Ratings agency ICRA has forecast that non-aeronautical revenues at Indian airports will grow by 16.6 per cent to touch Rs 16,150 crore over the next 10 years, driven by increase in scope of activities there and growing commercial orientation of the operators.
Revenues from such activities primarily consist of fees for the rights to operate businesses at the airport, and rental of leased land and premises.
Some of the common non-aeronautical activities include food and beverage business, duty-free shops, leasing of terminal space, and running car rentals/parking and hotels/motels.
Over the last 10 years, non-aeronautical revenues at domestic airports have increased at a CAGR of 22.9 per cent -- from Rs 450 crore in fiscal 2005 to Rs 3,500 crore in 2014-15, according to ICRA.
Over the next 10 years, ICRA estimates that the per passenger non-aeronautical revenue for Indian airports would grow from the current levels of Rs 182 to Rs 410, at a CAGR of 8.4 per cent, the ratings firm said in its forecast, released today.
"The total non-aeronautical revenues at Indian airports are expected to reach Rs 16,150 crore in FY2025 at a CAGR (compound annual growth rate) of 16.6 per cent," it said.
Significantly, ICRA's projections comes at a time when Indian carriers have reportedly sought a ban on the sale of liquor in the security hold area (SHA) at domestic terminals of airports on the ground that drunk passengers on board can be a "safety threat."
At presenet, sale of liquor is allowed both at shops and pubs inside the SHA at airports after passengers have checked-in and undergone the security check.
Noting that over the years, airports have evolved from being purely an infrastructure provider to a sophisticated market entity with diversified revenue streams, ICRA said, "this has led to the emergence of non-aeronautical revenues which have become a key contributor to an airport's revenues."
"As many international airports have evolved over the years in terms of generation of non-aeronautical revenues, the same can be expected from the Indian airports.
"The increase in scope of activities at the airports and growing commercial orientation of the airport operators are expected to drive the growth in non-aeronautical revenues at Indian airports," ICRA AVP for corporate ratings, Harsh Jagnani said.
Non-aeronautical revenues constitute 25 per cent of the total revenues for Indian airports, whereas their contribution stands at 37 per cent for the ICRA Sample of international airports.
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On a per PAX basis, the non-aeronautical revenue in India stands at Eur 2.52 (for FY2015), which is significantly lower than Eur 5.80 for the ICRA Sample of international airports, Jagnani said.
For this purpose, ICRA has analysed 25 international airports/airport groups together encompassing 132 airports and including 21 of the 50 busiest airports in the world, with a total passenger base of 1,700 million and non-aeronautical revenues in excess of Eur 11 billion.
