Airports Authority of India plans Rs 4,000-cr capital expenditure in FY24

Building 2 greenfield airports, upgrading 23 existing ones

The Airports Authority of India (AAI) plans to spend Rs 4,000 crore in 2023-24 (FY24) to build two greenfield airports and upgrade 23 existing ones.
 
The planned capital expenditure (capex) will assist those Indian carriers that plan to add more than 130 planes in FY24 to handle the country’s air traffic boom. However, the FY24 capex will be 22.71 per cent lesser than the preceding financial year’s Rs 5,175 crore.
 
When asked if it plans to raise funds externally to support its capex plan for FY24, the AAI responded that “most capex” for the current financial year is “planned to be met through internal resources (revenues)”.

 

The AAI is currently building greenfield airports at Hirasar and Dholera in Gujarat. Hirasar airport construction is expected to be completed by December this year. Dholera’s is estimated to be over by December 2025.
 
The AAI said that under the capex plan, it is revamping 23 airports across the country. Of these, 16 will be upgraded this year: Ayodhya, Darbhanga, Dehradun (Phase II), Fursatganj, Gorakhpur, Gwalior, Jabalpur, Kanpur, Kolhapur, Port Blair, Pune, Saharanpur, Surat, Tezu, Tiruchirappalli, and Tuticorin.
 
According to the AAI, six airports will be upgraded by 2024: Goa, Imphal, Leh, Patna, Rewa, and Vijayawada.
 

Chennai airport’s Phase II upgrade will be completed by July 2025.
 
“We plan to incur capex of Rs 4,000 crore in FY24. The capex plan for 2024-25 (FY25) through 2029-30 is yet to be formulated,” said the state-owned airport operator.
 
The AAI’s plan to revamp 23 airports and build two greenfield airports will assist airlines in handling rising passenger traffic.
 
Indian carriers flew an average of 372,840 passengers per day in 2022-23 (FY23), 59.81 per cent more than in 2021-22 (FY22), according to government data reviewed by Business Standard.
 
Airlines in India are expected to add 132 aircraft in FY24 to tap into the surge in passenger demand, according to CAPA India.

 
While Air India is expected to induct 53 aircraft, IndiGo will add 49, the aviation consultancy firm said in its annual outlook.
 
The combined fleet size of Indian carriers will increase from 684 at the end of March 2023 to 816 by the end of March 2024.
 
According to CAPA India, India’s domestic traffic will increase by around 20 per cent year-on-year to 160 million in FY24, while international traffic will rise 22-27 per cent to 72-75 million.
 
“Increased capacity deployment by low-cost carriers on international routes to significantly stimulate traffic,” observed CAPA India.
 
The AAI received more than double the concession fees from eight privatised airports in FY23 as air travel increased significantly and legal issues with operators of Delhi and Mumbai airports were partially resolved. This money will also assist in capex for FY24.

 
In the April-December period of FY23, the AAI received Rs 2,444.38 crore from private operators of airports in Delhi, Mumbai, Mangalore, Lucknow, Ahmedabad, Jaipur, Guwahati, and Trivandrum. This is 84.54 per cent more than the concession fees collected in the whole of FY22 (April-March), according to data reviewed by Business Standard.
 
Since 2018, the AAI has built at least eight greenfield airports: Donyi Polo, Kalaburagi, Kannur, Kurnool, Kushinagar, Pakyong, Sindhudurg, and Shivamogga.
 
On December 20, 2021, Minister of State for Civil Aviation General (retired) V K Singh stated in the Rajya Sabha that the AAI plans to spend Rs 25,000 crore between 2019-20 (FY20) and FY25 to construct new airports and upgrade existing ones.

 
The AAI’s capex between FY20 and FY23 stands at Rs 17,692 crore. If the abovementioned capex plan is still in place, the AAI will be spending about Rs 7,037 crore in FY24 and FY25.