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G R N Somashekar

Difficult times: Mr Albert Brunner, CEO, Bangalore International Airport Ltd, addressing a press meet in Bangalore on Wednesday. —

Our Bureau

Bangalore, Nov. 12 Barely six months into operation and troubled times in the air have started telling on the Bengaluru International Airport.

Airport operator BIAL’s Chief Executive Officer, Mr Albert Brunner, said the airport is grappling with monthly losses of Rs 22 crore – amounting to around Rs 130 crore for the first half-year. He attributed the losses to non-payment of Rs 59 crore by airlines, overall traffic dip and the delay over Ministry’s approval of a user development fee (UDF) on domestic fliers.

“Financially we do have a problem,” Mr Brunner admitted at a news conference at Devanahalli on Wednesday. “There has been less traffic than anticipated. Some airlines have not made payments on time. But the most important thing is the delay over the (domestic) UDF. It’s November and we still don’t have it. This is a difficult time.” The GMR-run Hyderabad airport was granted a domestic UDF of Rs 375 from August.

The new airport apparently did not seek bank guarantees from domestic carriers that it could have encashed now. “(Non-payments on landing and parking fees) are not only at our airport. Airlines are struggling. This is a delay, not default. We need to find a solution. We are in touch with them,” he said.

The airport has lowered its traffic projection for 2008-09 to 9.2 million, down from 10.5-11 million passengers – a number that seemed too easy to achieve when it started operating on May 24 this year. So far it handled 4 million passengers and 50,500 aircraft movements - “a significant drop-down from the figure we had.”

BIAL will decide on the second phase of construction to add another terminal and runway in a couple of months after studying traffic trends. An interim express terminal that it had planned is on hold. However, the expansion has to take place in 4-5 years, he said. This also pushes back the break-even or profit-making time beyond the five years expected earlier, he said.

BIAL also plans to make further investment of Rs 4,000-5,000 crore (earlier estimated at Rs 3,500 crore) in phase 2. Mr Brunner said, “Since June 2008, there has been a significant fall in monthly traffic for all airports in India. Current projection for the year 2008 -09 is 9.2 million passengers. We are conducting a study on the current trend and based on the results, which will be out in 2-3 months, we will take a decision on our next expansion.”

BIAL has reserved 215 acres of its 4,000-acre campus to be leased for commercial development as an ‘airport city’. In the current real-estate slump, it has also delayed this plan for some more months, Mr Brunner said. As non-aeronautical revenue, this along with stores inside the airport terminal would have offset its revenue shortfall.

In the crisis that hit airlines globally, summer season for BIA dipped from 170 to 162 flights a day. Winter traffic has slightly made it up to 165 flights a day with increase in international flights and launch of new routes: by Kingfisher to London; Jet Airways to Brussels; and Air India to Abu Dhabi.

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