C1. The financing of airports relies upon two broad streams: aeronautical revenues from airlines and passenger charges; and commercial revenues from other activities at the airport.

2020 was a disastrous year for the aviation sector worldwide. According to the International Air Transport Association (IATA), the industry has lost $118 billion, with passenger traffic having dropped by 61 per cent. Some airports see improvement in 2021 but not significant. Aviation sectors, including airports, have been searching for solutions to reduce costs and to find new revenue opportunities to minimise staff redundancy and other losses due to the significant downturn in business. On the other hand, airlines approached airports for discounts on aeronautical charges, but airport business has suffered no less than others.

Please explain the different sources of both aeronautical and non-aeronautical revenue for the airports. (10 marks)