Dropped flights may hurt airport expansion and modernization

Mumbai /New delhi: The developers of the new airports in Bangalore and Hyderabad have been caught on the back foot with domestic carriers cancelling more than 1,300 flights a week due to high fuel costs, less than six months after these facilities opened for business.
Such cancellations, which account for some 15% of the traffic handled by the country’s top six airports, are expected to lower revenues and hinder their ability to raise money for modernization and expansion.
The new airports are designed to handle an anticipated rise in the number of flights and passengers that the old facilities weren’t geared for.
Four of these airports—in New Delhi, Mumbai, Bangalore and Hyderabad—are at various stages of modernization and capacity expansion to handle a combined 100 million passengers a year by 2010, up from about 50 million passengers at present.
For instance, the new Bangalore airport, built by a consortium led by Siemens AG, needs money to construct a second runway while the Mumbai airport is upgrading its terminal facilities to handle 16 million additional passengers by 2010.
“The reduced number of commercial flights has posed a threat to the viability of these new airport projects,” said a senior executive with a leading private bank, asking not to be named because the bank could be a potential lender for some of these projects.
“Since 45% of the airports’ total revenues are aeronautical charges and 50% of that comprise landing and parking charges, there could be an impact of 4-5% on total revenues,” said an aviation analyst with a Chennai-based brokerage.
25/09/08 P.R. Sanjai and Tarun Shukla/Livemint

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Categories: Airports Sep 2008