It isn’t the best of times at the Airports Authority of India (AAI). The body that runs 125 airports has seen a particularly bad quarter this time. Aircraft movements at its airports are down, and so are its profits. Still, looking ahead, the state-owned airports operator is moving full steam ahead with its programme of setting up new airports and modernising old ones.
In a weak operating environment, aircraft movements have fallen 0.5% in the June quarter for the AAI, leading to a 28% fall in its net profit—to R167.52 crore from R230.44 crore a year ago. But that hasn't affected its capital expenditure programme. In the first quarter, the AAI has spent nearly 30%, or R887 crore, of its targeted annual capex of R3,006 crore.
The schedule for the next five years is hectic, with the AAI targeting development of 20 new airports and modernisation of 25 existing ones. Chairman VP Agarwal has been especially focusing on airport development. Under him—since January 1, 2009—the AAI has developed and upgraded 58 airports.
“The task of such large-scale modernisation was not easy. Huge funding, along with large gestation periods for completing airport projects, was the biggest deterrent,” says Agarwal. “However, a balanced approach of utilising internal resources, debt and cost cutting helped us fund the projects. Even the recession didn’t stop us from completing the projects on time and posting decent profits”, he said.
The AAI is hopeful of keeping the same pace of development that it had kept in the past five years. But this time, since a majority of projects are greenfield, it has called for support from the state governments.
“Subject to co-operation from the respective state governments and access to suitable sites free of cost, the AAI should be able to develop 20 airports in the next five years,” GK Chaukiyal, member (operations), AAI, said recently.
The AAI expects to compete the modernisation of Chennai and Kolkata airports this year on schedule, and open the Chandigarh Airport, on time, in mid-2014.
“The Chandigarh Airport will be coming up on a new site and for that work is going on. Hopefully, we will be