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As Indians fly more, AAI clocks record revenue

This is the first time in the history of the airport operator that revenue crossed Rs 10,000 crore

Airports Authority Of India Aai

Arindam Majumder  |  New Delhi 

Image via Shutterstock

Government-owned miniratna entity, the Airports Authority of India (AAI), has turned out to be the biggest beneficiary of the steep fall in crude oil prices. With airlines getting the cushion of lower fuel prices, leading to a surge in the number of air passengers, this has allowed the airport operator to increase its revenue on account of user fees from passengers.

For 2015-16, AAI's total revenue stood at Rs 10,825 crore. It was a 17 per cent jump from Rs 9,285 crore that the public sector undertaking clocked in 2014-15.

This is the first time in the history of the airport operator that revenue crossed Rs 10,000 crore. With the airport operator keeping its expenses in check, profit after tax (PAT) saw impressive growth of 30 per cent to Rs 2,537 crore, compared to Rs 1,959 crore the previous financial year.

With this cushion, the AAI will undertake infrastructure development, especially in tier-2 and tier-3 cities. "We have been consistently clocking impressive numbers. The growth in the number of passengers and freight helped us. This will help us in our projects, as we don't take a penny from the government," said Sudhir Raheja, chairman, AAI.

According to a senior AAI official, the growth was on the back of significant increase in income from airport leasing and non-aeronautical revenue. While revenue from aeronautical services increased 18 per cent, non-aeronautical revenue rose 23 per cent to Rs 1,203 crore from Rs 981 crore in 2014-15.

Revenue share from private airports at Rs 3,379 crore contributed to a third of the total revenue of the AAI in FY16.

Under a public-private partnership agreement, Delhi's Indira Gandhi International Airport has to share 45.99 per cent of its revenue with AAI every year, while Mumbai International Airport shares 38.7 per cent. For the Bengaluru and Hyderabad airports, the model is somewhat different and entails payment of four per cent revenue as annual concession fee.

"Increase in passenger not only leads to aeronautical revenue, but simultaneously leads to a rise in non-aero revenue from major airports," said the AAI official cited above.

As Indians fly more, AAI clocks record revenue
Besides Delhi and Mumbai, airports in South India, too, have seen the strongest growth, with Kochi, Bengaluru and Hyderabad leading the pack, according to the official. This is thanks to the increase in frequency on existing destinations and new routes such as Hyderabad-Lucknow and Hyderabad-Jabalpur.

"A new airline, TruJet, began operations last year and Air Costa is expanding its operations. SpiceJet is also adding more flights on the route," the AAI official added.

The Indian airports saw footfalls increase by almost 18 per cent, clocking 224 million passengers in 2015-16, compared to 190 million in 2014-15.

Domestic traffic at Mumbai and Delhi grew 12 per cent, while the top 10 airports operated by the AAI registered a 15 per cent growth in 2015-16. Aided by a 24 per cent reduction in jet fuel prices, the average air fares on domestic routes have fallen 14 per cent to around Rs 4,500. This has led to a spurt in demand from leisure travelers, and small and medium enterprises.

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First Published: Thu, June 02 2016. 08:05 IST