True or False: Smaller airports generally generate more than enough revenue to cover operating expenses.

True or False: Smaller airports generally generate more than enough revenue to cover operating expenses.

• A. True
• B. Sometimes
• C. False
• D. Depends

Answer: (C)

Revenue adequacy for smaller airports is not the norm. Operating revenues come from items like landing fees, terminal rents, hangar or tie-down charges, concessions, fuel, and parking, while operating expenses cover staffing, maintenance, utilities, snow and de-icing, security, and other day-to-day costs. For many small airports, demand is limited and traffic is light, so the revenue from those sources doesn’t reliably exceed the fixed and variable operating costs. As a result, these airports often rely on subsidies from local or state government, grants, or cross-subsidization from other revenue streams or capital programs to stay afloat. While a few smaller airports may be financially self-sustaining due to strong non-aeronautical revenue or efficient operations, the general pattern is that smaller airports do not consistently generate more than enough to cover operating expenses.

Revenue adequacy for smaller airports is not the norm. Operating revenues come from items like landing fees, terminal rents, hangar or tie-down charges, concessions, fuel, and parking, while operating expenses cover staffing, maintenance, utilities, snow and de-icing, security, and other day-to-day costs. For many small airports, demand is limited and traffic is light, so the revenue from those sources doesn’t reliably exceed the fixed and variable operating costs. As a result, these airports often rely on subsidies from local or state government, grants, or cross-subsidization from other revenue streams or capital programs to stay afloat. While a few smaller airports may be financially self-sustaining due to strong non-aeronautical revenue or efficient operations, the general pattern is that smaller airports do not consistently generate more than enough to cover operating expenses.