THE GOVERNMENT OF INDIA continues its drive towards privatisation of airports. The beginning of the year saw ~48 per cent of domestic capacity under PPP airports. This figure is now at 60 per cent after the successful bid by Adani Airports for six airports.
Another six airports may soon be bid out bringing the total airport capacity under PPP models to 65 per cent. Currently, private airports in India have the majority of the passenger share. At over ₹35,000 crore, this amount is likely to double over the next decade towards capturing the market potential. Because with a 300-million strong middle class, low air travel penetration and an increasing propensity to spend, India is targeting 500 million passenger trips in the next 20 years. Forecasts estimate that India will be the third-largest aviation market within the next six to seven years.
Because airports are guaranteed a monopoly status coupled with long term concession periods, this essentially translates to low competition, stable cash-flows and a captive consumer base. The monopoly status gives existing airports immense market power and makes for a compelling case for investment. Currently, PPP airports are guaranteed a return on equity of 16 per cent. This is made possible by means of charges borne by the flying public. The process involves the airports submitting to the regulator, traffic projections along with operating expenses, taxes, the cost of capital, subsidies received and capex plans. A target revenue figure is calculated and the gap between the target revenue and actual revenue is recovered from the passengers via the levy of User Development Fee (UDF). That’s not all, in cases where the airport is unable to secure adequate financing for capex, the funding gap between the financing secured and required, is again borne by the passengers via Airport Development Fees (ADF).
Denne historien er fra April - May 2020-utgaven av SP's Airbuz.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra April - May 2020-utgaven av SP's Airbuz.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Travel Transitions In 2021
From contactless checkin to biometric gateways, cabin cleaning, increased collaboration, domestic travel, common travel digital passport, travelling in 2021 and beyond comes decked up with innovations
Supersonic Airliners On The Horizon
Although the aviation industry has been severely hit by the coronavirus pandemic, the nascent field of high-speed civil aviation is one area that is recording noteworthy progress
TATA GROUP RIDING THE AMBITIOUS AVIATION ARC
Having raised its stake in AirAsia India, alongside operating Vistara, Tata Group is a strong bidder for Air India too
PRATT & WHITNEY PUREPOWER ENGINES
The Pratt & Whitney PurePower Geared Turbofan engine introduced dramatic improvements in propulsive efficiency and noise reduction
SIX BOEING 777 FREIGHTERS FOR CHINA AIRLINES
China Airlines has becomes the 20th operator of the twin-aisle freighter. The company’s Chairman Hsieh Su-Chien stated:
TATA'S STAKE CLIMB UP THE LADDER IN INDIAN AVIATION INDUSTRY
Tata group increased its holdings in AirAsia India to 84 per cent
INDIAN AIRLINE INDUSTRY ON THE ROAD TO RECOVERY
Around two months after the imposition of total lockdown for three weeks commencing March 23, 2020, domestic flights albeit with much reduced frequency, were permitted to operate
EMBRAER E190 OPERATING WITH MYANMAR AIRWAYS
On December 21 last year, Myanmar Airways International’s (MAI) first Embraer E190 commenced operations from Yangon.
EMERGING CONFIGURATIONS FOR SUSTAINABLE AVIATION
Aviation contributes two per cent of humanmade Co 2 emissions and has challenged itself to reduce net emissions even while demand for air travel and transport has grown significantly
BLURRING DISTINCTION BETWEEN NARROW-BODY AND WIDE-BODY AIRLINERS
The major benefit which will emerge is that terribly busy hubs will de-congest with the number of transiting passengers reducing drastically as the layovers at the hubs will be done away with
