Aviation slowdown to squeeze airports authority's revenues

New Delhi: Closure of its airports in Hyderabad and Bangalore, coupled with slowdown in the aviation sector, has made the Airports Authority of India (AAI) jittery over revenue collection in financial 2008-09. In 2007-08, it collected Rs 4,000 crore and now the authority feels that even meeting this figure would be good enough in this turbulent year, when record oil prices have put a question mark on airlines' survival and pulled down growth rate of domestic passenger traffic.
Airport developers' revenues come from two main areas — aircraft movement and passenger fees — both of which have drastically fallen and are likely to impact their bottomlines. Private developers like GMR and GVK are also impacted by this slowdown. While they were entitled to raise airport charges by 10% this year, the aviation ministry has not allowed that so far because of airlines' poor health.
What makes AAI's case worse is that Hyderabad and Bangalore have got private airports, so stopping the revenue stream from these two. It's a double whammy for the government agency since projects worth Rs 3,400 crore have to be implemented this fiscal as part of the Rs 12,500 crore to be spent on building infrastructure during the 11th Five Year Plan.
Airlines are in a bad shape financially and delayed payments from some players have become a common practice today, which is bothering all airport developers.
16/07/08 Saurabh Sinha/Times of India

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Categories: Airports Jul 2008