Airport operators also feel oil price pangs

Written by Shaheen Mansuri | Mumbai, Jul 11 | Updated: Jul 12 2008, 07:42am hrs
Its not just airlines that have to bear the brunt of high crude oil prices; airport operators too have been hit by the current turmoil.

On the one hand, all Indian carriers like Jet Airways, Air India, SpiceJet and GoAir have withdrawn some of their flights on various routes due to poor load factors. On the other, revenues (aeronautical and non-aeronautical) of the Mumbai airport, amongst other newly developed airports, have been dented.

For instance, the Mumbai International Airport Ltd (Mial), according to sources, had projected over Rs 1,000 crore as revenues this fiscal. However, it will not be able to reach its target. It may be noted that Mumbai used to handle over 730-740 flights daily and now the figure has dropped to nearly 650. According to the Airports Authority of India (AAI) website, the landing and parking charges per metric tonne for an aircraft is Rs 17,080. So, as the number of flights get reduced, the airport operators revenues are proportionately hit. Also, non-aeronautical revenues earned by passenger spendings at the airport are affected.

However, a spokesperson from Mial said that the airports revenues will be affected only by around 10%. The airlines have told us that they have withdrawn flights on a temporary basis. It will not make much of a difference, said the official. Meanwhile, the GVK Group, which is modernising the Mumbai airport, is learnt to be keeping a firm hand on its expenses. We are in the process of attaining operational efficiencies, said an official.

Says an analyst from a Mumbai-based broking firm, All the metro city airports are in the modernisation process to accommodate more aircraft. At such a crucial time, airlines and passengers are the main sources of revenue, which if brought down by even 10%, will impact the revenues of the operators. PS Nair, chief executive officer, GMR Hyderabad International Airport Ltd, added that due to the fuel hikes, it is a downtrend for all the airport operators. The situation will improve soon, he said.