be situated on the periphery of cities. Now hotels, shopping malls, tourist facilities such as casinos, offices and other business premises cluster around airports. The article explains that the majority of airports aim to attract non-aviation businesses to locate on ‘the lands and properties they control’ and that this provides a stream of ‘non-aeronautical revenue’. Many airports generate more non-aeronautical revenue than they receive in fees charged to airlines for landing and terminal services. Non-aeronautical revenue is used for airport maintenance and expansion. Thus a symbiotic relationship is established between growth of the airport and growth of the non-aviation commercial activity surrounding it. Many airport estates are so expansive that they even encompass ‘natural features like streams, beaches, and other conservation areas on their vast lands’. Undeveloped areas of natural beauty are additional assets for the airport, which can be served up as ‘attractions’ for visitors and the local community, while the airport and airport linked businesses continue with the main business of concreting over the majority of green space at their disposal for various industrial and commercial purposes.

Airport-owned land aims to host particular types of businesses – transnational firms which operate globally, import or export goods/components, require just-in-time delivery of goods/components and with staff frequently flying to and from business premises. All these are characteristics of aviation dependency. Reliance on air services is designed into the airport centric development.

The article describes the relationship between airports and surrounding development as ‘industrial ecology’. Airport centric development is indeed ‘ecology’ in the sense that there is an interdependence. But it is the very opposite of the ‘ecology’ of natural systems. Use of airport-owned land for aviation dependent business is a driver for economic growth built on profligate resource consumption, pollution, destruction of nature through building on green space and fossil fuel dependent long distance transportation. Businesses are selected as tenants on airport land on the basis that they will maximise the throughput of passengers and/or cargo. Locally based firms aiming to source inputs from nearby, to target local markets and/or transport goods using surface transport – minimizing fossil fuel use in transportation, with consequent reduction in greenhouse gases emissions – won’t get a look in.

The article is also enlightening regarding governance of the land in question, gushing enthusiastically about the high degree of autonomy that airports have over the land that they own. It makes an important distinction: airport land that is state owned is ‘not under the jurisdiction of local authorities’. And whether state owned or privatized, the airport has a high degree of self-governance, acting like a mini-state. The article enthuses over airport estates’ relative freedom from democratic control by the host community, stating that the land in question is ‘unfettered by local planning restrictions’.

Airport centric developments are evolving a dual role, combining the authority of the state (minus the the accountability that is ensured by democratic input) with the profit motive driving a corporation. As the article phrases it airports are ‘turning themselves into real estate developers, landlords and astute local authorities’. Commercial development on airport-owned land is a fast growing mechanism for state capitalism.

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