What could be the reasons for the decrease in profit of the Chennai airport?
Posted on: 27/Mar/2021 9:56:19 AM
Now, at the Chennai airport the passenger traffic has been reviving slowly and steadily.
In 2017-18 Chennai Airport made a profit of Rs 455 crores and this profit dipped to Rs 22.65 crores in 2019-20. It must be recalled that the profit fell down by Rs 5 crores in the year 2018-19 and then it was revived.
The slash in the user development fee for the international terminals has been cited as the main reason for the decrease in the profit at the Chennai airport. It must be noted that the AERA or Airport Economic Regulatory Authority barred the airport from collecting user fees when the new international arrival terminal was lying unused. In the subsequent years, the revenue was affected.
The construction work has been going on in the airside leading to change in the landing and parking fees and this was also another reason for the decrease in the profit for the airport in Chennai.
It was later highlighted by an official that a few parking bays have to be rearranged to accommodate the expansion work that has been going on the airside. This would have resulted in the loss.
Truth is that the taxiway work and the parking bay work have been going on in the years when the airport had reduced revenue. There are also few other reasons for the decrease in the revenue of the Chennai airport and these are defaulting airlines, absence of adequate retail food and beverages hubs in the terminal, absence of adequate passenger facilities, issues in car parking contracts etc.
It is known that unlike the private airports of Hyderabad and Bengaluru, Chennai is struggling to encourage the airlines to help it to become an aviation hub. There has been no flight to other new foreign destinations except flights to Dhaka. It is true that the airlines have chosen to start flight services from Bengaluru despite having many passengers to the USA and Europe.
Information collected is that the Rs 22 crores profit that was earned before the Covid-19 pandemic has been more or less the same as the profit earned by small airports like Trichy and Coimbatore etc.
Chennai airport handled as many as 5799287 passengers and Trichy airport handled as many as 1316419 passengers in the year 2019-20.Madurai airport suffered loss but other airports like Trichy and Coimbatore had profits. It has been brought out by some sources that the airport is likely to be in red due to the impact of Covid-19 on their revenues.
