Private airports are a popular mode of transport and are expecting robust revenue growth this financial year. With the impact of the pandemic waning away, airport operators have seen their cushion of debt-servicing recovering to the pre-pandemic long term average.
The recovery in passenger traffic has been impressive too, reaching 87 percent of the fiscal 2020 levels as of February. With international travel showing growth, business travel picking up as employees return to their offices and an increase in infrastructure development due to schemes like the Regional Connectivity Scheme, it is estimated that there will be a 17 percent growth on-year in passenger volume reaching 380 million in the upcoming financial year.
This will be mirrored by a rise in the aeronautical revenue, bolstered by increased tariffs and the availability of aircraft and slots at airports. Non-aeronautical revenue from activities such as duty-free, retail, advertising, parking and commercial property development is expected to rise 28 percent due to the higher spending behaviour of international passengers.
Costs are expected to increase in line with this, but these are likely to be offset by the healthy cash flow that private airports are expecting. Moreover, the credit profiles of these airplane operators will also benefit from their strong market position and concession life.
CRISIL Ratings is a global analytics firm that provides ratings and research services to clients in the market. They have provided the research on which this article is based, focusing on the top four private airports in India – Delhi, Mumbai, Bengaluru and Hyderabad.
The company is run by the Chief Rating Officer Ashu Suyash and since its establishment in 1998, it has become a leader in the ratings and research analysis sector. With the help of data analytics and industry knowledge, they have made a name for themselves in the financial research market, offering clients advice and guidance on their corporate and project financing requirements. They are a part of the Crisil Group, which is a global financial services firm and are based in Mumbai.