Ilia Lioutov, Head of Economics at ACI Asia-Pacific & Middle East at the MEADFA Conference 2025.

In the session titled ‘The business of airports: Economic trends & non-aero growth’, at the 2025 MEADFA Conference in Dubai, Ilia Lioutov, Head of Economics at ACI Asia-Pacific & Middle East, presented the latest economic outlook, highlighting trends impacting retail, F&B and commercial services.

He set the scene with some key figures, including how, in 2023, non-aeronautical revenues accounted for 36.7% of total airport income at a global level – down from 40.2% in 2019. Looking at the regional picture, in Africa total airport revenues rose by 38% in 2023 (compared to 2022) with non-aeronautical revenue reaching approximately US$800 million – up 27% yoy. The Middle East demonstrated both “scale and balance”, he added, with total airport revenues reaching $11 billion, of which $4,800 million came from non-aeronautical revenue sources – an increase of 22.4% on the previous year.

On the performance of key non-aeronautical categories, Lioutov said that one key trend stands out: “The drop in global travel retail revenues. Retail concessions which traditionally represent one of the most significant revenue streams for airports, declined sharply by 31% globally in 2023 compared to pre-pandemic levels. This drop reflects not only changing behaviour but also broader structural shifts in retail and travel spending patterns.”

He went on to reveal that globally airports earned an average of $7.45 per passenger in 2023.

“But what is striking,” he added. “Is how unevenly this revenue is distributed across the regions. At one end of the spectrum, we have the Middle East, generating over $16 per passenger, which is more than twice the global average. At the other end, Africa spends just about $4 per passenger.”

The gap, he says, reflects not only the difference in passenger behaviour but also purchasing power. This is linked not only to the economic profile of passengers but also to the travel retail strategy, he elaborated, also highlighting how, in the Middle East, retail revenues deliver a high 48% share of all non-aeronautical revenue.

Ilia Lioutov took delegates on a deep dive into the statistics. 

“The business relationships between airports and concessionaires has evolved significantly since 2019 and the change has been profound,” he said.

The results of a yearly ACI ‘pulse check’ survey shows that three most common adjustments are: restructuring of the concession fee model; amendments to operating terms and conditions; and the introduction of flexible agreements to adapt to market fluctuations and unforeseen circumstances.

“In essence, airports and concession partners have been rethinking the foundations,” he said, describing in particular how contractual and obligational shifts were navigated as a result of the pandemic.

“The sector has shifted from rigidity to flexibility and resilience,” he commented, before going on to highlight key factors driving recent changes in business relations between airports and concessionaires led by shifts in consumer behaviour and spending patterns.

“Passengers today spend money differently. They seek experience over goods. They gravitate towards authenticity and they are much more value conscious. The age of impulse of luxury shopping has given way to purposeful shopping – a trend that affects every single aspect of airport retail,” he said.

In the experience-led era, Lioutov outlined how for travel retailers, design, storytelling, ambience should matter as much as the product itself.

Citing a McKinsey report, he also highlighted how between 2019 and 2023, 80% of the global luxury market’s growth came from price increases with just 20% from volume gain, also warning that price harmonisation has reduced regional gaps that once favoured airport purchases, further impacted by passengers being digitally distracted. Indeed, he quoted a Kearney study for TFWA which shows that dwell time is down -16% from 125 minutes in 2018 to 104 minutes in 2024 with 62% of passengers using smart devices to manage their journey which can divert their attention from browsing.

“Spend per traveller dropped 8% over those years,” he said [2018-2024]. “So the battle is not about footfall only, it’s about eyeballs as well.”

He also highlighted how passengers are increasingly turning to digital researching before the trip and how self-purchasing is replacing gifting. Plus, how currency swings are rerouting purchases and the impact of the normalisation and repatriation of demand from China consumers.

“This rebalancing is permanent and airports must adapt,” he said.

More than a third (36%) of respondents to an ACI ‘pulse check’ survey had not yet considered shifting from a fixed MAG to a MAG per pax model.

Circling back to the evolving relationship between airports and concessionaires, Lioutov pointed out how financial terms dominate the sources of friction, with rent and fees cited by 29% of respondents to the ACI survey as the most contentious area. This is followed by MAG (23%) and length of the concession contract (19%).

“Despite the rise of technology and experience-drive retail, the traditional economic fundamental prevail,” he said. “The financial balance between airports and concessionaires remains the defining tension line, reminding us that in the end money indeed talks.”

On the topical point of whether respondents had considered shifting from a fixed MAG to a variable MAG, more than a third (36%) said no they had not while 25% said they had already shifted (to a MAG per pax model) and 11% saying they are actively considering doing so in the near future.

“It’s really about managing risk,” he said, delving into the main sources of risk, from traffic volatility to consumer behaviours and spending patterns, macroeconomic and currency fluctuations, industry competition, regulatory and policy shifts, operational disruptions and brand and product cycles.

The most popular emerging business model between airport operators and concessionaires, said respondents, is joint ventures (23%).

“This reflects a clear trends towards a deeper alignment of interests where the two parties can thrive together and take the risk together,” he said.

Finally, he highlighted mega trends likely to impact non-aeronautical revenues at airports and the relationships with key concessionaires in the future as follows: digitalisation, changing consumer behaviours; and sustainability, and demographic changes. With this in mind, he stressed the importance of passenger data and of having a level of cooperation in commercial partnerships and data sharing activities with retail and other commercial outlets in order to gain an advantage.

“For airports, excellence is the habit of reinvention,” he concluded. “Never treating non-aeronautical revenues as secondary but thinking it’s the heartbeat of a modern, resilient business model.”

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