Airport Services Market Size, Share & COVID-19 Impact Analysis, By Airport Type (International and Domestic), By Application (Aeronautical Services and Non-Aeronautical Services), By Infrastructure Type (Greenfield Airport and Brownfield Airport), and Regional Forecast, 2023-2030

The global airport services market size was valued at USD 158.71 billion in 2022 and is projected to grow from USD 179.75 billion in 2023 to USD 440.63 billion by 2030, exhibiting a CAGR of 13.67% during the forecast period.

Growth in the aviation industry has had a major effect on the market. These business opportunities include floor management (cargo and cargo/ delivery, flight control, and others) and passenger handling (customer service functions). Increased infrastructure development, passenger traffic, and congestion in developing countries are expected to witness significant airport services market growth. A significant rise in the refurbishment of existing airport infrastructure and the number of airports is also anticipated to lead to further development of the market.

The airport usually facilitates repair facilities and paved runways and provides a passenger and cargo depot. Service providers are presently seeking higher and long-term business and trade associates to benefit for a long time such as the modernization of airport infrastructure. Furthermore, countries worldwide are investing to make their airport infrastructure user-friendly and advanced. For instance, in December 2021, AAI, the Airports Authority of India announced to spend about USD 3077.5 million approx. over the next five years to modernize and expand pre-existing terminals. The spending is part of several reviving measures undertaken by the Ministry of Civil Aviation in India to minimize severe disruptions caused by the COVID-19 pandemic in 2020 and 2021.

COVID-19 IMPACT

COVID-19 Pandemic Caused a Decline in Demand for Airport Services Globally

Airport services experienced a drastic decline in demand as soon as the lockdown was imposed following the spread of COVID-19. The recent coronavirus outbreak has drastically impacted the aviation and airport services industry. At the pandemic's peak, in April 2020, as governments set up isolated settlements and closed borders worldwide, over 60% of international airlines were suspended. One million jobs were lost, with industrial aviation losses reaching USD 126 billion. Furthermore, air connections decreased by over 50% in 2020 by over 1.7 billion passengers, a decrease of 60.2% in flights than in 2019.

LATEST TRENDS

Increasing Use of Emerging Technologies such as Artificial Intelligence to Bolster Growth

AI is embedded in many areas of the tourism industry, making life easier for travelers worldwide. AI and other emerging technologies, such as airport security, scanning devices, and face recognition programs, are widely used in airport operations.

Authorities worldwide are likely to invest in making smart airports by adopting advanced automated technologies at airports to handle various operational challenges. Numerous airports have started employing autonomous robots driven by machine learning and artificial intelligence. For instance, in July 2021, Robotic Assistance Devices Inc. unveiled that it delivered a six-unit order of ROSA180 to the U.S. airport authority. Airport facilities offer superior efficiency and convenience as a high priority. ROSA180 is a self-contained security, communication, and compact solution with a deployable time of 15 minutes. Different airport service providers are employed to enhance passenger experience to keep the airport hassle-free.

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DRIVING FACTORS

High Investment and Increasing Population to Accentuate Market Growth

As the number of COVID-19 cases decreases, the aviation industry has started growing exponentially. A surge is currently experienced in terms of the number of passengers, leading to a growth in fleet and air passenger traffic. This has ultimately led to the need to build appropriate infrastructure and safety regulations to provide airport services. As the global economy has started to grow after struggling for two years during the pandemic, a subsequent rise in the personal disposable income of people is expected to boost the market growth. A higher personal net worth of people and ease in restrictions together will lead to an increase in the number of travelers to domestic and international destinations, subsequently leading to a need for investments in airport services by authorities around the world. For instance, in April 2022, Indian Civil Aviation Minister Jyotiraditya Scindia unveiled an investment of about USD 21.6 billion in the coming years. With these investments, the government aims to expand the number of airports in India and add the total number of airports to 200. The investment also includes provisions for private entities. Thus, initiatives and investments are expected to boost the market over the forecast period.

Development of Advanced Airport Services and Infrastructure to Bolster Growth

There is a rising need to develop airport infrastructure in smaller cities. Hence, airports are under constant progression to accentuate their infrastructure and improve customer experience. New construction projects around the world are developing exponentially. According to a study from Business Wire, the number of projects in the implementation phase reached USD 377.6 billion, while the ones in the planning phase cost USD 215.8 billion. An instance of the same could be, in December 2021, Heathrow – Europe’s busiest airport in the U.K., announced that it aims to have a third runway ready by 2026. The airport is predicted to introduce a new pilot component tracking system to enable attaining this goal on schedule. Siemens Digital Logistics will develop the technology. The system will track millions of vital construction components destined for the new runway site in real-time.

Additionally, growing demand for amenities for longer routes, more modern air traffic control, and more gates is expected to accentuate market growth.

RESTRAINING FACTORS

Lack of Appropriate Infrastructure and Strict Government Restrictions to Limit Market Growth

Despite the booming aerospace industry and refurbishment of old airports, some regions in the world are still struggling with the lack of appropriate infrastructure to support highly equipped aircraft and support appropriate services. The government or the civil aviation ministry plays a major role in airport-related services and infrastructure. There are various relief and support initiatives for airport service providers. However, in some scenarios, strict rules and regulations by the government and airport authorities hinder airports and aviation-related growth. Airports worldwide have different and targeted governance systems. Thus, the industry's current crisis requires more cooperation to help the aviation industry recover.

SEGMENTATION

By Airport Type Analysis

The market is classified into international and domestic based on airport type.

The international segment is anticipated to be the fastest-growing after travel restrictions worldwide are lifted post-pandemic. Increased travel spending by middle-class customers in developing countries is a primary factor in the growth of domestic passengers. Domestic airline demand is growing due to increased development in business, tourism, and other sectors.

The domestic segment is predicted to lead the market in the forecast period due to the growth in domestic passenger traffic amid the pandemic. The increase in the population of domestic passengers in developing countries, such as China and India, is anticipated to enhance the growth of the market. Since India has the 3^rd largest domestic market globally, increased spending on domestic airports and passenger traffic is expected to propel the segment's growth.

By Application Analysis

Growing Demand for Aircraft Maintenance Services Driven by Increased Active Aircraft Fleet Size to propel market growth 

According to application, the market is segmented into aeronautical services and non-aeronautical services.

The aeronautical services segment accounted for the higher market share owing to the growing demand for advanced aeronautical services in the market. The segment is further classified into aircraft ground handling services, aircraft maintenance services, and passenger services.

Aircraft maintenance services mainly include fleet maintenance required to ensure the airworthiness of a part or the whole aircraft, including inspections, repairs periodically, which drives the growth of the market, supported by the rise in the active fleet size of aircraft by many operators.

Aircraft ground handling services comprise parking service, ramp service, lavatory cleaning and replenishment, and others. Passenger services include transit service, security service, and others.

Passenger services comprise services rendered to the passenger such as catering, buggies, strollage, help desks, and check-in services.

Non-aeronautical services include car rental, parking, food, beverage, retail, and baggage handling services. The non-aeronautical services segment is predicted to be the fastest-growing segment in the market. Non-aeronautical revenue gives additional aid to the airport service provider during a pandemic or economic depression.

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By Infrastructure Type Analysis

Greenfield Airport is Predicted to Experience Substantial Growth Owing to New Investments from Emerging Markets

Based on infrastructure type, the market is bifurcated into greenfield airport and brownfield airport.

With the sudden rise in air passenger traffic & travelers and increased airline fleet, airport operators are spending more and undergoing immense pressure concerning passenger handling. Greenfield airport is an expression used to refer to a new airport in a new location, built from the ground. Rise in the investments in the development of new airport projects around the world expected to witness significant market growth and is anticipated to hold the highest CAGR during the projection period. Moreover, due to the rising demand for internationally benchmarked airports, the brownfield airport segment is expected to rise during the forecast period due to development and modernization of airports.

REGIONAL INSIGHTS

By geography, the market is divided into North America, Europe, Asia Pacific, and the Rest of the World.

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North America dominated the market in 2022. The North America market was valued at USD 46.70 billion in 2022. The growth is attributed to major market players such as S.A.S. Services Group, Inc. and Air General Inc. The region held the largest passenger traffic in the base year after the pandemic hit. Thus, the region accounted for a significantly large market share and is predicted to grow at an increasing rate over the forecast period.

The Europe airport services market share is anticipated to witness substantial growth due to the growing airport infrastructure in the U.K., France, and Germany. Moreover, Germany is a primary hub for airport service providers, including Frankfurt Airport Services Worldwide, Fraport AG, LHR Airport, and Worldwide Flight Services. These are some major service providers in the region.

Asia Pacific is expected to be the biggest emerging global region due to a recent surge in air passenger traffic. Air passenger traffic and growing low-cost carriers in India and China encourage the modernization and development of airport infrastructure and the expansion of new airport numbers in the region. According to the International Air Transport Association, China’s air passenger traffic will exceed the U.S. in 2024. Furthermore, India is anticipated to be the third-largest aviation market due to a rise in aircraft fleets and the increased trend of low-cost carriers during the forecast period.

The rest of the world is also predicted to witness high growth in the market due to modernization and advancements in the airports and an increase in the frequency of foreign tourists. Moreover, growing investment by the governments in advancing the public infrastructure to enhance tourism is predicted to drive market growth.

KEY INDUSTRY PLAYERS

Growing Acquisition Route Expansion and Modernization Strategies to Lead to Market Growth 

LHR Airports Ltd. and Fraport AG Frankfurt Airport Services Worldwide are some of the largest airports in the world. These airport authorities provide various services at their airports. Airport service providers have used space expansion and collaboration strategies to compete in the market. Frankfurt International Airport has the most direct routes worldwide, serving over 300 destinations on five continents. Additionally, airports welcome new strategic alliances and partnerships and enter into long-term contracts with airlines to build long-term relationships with aircraft system OEMs, airlines, and Maintenance, Reports and Overhauls (MROs) to continue in the market.

List of Key Companies Profiled:

• Beijing Capital International Airport Co. Ltd. (China)


• Fraport AG Frankfurt Airport Services Worldwide (Germany)


• Air General Inc. (U.S.)


• dnata (UAE)


• Worldwide Flight Services (France)


• S.A.S. Services Group, Inc. (U.S.)


• LHR Airports Limited (U.K.)


• Acciona (Spain)


• Signature Aviation plc (U.K.)


• Tokyo International Air Terminal Corporation (Japan)


• Çelebi Aviation (Turkey)


• Airports de Paris SA (France)

KEY INDUSTRY DEVELOPMENTS:

• March 2022 – Hainan Airlines gave a new ramp handling contract to Worldwide Flight Services (WFS) at Seattle-Tacoma International Airport. The WFS will provide loading and unloading of its 3-5 weekly passenger freighter services for the Chinese airline. Moreover, WFS will also offer other ramp services for the airline, including lavatory, GPU services, crew shuttle, and water.


• February 2022 – Worldwide Flight Services (WFS) extended its cargo handling contract with Turkish Airlines in North America Dallas/Fort Worth and Houston. The new agreement will commence in March as the local WFS team will handle 3-4 freighter weekly flights plus daily B777 passenger services in the city.


• May 2022 – Celebi Aviation, an Indian ground cargo handling company, announced deploying emerging technologies such as Internet of Things (IoT) and blockchain in their operations. The company invested more than USD 220 million in India, investing in infrastructure to handle 7,000+ tonnes of cargo, increasing security initiatives, additional handling equipment, and a state-of-the-art transshipment center.


• September 2022 – LAS Goldair Handling, an Indian services joint venture, launched its services at two of India's airports. The services have been established at Bagdogra International Airport and Udaipur Airport. The company is expected to manage the terminal, cargo, and ramp for chartered flight operators for all international and domestic flights departing and arriving at Bagdogra International Airport.


• August 2022 – U.S.-based cargo ground handling company, Alliance Ground International (AGI), acquired Airport Terminal Services (ATS). The acquisition is anticipated to offer additional services in commercial passenger ground handling services.