The Hindu : Andhra Pradesh / Hyderabad News : Expansion plans of RGIA frozen

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Sunday, Nov 16, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Expansion plans of RGIA frozen

Special Correspondent

9.8 per cent decline in domestic passengers at Shamshabad airport

HYDERABAD: The Rajiv Gandhi International Airport (RGIA) at Shamshabad has begun experiencing the heat of the global economic meltdown that is reflected in the decline in the passenger traffic.

As a first step, GMR Group has decided to put on hold expansion plans not critical for the airport’s functioning and frozen proposals for capital expenditure to the tune of Rs. 150 crore as well as for development of the special economic zone near Hyderabad.

Interacting with journalists here on Friday, Chief Executive Officer of GHIAL P. S. Nair and Chief Operating Officer A. Vishwanath Atluri also forecast a six-month extension in the break-even period for which a major reason was the government fixing a user development fee (UDF) for domestic passengers that was 40 per cent less than what GMR had sought. The airport would now break even in six years against five-and-a-half years expected earlier.

They recalled that they had sought UDF of Rs. 600 for each domestic and Rs. 1,000 for each international passenger, but the government allowed only Rs. 375 for the former. They would present their case for revision of the UDF to the airline regulatory body that would come into existence soon.

They said there was a 9.8 per cent decline in domestic passengers at the airport and a 10 per cent growth in international travellers during the seven-month period from March 24, 2008 when the airport began functioning, compared to the corresponding period last year. This dichotomy was reflected even in cargo operations which witnessed a 10.7 per cent decline in the domestic sector and a 45.8 per cent rise in international cargo (in terms of tonnage).

They said they expected a ten per cent growth in the domestic traffic at the end of the year (against an average growth of 40 per cent at Begumpet) and 10-15 per cent growth in cargo.

Special schemes

The forecast for the entire year was about 7 million passengers as against the facility created for 12 million passengers, obviating the need for any hurry with the Phase II plans. The GMR group planned to partly meet this challenge by increasing the proportion of revenue in the non-aeronautical sector such as retail and special schemes for passengers, they added.

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