Bial postpones plans for expansion

Bangalore: Bangalore International Airport Ltd, or Bial, the operator of the tech city’s new airport, deferred its expansion plans and slashed its passenger estimate by nearly a quarter as a global—and Indian—economic slowdown and increased domestic fares dent traffic.
Bial chief executive officer Albert Brunner said the civil aviation ministry not granting it permission to charge passengers a user development fee, or UDF, and a decline in the number of flights had contributed to the delay in expansion plans.
The airport operator had sought to levy a UDF of Rs675 per domestic passenger. Bial is incurring a loss of Rs22-23 crore every month, said Brunner, who said airlines owed it Rs59 crore.
The expansion plan, which includes another terminal and a second runway, involving an investment of Rs 4,000-5,000 crore, would take four-five years. “At present the terminal we have is sufficient for another two years,” Brunner said.
Bial had planned an interim low-cost terminal before it embarked on building the second terminal and runway, but with the slowdown, it plans to take a decision in three months, based on the results of a study it is conducting.
Bial, which opened in May, now expects to handle 9.2 million passengers by March, compared with the 13 million it had forecast at the time it opened for traffic. Four million passengers have used the airport so far.
The pace of India’s economic growth has slowed since the airport’s inauguration while major economies are headed for recession in the wake of the financial industry turmoil that spread from the US. Loss-making domestic airlines increased fares to counter a steep rise in jet fuel prices earlier in the year, also hurting passenger growth.
13/11/08 K. Raghu/Livemint

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Categories: Airports Nov 2008