In airport leasing, which approach involves higher risk but potentially higher profits for the airport?

The approach that involves higher risk but potentially offers higher profits for the airport is the engagement of a development company management. This method typically entails a more entrepreneurial strategy, where the airport collaborates closely with private developers to create, manage, and operate facilities or services. Such arrangements can lead to significant financial upside if the development succeeds, as development companies often invest capital upfront and focus on maximizing return on investment through innovative solutions and aggressive marketing.

In contrast, traditional management by the airport usually implies a more conservative and regulated approach, where the airport maintains direct control over the operations. This model may lead to lower risks since the airport is likely to rely on established processes and steward public resources, but it also typically results in lower profit potential as it lacks the flexibility and aggressive profit-seeking behavior of development companies.

Choosing institutional operator engagement often leads to stable returns but is still managed in a way that reduces risk for the airport, as it usually involves aligning with established operators who have a set level of engagement.

Private lease agreements can mitigate risk since they often transfer operational responsibilities to the lessee, thus providing predictable revenue streams for the airport without taking on the operational risks directly. However, this model usually does not capitalize on the potential for high profits compared to more engaged development