Mumbai: The topline of private airports in the country is likely to increase by 30 per cent this financial year due to increasing traffic, a report said on Thursday.
As passenger numbers increase, airports will see an increase in aeronautical and non-aeronautical revenues.
Aeronautical sources include fees collected from passengers, airlines and car operators for use of the infrastructure. Credit rating agency Crisey said in its report that non-aeronautical sources include advertising, retail, lounges and duty-free shops.
Nearly two-thirds of the growth in airports' revenue is expected to come from aeronautical sources, an increase of 45 per cent year-on-year, it said.This is because almost half of the airports in the CRISIL Ratings study will see a pre-determined increase of an average of 25 per cent in their aeronautical charges.
“The expected growth in passenger traffic of around 10 per cent over the high base of the previous financial year, coupled with tariff hikes linked to capital expenditure and rising non-aeronautical revenues per passenger, will help boost the revenues of major private airport operators to around Rs 10 per cent,” the agency said. , 30 percent in this financial year.
It said the report is based on a study of 10 private airports, which accounted for an estimated 60 per cent of the total passenger traffic in FY24.
Rising revenues will restore debt service relief to about 1.x, taking it back to levels last seen before the COVID-19 pandemic, a period during which airports used up their cash to service debt. There was a reduction in reserves.
Ankit Hakhu, Director, CRISIL Ratings, said, “Carrying on from the strong base of the last financial year, passenger traffic growth will continue its momentum in FY2025 and grow by over 10 per cent to over 41 million.,
He said sustained economic growth, opening of more airports and improved regional connectivity are providing the necessary enabling conditions for domestic traffic growth.
Internationally, he said, increasing business travel and easing visa requirements for countries such as Malaysia and Vietnam, reducing waiting times for visa applications for Western Europe and improving connectivity to Western and Southeast Asia. There are important positive things.
Aeronautical charges are regulated and allow the cash flow required by the airport for repayment of loans taken for aeronautical capital expenditure and return on equity for the operator.
Airports made significant expansions during the pandemic to double their capacity in anticipation of the current surge in passenger numbers. According to the report, the current increase in aeronautical charges is offsetting these capacity expansions.It said the remaining one-third of revenue growth would be driven by non-aeronautical sources, a 15 percent year-on-year increase.
According to the rating agency, these are continuously increasing due to increasing passenger spending on retail and food and beverages as well as real estate leasing and advertising.
As passenger numbers increase, airports will see an increase in aeronautical and non-aeronautical revenues.
Aeronautical sources include fees collected from passengers, airlines and car operators for use of the infrastructure. Credit rating agency Crisey said in its report that non-aeronautical sources include advertising, retail, lounges and duty-free shops.
Nearly two-thirds of the growth in airports' revenue is expected to come from aeronautical sources, an increase of 45 per cent year-on-year, it said.This is because almost half of the airports in the CRISIL Ratings study will see a pre-determined increase of an average of 25 per cent in their aeronautical charges.
“The expected growth in passenger traffic of around 10 per cent over the high base of the previous financial year, coupled with tariff hikes linked to capital expenditure and rising non-aeronautical revenues per passenger, will help boost the revenues of major private airport operators to around Rs 10 per cent,” the agency said. , 30 percent in this financial year.
It said the report is based on a study of 10 private airports, which accounted for an estimated 60 per cent of the total passenger traffic in FY24.
Rising revenues will restore debt service relief to about 1.x, taking it back to levels last seen before the COVID-19 pandemic, a period during which airports used up their cash to service debt. There was a reduction in reserves.
Ankit Hakhu, Director, CRISIL Ratings, said, “Carrying on from the strong base of the last financial year, passenger traffic growth will continue its momentum in FY2025 and grow by over 10 per cent to over 41 million.,
He said sustained economic growth, opening of more airports and improved regional connectivity are providing the necessary enabling conditions for domestic traffic growth.
Internationally, he said, increasing business travel and easing visa requirements for countries such as Malaysia and Vietnam, reducing waiting times for visa applications for Western Europe and improving connectivity to Western and Southeast Asia. There are important positive things.
Aeronautical charges are regulated and allow the cash flow required by the airport for repayment of loans taken for aeronautical capital expenditure and return on equity for the operator.
Airports made significant expansions during the pandemic to double their capacity in anticipation of the current surge in passenger numbers. According to the report, the current increase in aeronautical charges is offsetting these capacity expansions.It said the remaining one-third of revenue growth would be driven by non-aeronautical sources, a 15 percent year-on-year increase.
According to the rating agency, these are continuously increasing due to increasing passenger spending on retail and food and beverages as well as real estate leasing and advertising.
