Serpentine queues at airports to continue for three more years! Four of the largest airports of the country – Delhi, Bengaluru, Mumbai and Hyderabad will continue to witness long queues, given the surging traffic and the slow progress of the ongoing Rs 38,000 crore airport capacity expansion. According to details of a CRISIL report, these four of the largest airports are undertaking a record Rs 38,000-crore capex but the capacity will not come up before the end of 2023.
These airports – Delhi, Bengaluru, Mumbai and Hyderabad – handle more than half of the traffic and are operating at 130 per cent of their total installed capacity. These airports have also not shown any dip in the traffic surge and by handling more than half of the load, the congestion will continue till about financial year 2023, according to details by CRISIL quoted in a recent PTI report.
The operationalizing of the capacities in the following two fiscal years, will bring down the utilisation levels at the airport, although they will still be high at over 90 per cent by fiscal year 2023. This is likely despite the Rs 38,000 crore capex, which has been undertaken by the operators of these airports over a period of five fiscals 2020-2024. According to CRISIL, despite the unprecedented capex which is debt-funded, the ratings are likely to be stable given the powerful cash flow expected due to the increasing traffic growth, low project risks associated with the capex and the improving regulatory environment.
The capacity at these four airports will increase by a cumulative 65 per cent to 228 million annually, from the present 138 million by fiscal year 2023. However, the traffic is expected to grow up to 10 per cent per annum over the same period. The additional capacities are expected to be operational only by fiscal 2023, that too in phases. This means that the high passenger growth will add to congestion at airports till then.
The increasing footfalls at airports also provide a leg-up to the non-aero streams such as rentals, advertising, food, beverage as well as parking, which comprise around half of the revenue of the airports already. These are expected to grow rapidly at over 10-12 per cent, also supported by the higher monetisation avenue coming along with the current capex.
