Five key airports continue to record y-o-y profit in FY14

Five airports operated under PPP model - Delhi, Mumbai, Bengaluru, Hyderabad and Cochin - are expected to continue to 'limit traffic decline' despite adverse economic conditions in FY15 and first half of FY16, rating agency India Ratings and Research (Ind-Ra) has said in its latest report.

All the five major private airports have registered year-on-year (y-o-y) growth in domestic and international passenger segments in FY14 and in the first few months of FY15 after a decline in domestic passenger traffic in FY13. The cascading effect of the increase in domestic and international enplanements has resulted in y-o-y increase in non-aeronautical revenues also across airports in FY14, it said.

"Ind-Ra does not expect any rating pressure on airports in its portfolio in the short to medium-term due to resilience of their cash flow to downside sensitivities. The dependence of a couple of airports on timely real estate monetisation is mitigated by their presence in high catchment areas. That said, ruling in the determination of tariffs, which are yet to be determined for FY15-FY19 period, will be closely monitored by Ind-Ra and could act as a negative trigger," the report stated.

Delhi International Airport Pvt Ltd (DIAL), which carried 27 per cent of the total international enplanements of India in FY14, recorded a 9.64 per cent y-o-y increase. The Mumbai International Airport Ltd (MIAL), which carried 22 per cent, recorded a 4.13 per cent y-o-y increase during FY14. GMR Hyderabad International Airport Ltd (GHIAL) continued to record double-digit growth of 13.78 per cent y-o-y in FY14.

"Private airports have continued to witness positive y-o-y growth in domestic enplanements during the first two months of FY15. DIAL witnessed highest growth of 7.46 per cent, followed by MIAL with 7.26 per cent, Cochin International Airport Limited (CIAL) with 6.99 per cent, Bengaluru International Airport Limited (BIAL) with 5.35 per cent and GHIAL with 4.35 per cent," it further said.

According to the report, recovery in domestic passenger traffic and consistent growth in international enplanements have helped airport operators generate higher non-aeronautical revenue. This is demonstrated by an increase in non-aero revenue in Delhi, Mumbai, Hyderabad and Bangalore airports in FY14. Non-aero revenue ranged from 25-40 per cent of the total revenue in all these four airports in FY14, it added.

The financial position of many domestic carriers continue to be weak which affects the airports' revenue in the form of increased receivables, it opined quoting a CAPA (Centre for Aviation) analysis.

FLYING HIGH

| Recovery in domestic traffic and consistent growth in international enplanements have helped operators generate higher non-aeronautical revenue