Aviation News

Airports in Andhra Pradesh Record 520 Crore Losses in 3 Years, ET Infra


<p>A file photo of Tirupati airport.</p>
A file photo of Tirupati airport.

Airports of Andhra Pradesh, including Vijayawada, Visakhapatnam, Rajahmundry, Kadapa, and Tirupati, combinedly amassed over INR 520 crore losses in the last three years, between financial year 2020-21 and 2022-23. According to the Union government’s data, Vijayawada alone posted about INR 203 crore losses during this period, followed by Rajahmundry (INR 135 crore), Tirupati (INR 129 crore), Vizag (INR 31 crore), and Kadapa (INR 25 crore).

Vizag is the only airport to end up in profits at least for a year in the last three years. The Vizag airport reported INR 2.4 crore profit last fiscal (2022-23) after it witnessed INR 29.3 crore loss in 2020-21 and INR 4 crore loss in 2021-22.

These airports are recurrently accumulating losses despite the ever-growing aircraft movement and passenger numbers. For instance, the Vizag airport witnessed over 50% growth in terms of number of domestic passengers last fiscal. As many as 24.35 lakh domestic passengers availed the services of Vizag airport in 2022-23 compared to 16.07 lakh in 2021-22.

Similarly, Vijayawada airport posted a 60% increase in passenger footfalls, whereas Tirupati reported 40% growth in 2022-23 compared to a year ago. The number of international passengers skyrocketed to 65,334 at Vizag airport in 2022-23 from a mere 2,979 in 2021-22.

The Covid-19 pandemic had its own role in affecting the revenue streams of the airports. According to the industry insiders, the pandemic disease severely impacted the aviation industry, leading to a decline in revenue, operating profit, debt collection, and internal accruals for the Airports Authority of India. Flight operations were significantly disrupted due to travel restrictions imposed on the sector, resulting in a plummeting passenger demand.

Andhra Pradesh Air Travellers Association president Dr K Kumar Raja said airport revenue is heavily influenced by the frequency of aircraft landings and takeoffs. “However, many flights are currently scheduled during times that are inconvenient for passengers rather than during airlines’ peak hours. To address this issue, more flights should be scheduled during regular business hours. The government should consider providing some form of viability gap funding to boost the growth of airports in tier-II cities like Vizag and Vijayawada,” said Dr Kumar Raja.

When asked about commercialisation of airport space, the APATA president said airports in Andhra Pradesh lack stores that sell unique products. “If you go to an airport in metro cities like Chennai or Mumbai, you can find products unique to that particular airport, which ultimately boost the business prospects at the airports. Vizag is faring well compared to other airports due to its natural potential and business environment and it is the only airport in the state to record profits in 2022-23 or in the last three years,” added Dr Kumar Raja.

In Andhra Pradesh, air traffic experienced a precipitous drop, reaching near-zero levels in April 2020. However, as lockdown restrictions were gradually eased from July 2020 onwards, a gradual recovery in air traffic began to emerge.

By January 2021, air passenger numbers had reached 3.5 lakh, and this upward trend continued in February and March 2021, with 3 lakh passengers recorded each month. Even after the AP airports record over 50% growth in footfalls in 2022-23, they are yet to come out of the losses.

  • Published On Dec 7, 2023 at 03:58 PM IST

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