It is not only the Airports Authority of India (AAI) which posted an impressive increase in its revenue during FY16 due to increased user fees from passengers as a result of lower crude prices that enabled higher number of passengers to fly.
The country’s two private infrastructure firms, GVK and GMR Groups, which operate two airports each in the country, also saw their revenue rising.
During FY16, AAI’s total revenue stood at R10,825 crore, up 17% on a year-on-year basis. This was the first time in its history that its revenue crossed R10,000 crore. Net profit was up 30% at R2,537 crore.
Similarly, both GVK and GMR group, who control almost 70% of the traffic in the domestic market, managed to turn around their airport business on the back of strong passenger traffic, prudent asset monetisation and other cost cutting measures.
Both these firms manage their respective airports in a joint-venture partnership with AAI and have a revenue share agreement with it.
In FY16, GMR’s Delhi International Airport (DIAL) witnessed a passenger growth of 18% while its Hyderabad Airport (GHIAL) saw 19% growth in traffic.
As a result the revenues increased by 21.38% to R4,226.20 crore. During the same period, GMR Airports also increased its Ebitda by 39.98% to R2387.30 crore. Indicating a turnaround in the airport business, GMR Airports posted a net profit of R277.20 crore compared to a loss of R145.9 crore in FY 15.
The Hyderabad-based infra major GVK also saw healthy growth in the revenues and significant increase in its operating profit. In FY16, revenue of the airport business increased by 15.56% to R2,842.13 crore. During the same period Ebitda increased by 891.24% to R450.32 crore.
Recently, GMR and GVK decided to sell a part of their stake in the Delhi, Bangalore and Mumbai airport to reduce their debt. In March, GVK decided to divest 33% stake in Bangalore
International Airport (BIAL) to Canadian investor Prem Watsa-led Fairfax India Holdings Corporation and Fairfax Financial Holdings, through its wholly owned subsidiaries in Mauritius, for R2,149 crore ($321 million).
GMR is also in talks with a couple of potential investors for selling a stake in DIAL. The Banglaore-based company aims to raise $600–700 million from the stake sale.