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G.K. Nair

KOCHI, Dec. 16

THE Cochin International airport at nearby Nedumbassery, the first ever private sector airport in the country, is likely to post a profit of over Rs 2 crore during the current fiscal.

Improvement in revenue coupled with cost-effective operations has steered the airport to post profits, probably for the first time ever since it commenced commercial operations on June 6, 1999.

"We may have a profit of around Rs 2/3 crore and if a settlement with the Hudco materialised as expected on time, then the profits would be substantial, because debt servicing has been eating into the profits of the company all these years," Mr Babu C. Rajeev, Managing Director, Cochin International Airport Ltd (CIAL), told Business Line on Monday.

He said that the meeting of the board of directors of the company had been convened for December 24 at Thiruvananthapuram, mainly to discuss and decide on the quantum of shares to be issued to Hudco, which had responded positively to the company's proposal offering equity participation in CIAL.

The board's concurrence was needed to proceed further in the process, he said. However, final decision would be subject to the approval of the Hudco board, he said.

Probably for the first time Hudco would be participating in the equity of a private sector company involving substantial amount, he pointed out. The corporation had already responded positively to CIAL's demand for a reduction in interest rate on the existing loan of Rs 139 crore, abolition of penal interest and low rate of interest for the future loan, he said. Following a settlement with Hudco the recurring liability would go down substantially, he said.

The company is in the process of expanding its capital base from Rs 90 crore to Rs 200 crore through private placements and rights issue so as to reduce its high cost loan liability. The amount raised would be used for repayment of such loans. Already it has liquidated the loans with State Bank of Travancore and a cooperative bank.

Though the Airports Authority of India (AAI) had shown interest in acquiring stake in CIAL at all the meetings held at Civil Aviation Minister's and Secretary's level, a specific offer in writing was yet to be received, he said. The board was expected to take a decision on the quantum of shares to be made available "as we have a limit on the authorised capital," he pointed out.

Mr Babu Rajeev said that there had been an overall improvement in the performance of the airport in passenger and cargo traffic and duty free shop sales. The number of weekly flights had gone up to 78 now including the Air India's operations to the US. The Emirates Airlines is going in a big way to airlift cargo from here.

It had already negotiated with the garment manufacturers of Tirupur in Tamil Nadu and was said to have reached an agreement with them to transport their cargo from here as there are excellent connections to Dubai. The consignments from there would be transported to Nedumbassery by road after completing all the customs formalities at the inland container depot at Coimbatore, he said.

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