Bangalore International Airport Ltd plummets to loss

GVK says loss due to higher financial expenses and depreciation

The Bangalore International Airport Limited (BIAL) which runs the Kempegowda International Airport, in which Hyderabad-based GVK Group is the single largest shareholder, has reported a net loss of Rs 30 crore for the first quarter of FY15 compared to a net profit of Rs 65.97 crore in the corresponding previous quarter.

The GVK Group has said that the loss in BIAL is attributable to the higher financial expenses (Rs 53.35 crore) and a higher depreciation (Rs 55.62 crore) on account of the capitalisation of the expansion project (upgrading of the terminal and facilities). BIAL recorded a 14 per cent increase in revenue of Rs 182.80 crore for the quarter-ended June 30, 2014 as against Rs 160.72 crore for the corresponding quarter of the previous year.

“Though the new tariff through which we can recover costs has been approved, it’s effective July 1, 2014. In addition to the above, there is a higher depreciation charge of Rs 31.37 crore due to the changed useful life of assets as per the new company’s Act effective April 1, 2014,” GVK said in a statement.

BIAL is hoping for better times based on the approval of The Airport Economic Regulatory Authority (Aera) which recently allowed the Bangalore airport to raise the user development fees by 41-45 per cent. Landing and parking charges, too, were revised and a new common user terminal equipment charge was introduced to be collected from passengers.

While the user development fee was raised 41 per cent for international passengers to Rs 1,368, domestic passengers will have to pay 45 per cent more at Rs 342. The landing fee was raised 145 per cent for international flights and 66 per cent for domestic flights, while the parking fee was increased 105 per cent.

The Bangalore airport during end of last year embarked on a Rs 1,200 crore expansion which will also increase the capacity by about 50 per cent to eventually handle 20 million passengers from the present 13 million. For the fiscal 2013-14,  BIAL reported that over 12.86 million passengers were served in 2013-14, with 118,575 air traffic movements (ATM) even as the year witnessed many new improvements and the operationalisation of the enhanced terminal.

The airport also experienced the highest year-on-year growth in ATM in FY2013-14. Overall, the airport handled 7.3 per cent more passengers compared to 2012-13, with 10.23 million domestic and 2.63 million international travellers in 2013-14.