Increased travel will raise airport sector’s profits

“The sector’s operating income and operating profits are estimated at INR 14,000 crore and INR 3,250 crore (operating loss of INR 1,450 crore in FY21), respectively, in FY22.”

— Rajeshwar Burla, Group Head, Corporate Ratings, ICRA

PRAVASISAMWAD.COM

The ease in travel restrictions after the lifting of lockdown will raise the airport infrastructure sector’s operating profits in FY22, according to ratings agency ICRA. The outlook for the sector, however, continues to remain “negative”.

“The sector’s operating income and operating profits are estimated at INR 14,000 crore and INR 3,250 crore (operating loss of INR 1,450 crore in FY21), respectively, in FY22,” said Rajeshwar Burla, Group Head, Corporate Ratings, ICRA.

“Domestic traffic has witnessed healthy MoM (month-on-month) growth since June 2021 with traffic reaching 72 percent of pre-Covid levels in October 2021, the highest since the start of the pandemic. Passenger traffic is expected to witness 82-84 per cent YoY (year-on-year) in FY22.

“…the ongoing capacity expansion plans at some major airports were expected to be delayed by 12 to 18 months due to the pandemic.”

“The significant ramp up in vaccination, decline in Covid cases and pick up in revenge leisure travel are supporting the growth in domestic passenger traffic,” it added.

ICRA also noted that the ongoing capacity expansion plans at some major airports were expected to be delayed by 12 to 18 months due to the pandemic. “The completion cost is expected to increase due to increase in interest during construction as some of the airports have funded capex with bullet bonds which have been drawn down at once,” it added.

************************************************************************

Readers

These are extraordinary times. All of us have to rely on high-impact, trustworthy journalism. And this is especially true of the Indian Diaspora. Members of the Indian community overseas cannot be fed with inaccurate news.

Pravasi Samwad is a venture that has no shareholders. It is the result of an impassioned initiative of a handful of Indian journalists spread around the world.  We have taken the small step forward with the pledge to provide news with accuracy, free from political and commercial influence. Our aim is to keep you, our readers, informed about developments at ‘home’ and across the world that affect you.

Please help us to keep our journalism independent and free.

In these difficult times, to run a news website requires finances. While every contribution, big or small, will makes a difference, we request our readers to put us in touch with advertisers worldwide. It will be a great help.

For more information: pravasisamwad00@gmail.com