Cost per Enplaned Passenger

1. Introduction

Cost per Enplaned Passenger (CPE) is the average airline payment per enplaned passenger at a given airport. It is cited in FAA Form 127 and CAFRs in airport finance, regulatory proceedings, and airline decision-making.

CPE provides only partial information about an airport's financial health and may wish to consider alongside other metrics such as breakeven CPE, percentage changes in airline payments, airline payments as a percentage of total revenues, and CPE as a percentage of average fare revenues. However, as it is applicable across airports, CPE remains a benchmark used across airports (FAA Form 127) for comparing airport cost levels.

CPE is calculated using the following formula:

CPE = Total Passenger Airline Payments / Total Enplaned Passengers

CPE is always expressed in nominal dollars (not inflation-adjusted) for the relevant fiscal year. as a CPE increase may reflect inflation, operational changes, capital programs, or a combination thereof.

2. What Is Included in CPE

CPE comprises airline payments across three operational areas of an airport:

Airfield Area

• Landing fees from passenger airlines

• Fuel flowage fees (where applicable; airport-specific)

Apron Area

• Aircraft parking fees

• Hardstand fees

• Jet bridge fees

• Ground power and Pre-Conditioned Air (PCA) fees

• Hydrant fueling charges (where paid to airport rather than third parties)

Terminal Area

• Terminal space rent (gates, holdrooms, ticket counters)

• Terminal user fees

• FIS (Facilities and Infrastructure Services) fees

• Customs and immigration fees

• International terminal fees (where applicable)

Excluded from CPE

• All-cargo carrier landing fees (reported separately)

• General Aviation (GA) payments

• Into-plane fueling paid to third-party fuel vendors

• Ground handling charges paid to third-party contractors

• Utility reimbursements and cost recovery charges (varies by airport definition)

Airports may wish to verify the specific scope of CPE at individual airports, as some airports may have unique definitions that include or exclude certain categories of payments.

TABLE: CPE Components by Airport Area

3. Finding CPE Data

CPE data is available from multiple sources with varying reliability and completeness:

Reliable Sources

Audited Financial Statements: The management discussion and analysis (MD&A) section and statistics table of an airport's CAFR (Comprehensive Annual Financial Report) provide CPE data. The statistics table typically breaks down passengers and airline revenues by fiscal year (10-year history).

Bond Official Statements: Consultant reports prepared for bond offerings include historical CPE and projections. These reports are detailed and prepared by experienced airport finance consultants.

Bond Rating Agency Reports: Moody's and S&P publish detailed analytical reports that include CPE analysis, historical comparisons, and peer benchmarking.

FAA Form 5100-127: Starting in Fiscal Year 2009, all large hub and medium hub airports file this form with the FAA. It provides a standardized, audited calculation of CPE, enabling direct comparison across airports without accounting methodology differences.

Less Reliable Sources

• Operating budgets (may contain projections rather than actuals)

• News articles and press releases (often incomplete context)

• Industry surveys and reports (varying methodologies)

4. Understanding CPE Calculation

4.a Recognizing Airline Revenues

A source of CPE variation across airports is how airline revenues are recognized and settled. Two mechanisms create distortions:

Ratemaking Methodology Impact

The methodology used to set rates (Residual, Compensatory, Hybrid Residual, or Hybrid Compensatory) directly determines the CPE level reported, even if the airport's underlying operational performance remains unchanged.

Example: The same airport operating under Residual ratemaking might report CPE of $9.00, while under Compensatory ratemaking the same airport would report CPE of $12.00. This $3.00 difference is entirely due to methodology, not performance deterioration.

TABLE: Ratemaking Methodology and CPE Impact

Year-End Reconciliation and Timing Distortion

18 of 31 large-hub airports using Residual ratemaking (DWU classification, 2025) perform year-end settlement with airlines. Depending on whether settlement occurs in the same fiscal year or is transferred to the next year, CPE can vary by up to 120% (e.g., Airport A ($9.00 Residual) vs Airport B ($19.80 Compensatory) (FAA Form 127 FY2023)):

Example Scenario: An airport budgets $100M in airline revenues with 15M enplaned passengers, projecting CPE of $6.67. However, at year-end, the airport records only $80M in payments, with $20M owed to airlines as a credit (settlement refund). If the $20M credit is transferred to the next year instead of being recognized in the current year, reported CPE becomes $10.00 ($80M / 8M) rather than $6.67. This is purely a timing issue, not an operational change.

Some airports use a two-year settlement process (settlement occurs 18 months after fiscal year-end), creating even greater timing distortions.

Revenue Sharing and Settlement

Gross CPE differs from Net CPE when airlines receive post-year revenue sharing credits. Most airports report Net CPE (after revenue sharing adjustments). Understanding whether CPE is gross or net for accurate trend analysis.

Airport-Specific Definitions: ATL Example

Atlanta Hartsfield-Jackson International Airport (ATL) demonstrates how airport-specific definitions can complicate CPE comparisons. ATL reports both:

• City CPE: Calculated using only Airline Cost Centers (excludes terminal costs allocated to concessionaires)

• All-In CPE: Calculated using ALL airline payments, including terminal facilities and related costs

When analyzing ATL data, DWU recommends using All-In CPE for consistency with other large hub airports and historical ATL comparisons. This distinction must be documented when presenting ATL CPE data.

5. Factors That Determine CPE Level

CPE is determined by multiple factors, each of which can influence the reported metric:

5.a Ratemaking Methodology

As discussed in Section 4, the choice of methodology (Residual, Compensatory, Hybrid Residual, Hybrid Compensatory) directly determines CPE independent of operational changes. Use the four-category framework consistently when categorizing airports.

5.b Non-Airline Revenue Performance

Airports with non-airline revenues above the median (concessions, parking, rental cars, advertising) can subsidize airline rents, resulting in lower CPE. Non-airline revenue performance depends on:

• Passenger volume and passenger mix (international vs. domestic, connecting vs. O&D)

• Terminal design and layout (efficiency of concession spaces)

• Market competition (proximity to alternative ground transportation)

• Concession contract terms and management

Airports with non-airline revenues < large-hub median (DWU CPE database, FY2024) have higher CPE for the same airline costs.

5.c Capital Program Phase

influencing CPE projections. CPE behavior changes across phases:

• Pre-construction: CPE stable or declining as non-airline revenues grow; airlines pay steady rates

• During construction: CPE increases as capital costs are added to airline rates while construction reduces terminal revenues

• Post-opening: CPE declines as new revenues ramp up; passenger-intensive facilities (e.g., new terminal) generate concession and parking revenues exceeding large-hub median of $8.50 per passenger (DWU CPE database, FY2024)

• Mature: CPE stabilizes at new baseline

5.d Enplaned Passenger Volume

Scale effects. e.g., COVID decline: 10% enplanement drop yielded 13% CPE rise at 25 large-hubs (FAA 127 FY2020) because fixed costs (administrative, maintenance, debt service) are spread across fewer passengers. Conversely, 10% enplanement growth reduced CPE by 8% at 25 large-hubs (FAA Form 127 FY2021-2023)

5.e Cost Structure and Geography

Regional differences in labor costs, weather patterns, facility age, seismic requirements, and environmental regulations create baseline differences in CPE:

• High-cost cities (New York, San Francisco, Boston) have CPE 50% above large-hub median (FAA Form 127, FY2024)

• Older facilities require higher maintenance spending

• Cold-weather airports have higher snow removal and winterization costs

• Seismic-zone airports have higher structural requirements

5.f Airline-Funded vs. Airport-Funded Facilities

When airlines fund their own facilities (e.g., Delta's renovated Terminal at JFK, or the T1 consortium at IAD), those facility costs do not appear in airline payment calculations and therefore do not increase CPE. Understanding the source of capital funding when interpreting CPE trends and making peer comparisons.

6. CPE Comparisons: Caveats and Methodology

An emerging area of focus is the risk of cross-airport CPE comparisons without accounting for they ignore critical differences in how CPE is calculated, recognized, and classified. The following factors can produce up to 120% differences (e.g., Airport A ($9.00 Residual) vs Airport B ($19.80 Compensatory), FAA Form 127 FY2023) in CPE between structurally similar airports:

Ratemaking methodology (Residual vs. Compensatory)

Revenue sharing formulas and settlement timing

Capital costs recognition and allocation

Capital program phase (pre-, during, post-construction)

Facility scope (terminal-only vs. all-airline-funded operations)

Airline-funded facilities exclusion

Geographic cost differences

Hub type and airline mix

Passenger mix and non-airline revenue potential

CPE definition (gross vs. net, all-in vs. city)

When CPE Comparisons ARE Appropriate

• Same airport over time: Examining an individual airport's CPE trend is appropriate if the calculation methodology is consistent year-over-year

• Peer group with full context: Comparing airports with similar methodologies and capital phases (e.g., mature hub airports using Compensatory ratemaking)

• Projected vs. actual: Comparing an airport's official statement projections to actual results

7. FY 2024 Actual CPE Data from DWU Database

The following table presents CPE data for Large Hub airports based on audited financial statements and FAA Form 5100-127 data for FY 2024:

TABLE: FY 2024 Large Hub Airport CPE by Category (Source: DWU Database, Audited Financial Statements)

Key observations:

• ATL has the lowest CPE ($3.93), reflecting Residual ratemaking and non-airline revenues above the median

• New York area airports (JFK $36.01, EWR $31.67, LGA $23.20) have the highest CPE, driven by high costs and Compensatory ratemaking

• West Coast airports (SFO $32.14, LAX $30.16) are elevated due to capital programs and high regional costs

• Hub airports using Compensatory ratemaking cluster in the $12-$16 range

8. COVID-19 Impact on CPE

The 2020-2022 period produced dramatic CPE volatility that distorted historical relationships. Understanding these anomalies is critical for accurate trend analysis:

2020: Pandemic Peak

• JFK: $66.46 (normal ~$35-$38)

• LGA: $61.98 (normal ~$20-$23)

• EWR: $59.29 (normal ~$28-$32)

• ORD: $43.36 (normal ~$28-$30)

Passenger traffic collapsed 70-80% while fixed costs remained. Airlines were few and far between.

2021: Delayed Peaks

Many airports experienced delayed CPE peaks as settlement credits from 2020 carried into fiscal 2021:

• BOS: $52.07

• LAX: $43.73

Passenger recovery was uneven; cargo-heavy airports recovered faster.

2022: Sharp Decline and Anomalies

CPE declined sharply as passenger volumes recovered. However, some airports recorded anomalously low CPE due to deferred settlements and revenue sharing:

• ATL: $1.04 (settlement credits from prior years)

• FLL: $8.02 (temporary settlement adjustment)

These figures are not representative of normal operating conditions.

2023-2024: Normalization with Structural Changes

CPE has largely normalized to pre-pandemic baselines by FY 2024. However, major capital programs at several airports (LAX expansion, DFW completion, EWR modernization) have created new structural increases in CPE that are not reversible.

Key insight: Data from 2020-2022 should be treated as anomalous in all historical comparisons and projections. Trend analysis should focus on pre-2020 data and FY 2023-2024 normalized levels.

9. Breakeven CPE

Breakeven CPE is a useful supplementary metric that removes the effect of non-airline revenues from CPE. It represents the airline payment per passenger that would be required if non-airline revenues were zero.

Formula:

Breakeven CPE = Reported CPE - (Net Non-Airline Revenues / Enplaned Passengers)

Example: Los Angeles International Airport (FY 2024)

• Reported CPE: $30.16

• Net Non-Airline Revenues: $367 million

• Enplaned Passengers: 39.7 million

• Non-Airline Revenue per Passenger: $367M / 39.7M = $9.24

• Breakeven CPE: $30.16 - $9.24 = $20.92

This indicates that without concession and parking revenues, LAX would need to charge airlines $20.92 per enplaned passenger to cover operating and capital costs. Strong non-airline revenues subsidize airline rents by $9.24 per passenger.

Breakeven CPE is especially useful when comparing airports during capital program phases, as it isolates airline cost trends from non-airline performance fluctuations.

10. Supplementing CPE

While CPE is the primary metric, it should always be supplemented with additional analysis:

Recommended Supplementary Metrics

1. Percentage change of airline payments: Shows year-over-year growth independent of passenger volume changes

2. Airline payments as % of total revenues: Indicates the role of non-airline subsidies in airport finances

3. CPE as % of average fare revenues: Relates airport charges to typical passenger ticket prices (A4A data)

4. Breakeven CPE: Isolates airline costs from concession/parking performance

Other Emerging Metrics

• All-in cost per passenger including third-party costs (taxiing, delays, ground handling)

• Adjusted CPE for tenant-financed facilities

• CPE by airline (analyzing mix of legacy vs. ULCC carriers)

Despite these alternatives, CPE remains the most important metric because of its reliability, consistency across airports, data availability, and use in regulatory proceedings and bond official statements. Familiarity with CPE dynamics is essential for anyone involved in airport finance.

11. CPE and Airline Decision-Making

A common misconception is that CPE significantly influences airline route decisions. In reality, airport costs represent a small portion of airline operating expenses and rarely determine route viability.

Context: Airline Operating Costs

According to Air Transport Association (A4A) data, landing fees and terminal rents represent only approximately 5% of total airline operating expenses. Even a 50% increase in CPE would increase total airline costs by only 2.5%, rarely affecting route profitability.

Empirical Example: Cincinnati Dehubbing

Delta Air Lines' 2020 decision to dehub Cincinnati (CVG) demonstrates that CPE is not the primary route decision factor. CVG had among the lowest CPE in the country (<$5), yet Delta still exited, reducing enplanements from approximately 11.3 million (CY 2005) to 2.9 million (CY 2013) and increasing CPE to approximately $10.00. CPE was irrelevant to the decision, which was driven by capacity utilization and network design.

Actual Fare Revenue Impacts

Airlines make route decisions based on fare revenue potential and competitive positioning:

• SFO vs. OAK/SJC: SFO has CPE of $32.14 but commands premium fares ($400-600 one-way). Oakland (OAK) has CPE of $14.32 but attracts only budget carriers ($80-120 one-way). SFO remains profitable.

• BOS vs. MHT/PVD: Boston has CPE of $21.72 but dominates regional traffic. Manchester (MHT) and Providence (PVD) have lower CPE but capture minimal traffic.

Airline-Specific CPE Sensitivity

Different airlines exhibit different CPE sensitivity:

• Legacy carriers (AA, DL, UA): Average one-way fare $260-270 per A4A data. CPE is <2% of fare revenue; relatively insensitive.

• ULCCs (Spirit, Frontier, Allegiant): Average one-way fare $100-120. CPE is 4-6% of fare revenue; significantly more sensitive.

DB1B (U.S. Department of Transportation airline survey) data confirms these patterns: legacy carriers operate extensively from high-CPE airports, while ULCCs concentrate at low-CPE facilities.

Key Takeaways

Cost per Enplaned Passenger is the single most important and most widely used metric in airport finance. However, it must be understood in context of the factors that determine it: ratemaking methodology, capital program phase, non-airline revenue performance, passenger volume, settlement timing, and geographic cost structure.

Cross-airport CPE comparisons are dangerous without detailed knowledge of airport-specific definitions and methodologies. Same-airport trend analysis and peer group comparisons with full context are appropriate uses of CPE.

CPE should always be supplemented with breakeven CPE, percentage changes in airline payments, and non-airline revenue data to provide a complete picture of an airport's financial dynamics.

For investors, regulators, consultants, and analysts, mastery of CPE calculation and interpretation is essential to understanding airport financial health and sustainability.

About DWU Consulting

DWU Consulting LLC provides specialized airport finance consulting services with deep expertise in financial analysis, rate setting, and aviation data. Dafang Wu has more than 25 years of airport consulting experience, currently serving as a consultant to ACI-NA and numerous U.S. airports.

For more information, visit https://dwuconsulting.com or contact DWU directly for consulting services, data subscriptions, and custom analysis.

Scope & Methodology

This article examines Cost per Enplanement (CPE) as a fundamental metric for understanding airport operating efficiency and financial performance. CPE is calculated by dividing total operating expenses (or capital costs) by the number of enplaned passengers in a given period. The metric enables benchmarking across airports of different sizes and market conditions. This article explains CPE calculation methodologies, illustrates how CPE varies across airport types and peer groups, and contextualizes CPE within DWU's broader framework for airport financial analysis. CPE is one component of the three-dimensional financial analysis framework described in our companion article; practitioners should understand how CPE (GAAP-based) differs from other cost metrics used in rate-setting and bond covenant calculations.

¹ FAA enplanement data from ACAIS (Air Carrier Activity Information System) and published airport traffic reports
² Airport operating cost and CPE calculations from annual financial reports (CAFR/ACFR filings)
³ Non-aeronautical revenue impact and residual rate-setting methodology: ACI-NA and ACRP research

Changelog

ACRP Research Resources

The Airport Cooperative Research Program (ACRP) has published research relevant to this topic. The following publications provide additional context:

• Report 23 — "Passenger Processing and Terminal Capacity" (2009). Provides framework for understanding passenger flow, terminal space requirements, and associated cost allocation methodology underlying CPE calculations.
• Web-Only Document 22 — "Valuation of Passenger Time in Airport Planning" (2008). Provides methodology for valuing passenger time, relevant to passenger processing facility planning and cost justification.

Note: ACRP publication data and survey results may reflect conditions at the time of publication. Readers should verify current applicability of specific data points.

FAA Regulatory Resources

The following FAA resources provide authoritative guidance on cost per enplaned passenger:

• FAA Passenger Boarding Data — Official enplanement data used in CPE calculations
• Rates and Charges Policy — Governs rate-setting that determines CPE levels

Related DWU AI Articles

• Three Dimensions of Airport Finance — Understand how CPE metrics integrate with GAAP, rate resolution, and bond document frameworks
• Airline Rate Methodologies — How CPE affects residual and compensatory rate calculations
• Airport Financial KPIs and Benchmarking — CPE in context of other financial performance metrics
• Airport Debt Service and Coverage — How CPE trends impact debt service coverage ratios
• Enplaned Passengers — Detailed methodology for passenger counting and forecasting
• Airport Financial Reporting — GAAP framework for airport operating expense reporting