Airports, Flying Fields, and Airport Terminal Services

SIC 4581

Companies in this industry

Industry report:

This category includes establishments primarily engaged in operating and maintaining airports and flying fields; servicing, repairing (except on a factory basis), maintaining, and storing aircraft; and furnishing coordinated handling services for airfreight or passengers at airports. This industry also includes private establishments primarily engaged in air traffic control operations. Government air traffic control operations are classified in SIC 9621: Regulation and Administration of Transportation Programs. Aircraft modification centers and establishments primarily engaged in factory type overhaul of aircraft are classified in transportation equipment industries, and flying fields maintained by aviation clubs are classified in SIC 7997: Membership Sports and Recreation Clubs.

Industry Snapshot

According to figures from Airlines for America (A4A), approximately 19,700 airports operated in the United States in 2011. Of that total, a majority were publicly owned. In the early 2010s, the United States accounted for about 30 percent of commercial aviation and 50 percent of general aviation in the world. With more than five of the top 10 busiest airports in the world, North America transported more passengers and cargo via air than any other region.

The airport, flying field, and airport terminal services industry can be divided into two distinct parts. One segment of the industry offers airport terminal services, covering everything from baggage handling to food service. These companies typically work with domestic and international commercial airlines as well as airport management. The other segment of the industry offers aircraft services, including maintenance, repair, aircraft conversion, and sales of equipment and parts. These companies work with commercial passenger airlines but have also provided service to the U.S. military, to makers and end users of general aviation aircraft, and to air cargo carriers.

Airports that can increase the number of runways to increase capacity stand to benefit more than those airports that do not have more room for additional runways. Although the decrease in traffic following the September 11, 2001, terrorist attacks on the United States eased congestion at airports across the globe, by the mid-2000s passenger numbers once again were over 2000 levels. With an increase in security measures as well as in the number of regional and low-cost carriers, ever-increasing fuel costs and record passenger numbers, major airports in the late 2000s were often congested and delays were increasing.

The aircraft and airport services industry has always included a broad range of companies, from small private firms to divisions of large conglomerates that offer transportation-related services to divisions within an airline operation. While large organizations with internationally based operations continued to expand their areas of service in an attempt to be a "one-source" provider of an array of airport services, they still had not convinced airports or airlines to outsource en masse. Most airport services contracts continued to be written on an airport-by-airport basis. Consolidation, however, continued as many of the industry's leading players added to their portfolios.

Organization and Structure

Airports in the United States typically contract with outside vendors for the services they provide to airlines and passengers. Those vendors, which make up the companies listed in this industry, provide a number of services to people and to planes. Providers of airport terminal services operate food and beverage concessions, gift shops, and newsstands in airport terminals, while providers of airport passenger services offer bus and limousine operations, consulting and training services, passenger screening, airport security, interline baggage service, and skycaps. Aircraft in-flight service companies provide catering operations for commercial passenger airlines.

Other companies provide aircraft terminal services, including ground handling services for commercial carriers, aircraft fueling and cleaning, and baggage handling. Maintenance, repair, and overhaul (MRO) companies provide heavy maintenance, usually working on aging-aircraft programs or on conversions for commercial carriers and military aircraft. Fixed-base operation (FBO) vendors work as a "service station" for aircraft, providing refueling and ground handling services for corporate jets and general aviation aircraft. FBOs sometimes have a terminal lounge for flight crews. Aviation aftermarket companies sell parts and equipment for new or used aircraft, usually as a division of an aerospace company.

Depending on the type of service provided, aircraft and airport service companies operate on airport grounds, within the airport terminal, or at nearby hangers or production facilities. Most companies have corporate headquarters physically removed from these working sites.


The Gulf War, skyrocketing fuel prices, airline fare wars, rising debt service costs, and the slowdown of the U.S. economy had devastating effects on the financial condition of several domestic airlines in the late 1980s and early 1990s that affected all the airlines. By 1993, the air transportation industry had lost a record $10.5 billion, three large carriers had ceased operations, two were in bankruptcy, and one had just emerged from bankruptcy protection. Companies providing service to the air transportation industry shared in the recession, but the unprecedented recovery of the airline industry in 1995 through 1996 helped rebuild many of the service companies that survived the downturn.

Passenger Services.
During the slowdown of the early 1990s, companies providing terminal services were hard hit by price-conscious travelers who limited their out-of-pocket spending in the airports. One company, Dobbs Subsidiaries, a division of the Dial Corporation, was sold to Host International in 1992 due to rising costs. In turn, Host, a division of the Marriott Corporation, lowered its prices, offered promotions, redesigned its concession stands, and brought in well-known fast food chains to entice passengers to use their services.

Unlike most of the other companies in this industry, those offering in-flight catering are directly dependent on the operations of the major commercial passenger airlines. The companies that survived the turbulent years from 1988 to 1993 accommodated the ever-changing demands of these airlines. Dobbs International was one such company. Despite the difficulties posed by the price wars in the airline industry, Dobbs continued to earn more in revenues and profits because of its success in winning new contracts, according to Donald, Lufkin of Jenrette Securities. Consequently, Dobbs maintained an estimated 19 percent market share. Market share of other catering companies included CaterAire (formerly Marriott) with 26 percent, Onyx (formerly Sky Chefs) with 19 percent, and UAL Services with 15 percent.

Aircraft Services.
Maintenance operations were also affected by the recession, but this segment of the service industry stabilized by the end of 1993, due in part to diversification. For example, Pemco Aeroplex, a large third-party maintenance operator, maintained a 50-50 mix of military and civilian work to level off the peaks and valleys of the market.

Many providers of fixed-base operations responded to the recession by consolidating operations. The best-known merger took place between Page Avjet Airport Services and Butler Aviation International, thus creating the world's largest multi-site FBO (fixed-base operation) company. Some industry analysts predicted that merged operations such as these might be the model for FBOs in the early 2000s.

Industry Growth.
A long recession in the passenger airline industry from 1988 to 1992 hurt the industry, and many airlines ceased operations, merged with other airlines, or cut back service. All service companies, especially those dependent on the large air passenger carriers, struggled to survive. Small maintenance companies merged, while the large conglomerates sold unprofitable services. Surviving companies diversified their services and their markets, and many moved into the international arena. During the late 1990s, the industry reported steady profits with the exception of the Northwest Airlines pilot strike in 1998.

Many airport and aircraft service companies have turned to strategic alliances or partnerships to create further market growth. For example, UNC, Inc. developed long term contracts with major aviation firms and formed trading company partnerships to add leasing and parts distribution services.

Air transport service companies relied on computers to continue improving their services. UNC, Inc. used cutting-edge information technology to provide its customers with computerized online parts status. Commodore Aviation became completely computerized as well, allowing instant tracking of work hours required and materials expended.

Even though the information in 1998 was affected by the Northwest Airlines pilot strike that year, domestic air traffic reported a 4.9 percent increase. However, the net effect of this was lost because capacity rose 9.5 percent during the same period. The resulting overall load factor dropped 2.9 points to 65.9 percent. The excess domestic capacity resulted in a 2 percent decrease in average ticket price.

Over the five years preceding 2002, employment at U.S. airports grew 16 percent, earnings grew 22 percent, and output grew 33 percent. As a result, many airports began major renovations and upgrades. The FAA predicted that revenue passenger miles for U.S. airlines would grow 64 percent by 2012, which suggested that the trend was likely to continue in spite of reduced passenger and cargo traffic in 2002. Analysts also anticipated that airports would make better use of their existing facilities.

The aviation services industry experienced continued consolidation into the twenty-first century. In the late 1990s, Swissport International acquired DynAir, a leader in airport and aircraft services, and Gate Gourmet Co. added to its European, Asian, and Latin American airline catering operations with the purchase of U.S.-based airline caterer Dobbs International. Menzies Aviation Group paid $105 million for Ogden Aviation Services, the world's largest independent provider of airport services, in late 2000. The following year, France-based Vinci SA acquired Worldwide Flight Services for $295 million.

The expected rapid consolidation among airport and aircraft service providers was slowed during the early 2000s by the events of September 11, 2001, the decline in air travel, and the stagnant economy, but the industry remained highly diversified. However, by the mid-2000s, several big players started to claim larger portions of the global shares of outsourcing work at airports, including Swissport International and Servisair/GroundGlobe. In the late 2000s, the more than 20,000 airports offered about 7 million jobs nationwide.

These large players were building global networks in preparation for a shift in the industry toward wholesale outsourcing of airport services. The legacy airlines, however, were not quick to shift paradigms and outsource large segments of services. Johan Orsingher noted in Air Traffic Management in the spring of 2005, "Ground control at airports has steadily evolved into comprehensive surface management. With passenger traffic still rising, an advanced system of ground control has been developed to help increase airport capacity and reduce delays. However, convincing airports and airlines to invest in such an advanced and costly system is proving to be an uphill battle."

Most major airlines kept ground-handling responsibilities in house at their major hubs and outsourced service on an airport-by-airport basis at other locations. Several factors influenced airlines' hesitancy to depend more heavily on contracted services. First, many of the legacy airlines had unionized employees that could not be easily replaced by contract workers. Second, airlines were in the midst of severe financial trouble during the mid- to late 2000s and attempted to cut costs at every turn. To do so, the airlines bid out specific segments to the lowest bidder for each service sector rather than contract wholesale services.

Although the hopes of outsourcers of developing global networks were still premature, there were signs that airlines were becoming more open to outsourcing options. Several airport service providers worked out regional service contracts, rather than individual airport-by-airport agreements, with the intention that regional contracts would eventually lead to global contracts with specific carriers. In addition, low-cost airlines, which were increasing their market share, did not invest in large staffs and were very open to outsourcing services. At the same time, low-cost airlines demanded simpler bottom-dollar contracts from airport service companies that were not as profitable. The major airlines were expected to gradually become more dependent on outsourcing services as passenger numbers continued to grow at the end of the decade and the need for coordinated ground support services became increasingly important to address airport congestion and security.

Current Conditions

According to the ITIA, U.S. airlines brought in a total of around $547 billion in 2010. At that time, the five largest airports in the United States based on passengers were Atlanta (Georgia) Hartsfield (89.3 million), Chicago O'Hare (66.7 million), Los Angeles International (59.0 million), Dallas/Ft. Worth International (56.9 million), and Denver International (52.2 million). New York John F. Kennedy, George Bush Intercontinental/Houston, Las Vegas McCarran International, San Francisco International, and Phoenix Sky Harbor International rounded out the top 10, according to the North America Airports Council International (NAACI). Industry experts were hopeful for an upswing in the industry into the second decade of the twenty-first century.

Industry Leaders

One of the leaders in airport and aircraft services in the early 2010s was Swissport International. Swissport made multiple acquisitions in the late twentieth and early twenty-first century, including DynCorp's DynAir segment. By 2007, Swissport delivered services to over 184 airlines in 40 countries and processed more than 70 million passengers annually. The company's North American operations provide total ground support services to both domestic and international carriers at more than 50 airports in the United States. Swissport offered a complete range of aviation-related technical services to the operations of commercial aircraft, including periodic checks, non-routine maintenance, structural inspections, repair and overhaul, and stripping and painting. Other specialized services included the repair, modification, and installation of transport aircraft avionics and navigation systems, including wind shear alerts, weather radar and radio altimeter systems, complete cargo handling, and fueling services for commercial and general aviation customers. In 2004, Swissport purchased Groundstar, a U.K.-based airport services firm. London-based equity firm Candover purchased a majority share of privately owned Swissport in February 2002. In August 2005, Ferrovial acquired Swissport International from Candover Partners.

Servisair, formerly GlobeGround North America LLC and then Servisair/GroundGlobe, had airport support operations in 142 locations in 31 countries. Servisair handled about 102 million passengers annually. Servisair North America, headquartered in New York, provided services to over 35 major U.S. airports. Servisair was wholly owned by the French firm Penauille Polyservices.

The purchase of Ogden Aviation Services extended the U.S. presence of another U.K. firm, Menzies Aviation Group. In the mid-2000s, Menzies provided support services at nine major U.S. airports.

In the early 2010s, Gate Gourmet, Inc. was one of the world's largest airline caterers, providing in-flight food service for more than 250 domestic and international airlines. In 2011, Gate Gourmet operated 100 flight kitchens in 25 countries. Average production was more than 500,000 meals each day, or 200 million meals each year. The company operated in about 30 major U.S. airports. Customers included American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines.

One of the premier suppliers of aircraft maintenance, repair, and overhaul services has been Goodrich's Aviation Technical Services, formerly known as Tramco Inc. The BF Goodrich Aerospace subsidiary has performed maintenance for the fleets of Federal Express, Southwest Airlines, and United Parcel Service (UPS). In 2004, the Everett, Washington-based company's Airframe Systems division, which included aviation technical services, posted revenue of $1.63 billion, about one-third of the company's total revenue of $4.72 billion.

Created in 1981 as a subsidiary of AMR Corp., Worldwide Flight Services (formerly known as AMR Services Corp.) provided flight operations services, including passenger services, cargo handling and warehousing, cabin services and facility cleaning, fuel services, and aircraft handling services. The company also operated flight service centers, marketed used aircraft, provided ground transportation services, and offered security services. Castle Harlan Inc., which acquired Worldwide Flight in 1999, agreed to sell the ground services provider to Vinci SA for $295 million in 2001. In 2007, Worldwide Flight handled cargo at 115 airports around the world and provided services at over 50 major U.S. airports.


According to the NAACI, U.S. airports provided nearly 7 million jobs to the communities they serve. Most of the employment in the airport, flying field, and airport terminal services industry was concentrated in the maintenance, repair, and aircraft service segment. Companies that are secondary providers of services offer additional employment in this industry category. These companies generally include the food, beverage, and other airport terminal services companies.

In the late 2000s, approximately 1 in every 15 people employed in the United States owed his or her job to civil aviation, with total jobs attributable to U.S. airports estimated at 6.7 million. Job opportunities in this industry varied by occupation. Sources estimated that for every $1 billion invested in airport development, 50,000 jobs were created and sustained. Due to an expected shortage in qualified applicants, the job market for aircraft mechanics was expected to be favorable through the 2010s. Job opportunities were also predicted to be good in entry-level positions, where job turnover has been high, such as baggage handlers, aircraft and interior cleaners, and food service workers.

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