90 per cent Indian airports run in loss

These include Bhopal, Jaipur and Amritsar, which have regular flights

The Airports Authority of India’s (AAI) makes money from only 13 of the 125 airports it manages across the country.

AAI earned record revenue of Rs 10,824 crore in 2015-16 and made a profit of Rs 2,537 crore. The public sector enterprise paid a dividend of Rs 560 crore to the Centre.

Almost a third of this income, or Rs 3,379.26 crore, came from the AAI’s share of revenue in private airports. Delhi International Airport must share 45.99 per cent of its revenue with the AAI every year and Mumbai International Airport 38.7 per cent. The Bengaluru and Hyderabad airports pay AAI four per cent of their revenue as annual concession fee.

There is not a single aircraft movement on any given day in 30 of the 109 loss-making airports. 

The government’s regional air connectivity scheme plans to put such airports back into operation by subsidising airlines to fly from these. 

Loss-making airports also include cities such as Bhopal, Jaipur and Amritsar, which have regular flight movement.

“Airports have posted losses on low revenue generation because of lack of traffic. The revenue was not enough to meet the expenditure of these airports,” an AAI official said.

“Investment decisions, especially on airports with viability challenges, have no sound commercial logic. An urgent restructuring of AAI is necessary,” said Kapil Kaul, chief executive officer, South Asia, at aviation consulting firm CAPA.

AAI has decided to focus on major airports, while hoping the ones in smaller cities will become busier with the regional connectivity scheme. 

It has tied up with Boston Consulting Group to undertake a pilot project in 10 airports — Kolkata, Chennai, Lucknow, Varanasi, Bhubaneswar, Pune, Goa, Guwahati, Coimbatore and Thiruvananthapuram — to study the time taken for check-in, security check and luggage screening so that passengers can spend more time in non-aeronautical activities. 

Of the 13 profitable AAI airports, major ones such as Kolkata, Chennai, Lucknow, Ahmedabad and Goa top the list. 

“We are trying to improve the passenger experience at these airports and to increase utilisation of airport space for non-aeronautical activities,” AAI Chairman Guruprasad Mohapatra said. 

The recent Union Budget announcement to amend the AAI Act for allowing it to use its land bank will help shore its non-aeronautical revenue. 

Now the huge parcel of land available can also be used to build multiplexes or shopping malls according to demand. 

This will be helpful to shore up its non-aeronautical revenue. 

AAI earns a very insignificant amount of revenue from non-aero revenue and it primarily comes from the airports in Tier-1 cities. In 2015-16 AAI earned Rs 1,202.81 crore from non-aero sources, 11 per cent of its total revenue of Rs 10,824 crore.