Airports fly high on non-aero revenue

Mumbai: The share of non-aeronautical earnings in airports' total revenue is swelling as crashing air traffic movements (ATMs) crimps their aeronautical revenue and income generation from non-airline business goes up.
Aeronautical charges are directly related to airport infrastructure and levied for the use of an airport's runway, apron and terminal facilities by passengers, while non-aeronautical income is earned through rentals from commercial outlets or concessionaires within airport terminals and from passengers.
Last quarter saw the three major Indian airports -- Mumbai, Delhi and Hyderabad -- increase their revenues from commercial rentals, advertising on their premises, parking fee and other such services.
This pushed up the percentage of Mumbai International Airport Ltd's (MIAL) and Delhi International Airport Ltd's (DIAL) non-aeronautical revenue by 10 percentage points to 39% and 65% in the June quarter this year from 29% and 55% respectively last year.
Hyderabad airport, which began operation in March last year, has also seen its non-aeronautical revenues jump to 44% of its total revenues in the same quarter. It was negligible a year back.
Higher non-aeronautical revenue helps airports reduce dependence on income from airport charges, which can fluctuate with the swings in the ATMs. It also cross subsidises airport charges, making them competitive for airlines.
Over the last one year, airports have been witnessing drops in the ATMs, with airlines cutting back capacity to tune it air passenger traffic growth. According to the latest data put out by Airports Authority of India (AAI), total ATMs in May were down 4.6% year-on-year, while passenger traffic slipped 3.2%.
18/08/09 Ramiya Bhas/Daily News & Analysis

To Read the News in full at Source, Click the Headline

Categories: Airports Aug 2009