Spatial spillovers in U.S. airport non-aeronautical revenue performance

Non-aeronautical revenue has become an increasingly vital component of airport financial sustainability, especially as airports face growing pressure to diversify income streams beyond traditional aeronautical sources. As airports expand retail, parking, and commercial services, competition for these revenue opportunities has intensified, particularly among airports in close geographic proximity. This study investigates the spatial interdependence in non-aeronautical revenue generation among 100 U.S. hub airports from 2010 to 2023. By applying the generalized spatial two-stage least squares method to the spatial Cliff-Ord type model, we identify negative spatial spillover effects in non-aeronautical revenue among neighboring hub airports. Our findings suggest that neighboring hub airports experience spatial competition for non-aeronautical revenue. We conduct a sensitivity analysis to assess the robustness of the negative spatial spillover effects, which remain consistent even after controlling for shared governance structures. By examining spatial interdependence among airports, this study extends the literature on airport competition into the non-aeronautical revenue domain. These findings highlight the need for airport authorities and policymakers to implement integrated strategies that explicitly incorporate spatial interdependencies across regional airport systems.