In a first since 1995, the Airports Authority of India (AAI) will report a loss in the FY21 owing to the novel coronavirus.
The otherwise profit earning government-owned entity has taken a massive hit ever since the implementation of lockdowns and the suspension of air transport from March 25 till May 24.
Although flights have resumed, the fear of travel, quarantine rules and other precautionary measures have dampened the revenue of the AAI. The entity earned over Rs 3,600 crore profit in FY20, over revenue of around Rs 14, 637 crore, according to a report by the Business Standard.
Two metropolitan city airports - Delhi and Mumbai - pay fees to the AAI but had been unable to do so for three months. The Delhi International Airport began payments from August, but the Mumbai International Airport has moved courts citing force majeure for the entire year.
DIAL pays 45.99 per cent of their revenue whereas MIAL 38.7 per cent to the AAI. This sums up to a major chunk of the AAI’s income, which makes it one of the few profitable public sector units.
“Twenty-five per cent of AAI’s revenues was contributed by the revenue share from privatised airports (Delhi and Mumbai) in FY18. Going forward, any reduction in the same can impact AAI’s revenues and profitability significantly. In addition, the development of more airports (greenfield as well as under UDAN scheme) and the privatisation of the existing one can adversely impact its revenues and margins, the impact of which will be assessed going forward,” rating agency ICRA said.
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