It’s not just the airlines that have been hit by the falling air traffic demand. Tumbling passenger movements have crashed the aeronautical revenues of airports too.
BANGALORE: It’s not just the airlines that have been hit by the falling air traffic demand. Tumbling passenger movements have crashed the aeronautical revenues of airports too. And that is forcing them to push up their non-aeronautical revenues.
Aeronautical earnings of airports include, besides passenger service fee (PSF) and user development fee (UDF), landing and parking charges. These charges are levied on airlines, which recover it from passengers.
Non-aeronautical income constitutes earnings from retail, food & beverages, car parking, ground handling and other such services. GMR Hyderabad International Airport Ltd (GHIAL), which operates the Rajiv Gandhi International Airport, has seen its passenger traffic drop by almost 18% since May from 22,000 passengers per day to 18,000 passengers per day in August.
P S Nair, CEO, GHIAL says this is expected to further dip in September. “Our aeronautical revenue, which is 65% of our total revenues, has been dwindling over the last few months because of a downturn in the air travel demand,” says Nair.
GHIAL’s aeronautical revenues have fallen despite the government allowing it to levy UDF of Rs 375 per passenger on domestic flyers from August 22.
The airport has already been charging UDF of Rs 1,000 per passenger since it began operations early this year. Bengaluru International Airport Ltd (BIAL) has not yet received permission from the government to levy UDF on domestic flyers.
Philip Cash, airport director, Mumbai International Airport Ltd (MIAL), says his airport’s domestic passenger traffic has slipped 15% in August.
“The current uncertainty in the market has taken a toll on business travel, which is pushing down air travel. All this has put tremendous pressure on our aeronautical income, which has seen a corresponding fall,” said Cash.
Cash, however, adds that international passenger traffic was still showing some growth.
As per data released by the ministry of civil aviation (MCA), the total number of flyers on domestic scheduled airlines dropped by around 17% in August to 29.22 lakh over last year. It has slid 29% since May, when airlines flew 41.16 lakh passengers.
Thus, with fewer air travellers squeezing revenues of airport operators, they are looking to boost their income by turning their attention to non-aeronautical services. For instance, GHIAL is trying to expedite the development of its landside. It has already got the approval of the government to set up an aero hub on 5,500 acres it owns. “Since we have a huge area of landside available, we are trying to offset part of the loss in aeronautical revenues by developing that land. We want to increase our non-aeronautical income to 50% in the next two year from the current 25-35%,” says Sourabh Jain, associate general manager (corporate planning), GHIAL.
However, Albert Brunner, CEO of BIAL, is not in a hurry to utilise the landside. “We have some landside but that can be developed later. We want the government to enhance the airport tariff so that the recovery on investment is faster,” he says. p_sharma@dnaindia.net
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