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Capacity issues at top airports will continue as flyer count rises

Congestion at India’s top four airports Delhi, Mumbai, Bengaluru and Hyderabad will continue in the medium term as the number of air passengers has seen a rise despite the slowdown in the economy and closure of Jet Airways, Crisil Ratings said in a study.

These four airports handle more than half of air passenger traffic in India and currently operate at over 130% of capacity utilisation. With healthy traffic growth projected in the near future, this operating rate is expected to rise further in next 12 months, it said.

This, despite a ₹38,000-crore capex being undertaken by operators between 2020 and 2024. The capex, the highest to be incurred in any continuous five-year period, is largely debt-funded.

“Capacity at these four airports will increase a cumulative 65% to 228 million annually [from 138 million now] by fiscal 2023. However, traffic is expected to grow strong at up to 10% per annum over the same period,” Manish Gupta, senior director, Crisil Ratings, said.

“Because the additional capacities will become operational in phases only around fiscal 2023, high passenger growth will add to congestion till then,” he added.

High utilisation will ride on pent-up demand (accumulated in 2019 as traffic was impacted with the grounding of Jet Airways) and one-off issues with new aircraft of certain airlines. Further impetus will also come from improving connectivity to smaller cities and reducing fare difference between air and rail, Crisil Ratings said.

Ankit Hakhu, director, Crisil Ratings, said: “These airports operate on a hybrid till model, where non-aero revenue stream partially subsidises the airport user fee. Hence rising traffic and increasing monetisation of non-aero assets will pave the way for a more balanced regulatory regime.”


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Printable version | Sep 26, 2021 6:59:37 PM | https://www.thehindu.com/business/capacity-issues-at-top-airports-will-continue-as-flyer-count-rises/article30772188.ece

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