Airports in India, run by the state owned Airports Authority of India (AAI) lost INR 461.59 crore in FY 22-23, shows the data released by the government in the Lok Sabha last week. The data shared in response to a question from Mr. S.R.Parthiban, Member of Parliament from Salem, Tamil Nadu shows the profit and loss of 125 airports in the country.
The Netaji Subhas Chandra Bose International Airport at Kolkata was the most profitable airport for AAI recording profits of INR 482.3 crore. This is the second consecutive year that Kolkata airport has given the highest profits to AAI. Interestingly, the airport has been the most profitable AAI airport in four out of last five financial years, with the exception being only the pandemic year, when it recorded losses.
The list of airports also includes many which are not operational but are under the AAI. Some of these are Satna, Panna, Khowai and Khandwa – where there is neither profit nor loss. There also remain airports which are not operational and have reported losses, possibly due to maintenance being taken up or efforts being made to keep the airstrip active. Some of these are Malda, Donakonda, Jogbani, Vellore.
Airports at Safdarjung, Delhi and Begumpet, Hyderabad are also owned by the AAI and do not see any scheduled service, though they are used by other services. These airports also feature in the list of airports. Amongst the 124 airports for which data was declared, only 18 have recorded profits; while 14 have neither declared a profit nor loss. A staggering 92 airports have recorded a loss.
The profit making airports
Kolkata saw a three fold increase in profitability over the previous year. Chennai has seen a swing from highest loss making airport in the last financial year to the second most profit making airport. Calicut comes in next and occupies the third position. The southern state of Kerala has four international airports but Calicut is the only government owned with Kochi, Trivandrum and Kannur being operated by private players.
Pune and Goa (Dabolim) occupy the next two spots. Both the airports are civil enclaves at defence airfields and the AAI only manages the terminal, yet the demand at these places has ensured that the airports remain profitable. Srinagar Airport, another civil enclave, is the eighth most profitable airport for AAI. Trichy and Coimbatore from Tamil Nadu are at sixth and tenth position respectively.
The surprise entry is that of Deoghar airport which saw services start only recently. Juhu airport in Mumbai, which does not have any scheduled operations and is largely used for small charters as well as flights to oil rigs was the ninth most profitable airport.
Highest losses
Maharaja Bir Bikram Airport at Agartala recorded the highest losses in the last financial year. The airport saw a loss of INR 115.61 crore, possibly due to the increased expenditure on the operationalizing of the terminal and not seeing enough services to cover the cost of a bigger terminal in operation.
At second and fourth position are Hyderabad – Begumpet and Delhi – Sardarjung which do not see any scheduled services. Dehradun, Vijayawada, Tirupati, Bhopal, Vadodara, Varanasi and Imphal complete the list of airports in top 10 by losses. Most of these were also part of the list in the last financial year.
Network Thoughts
One would wonder how AAI declares profits and shares dividends with the government when the airports it owns are reporting losses. The answer lies in the revenue sharing and concession agreement it has with the privatised airports where AAI gets profits as well as money for the services offered like Air Traffic Control.
With more airports up for privatisation, the idea of the government thus far has been to let AAI invest in building new airports and get bids from private players to operate the larger airports. This will help AAI continue with a steady stream of revenue from profit sharing and other services, while more airports can come online.
The “more airports” part remains a challenge because many of such airports have been lying idle – sometimes even after incentivizing.
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Yes the loss making airports of AAI is an issue not resolved for decades , even when Civil Aviation Market of India is growing in double digit beginning 2010. Government says that this will be third largest market globally by 2030.
So the million dollar question is what about the strategies and policies , the AAI management and Civil Aviation Ministry should consider going forward ?
The answers are simple :
Just like privatization of Air India and bringing the efficient management by Tata group has been a game changer , let this success formula also been repeated at AAI , and for doing this let only the ATC tower operational aspect , the route navigation and VIP moment been handled by AAI , and rest all the commercial and administrative aspect been handled by private parties for example Adani group , GMR group etc.
The another reason of loss making airport stories is because the workforce recruited and the flight operations routine. I illustrate my city of Rajkot , which has hardly 8 to 9 daily commercial domestic departures , but the overall staff strength at this airport is not at all matching the demand , which is quite high . Further more the maintenance and up gradation cost of Rajkot airport is also a deep concern that too now when a new international green field airport is open for fight operations.
So the conclusion is , it is better to have few airports profitable then to have large number of loss making airports because it is the waste of public money and for no reason.
UDAN scheme is perfect but to make it more successful the only answer is LOW COST AIRPORTS .
Written By –
Raju Thaker
Project StarWest
Airlines and Aviation Research
B – 304 , DharmDarshan,
10 , Bhaktinagar Society
Rajkot – 360 002 ( Gujarat )
e – rajuthaker14@gmail.com
Very nice presentation.