-Given the slow progress on the ongoing Rs 38,000-crore capacity expansion at the four largest metro airports, and also the surging traffic, the snaky queues will continue at least till 2023, warns a report.
The four largest airports -- New Delhi, Mumbai, Bengaluru and Hyderabad -- handle more than half of the traffic and are operating at 130% of their installed capacity. These airports are under a record Rs 38,000-crore capex but the capacity will not come up before end-2023, says a Crisil report.
“With the dip in traffic growth largely behind, we expect congestion at the top four airports of New Delhi, Mumbai, Bengaluru and Hyderabad, which handle more than half of the load, to continue till about FY23,” says the report.
Already these airports are operating at over 130 percent of installed capacity, and the ongoing healthy traffic growth this operating rate is expected to rise further in the next 12 months.
Centre agrees to include 3 Odisha airports under Udan scheme
“Operationalising of capacities in the following two fiscals will bring down utilisation levels albeit still high at over 90% by fiscal 2023 and that is despite an unprecedented Rs 38,000 crore capex being undertaken by the operators of these airports over five fiscals 2020-24,” says the report.
Despite this unprecedented capex that is debt-funded, ratings are likely to be stable given the strong cash flows expected due to healthy traffic growth, low project risks associated with the capex and improving regulatory environment, notes the report.
“Capacity at these four airports will increase a cumulative 65% to 228 million annually (from 138 million now) by fiscal 2023. However, traffic is expected to grow strong at up to 10% per annum over the same period. Since additional capacities will become operational in phases only by fiscal 2023, high passenger growth will add to congestion till then,” warn the report.
High utilisation will ride on pent-up demand (accumulated in 2019 as traffic was impacted with the grounding of Jet Airways) and one-off issues with new aircraft of certain airlines.
09/02/20 PTI/Moneycontrol.com
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The four largest airports -- New Delhi, Mumbai, Bengaluru and Hyderabad -- handle more than half of the traffic and are operating at 130% of their installed capacity. These airports are under a record Rs 38,000-crore capex but the capacity will not come up before end-2023, says a Crisil report.
“With the dip in traffic growth largely behind, we expect congestion at the top four airports of New Delhi, Mumbai, Bengaluru and Hyderabad, which handle more than half of the load, to continue till about FY23,” says the report.
Already these airports are operating at over 130 percent of installed capacity, and the ongoing healthy traffic growth this operating rate is expected to rise further in the next 12 months.
Centre agrees to include 3 Odisha airports under Udan scheme
“Operationalising of capacities in the following two fiscals will bring down utilisation levels albeit still high at over 90% by fiscal 2023 and that is despite an unprecedented Rs 38,000 crore capex being undertaken by the operators of these airports over five fiscals 2020-24,” says the report.
Despite this unprecedented capex that is debt-funded, ratings are likely to be stable given the strong cash flows expected due to healthy traffic growth, low project risks associated with the capex and improving regulatory environment, notes the report.
“Capacity at these four airports will increase a cumulative 65% to 228 million annually (from 138 million now) by fiscal 2023. However, traffic is expected to grow strong at up to 10% per annum over the same period. Since additional capacities will become operational in phases only by fiscal 2023, high passenger growth will add to congestion till then,” warn the report.
High utilisation will ride on pent-up demand (accumulated in 2019 as traffic was impacted with the grounding of Jet Airways) and one-off issues with new aircraft of certain airlines.
09/02/20 PTI/Moneycontrol.com
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