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Covid-19 impact: BIAL revenues 75% lower; expects large losses this fiscal: Hari Marar

Anil Urs Bengaluru | Updated on October 09, 2020 Published on October 09, 2020

Hari Marar, CEO & MD , BIAL

Capex cost for expansion not expected to be revised; despite lack of labour and supply chain disruptions, expansion to be completed within date stipulated in loan agreements

The aviation industry in India, like in the rest of the world, is in a major turmoil because of the pandemic. Airports have seen a significant drop in passenger traffic. In an interview with BusinessLine, Bangalore International Airport Ltd CEO & MD Hari Marar talks about the immediate issues that the airport has to deal with and how it is transforming its operations to allow seamless transit of passengers, making it safer for them. Excerpts:

 

How are the airports, especially BIAL, transforming themselves to make it easier and safer for passengers to transit from one destination to another?

While Covid-19 appears to have put a pause to our growth for 18-24 months, the slew of confidence-building measures put in place will ensure that aviation returns to its high-growth trajectory in the coming years. The pandemic has helped us reset and plan the new normal, and ensure that aviation continues to be the safest and fastest mode of travel. Passengers are witnessing a massive transformation in air travel in the post pandemic world. Processes and procedures have changed to support new norms of social distancing, contactless travel and enhanced health and safety. In a post-Covid-19 world, we believe that biometrics and digital technology will play a major role in enhancing passenger experience and providing better safety and security. Airlines and airports in India, whose relationship has been characterised by friction, have come together over the past few months to put passenger safety during their journey at the centre of all decisions.

What are the innovations that BIAL has brought about to sustain its operations?

Our airport has embarked on a digital transformation journey to enhance customer experience at every touch point, much before the onset of Covid-19, including DigiYatra (contactless biometric boarding), business intelligence and data analytics, process automation, customer-facing web and mobile upgrades and IoT-enabled technology. Interestingly enough, Vistara and AirAsia India flights are already DigiYatra-enabled at BLR airport.

What kind of impact has the pandemic had on BIAL?

Over the past six months, traffic has been severely impacted at all airports globally, and BLR airport isn’t any different. In the pre-Covid-19 period, BLR airport used to handle about 95,000-100,000 daily passengers. Over the past few months, as operations have recommenced and flights have increased, our daily passenger traffic has increased from about 10,000 daily passengers to about 30,000 daily passengers. We are hopeful that the traffic will slowly stabilise over the coming months as passenger confidence returns, and people begin to fly again. We strongly believe that flying is the safest mode of public travel and that our passengers will return. On the cargo front, we have steadily recovered to pre-Covid-19 levels at BLR airport.

How much loss has BIAL incurred during these last few months?

Airport revenues in April, May, and June were almost non-existent, since BIAL’s revenues are largely dependent on user fees, parking charges, and non-aeronautical revenues. Overall, revenues are about 75 per cent lower and we expect large losses during this financial year for BIAL.

Has BIAL availed loan payment moratorium?

BIAL has availed the loan payment moratorium on the loans taken for the earlier expansion projects. However, the moratorium is not applicable for the current expansion bank loans covering the new runway and T2 construction.

Is your capex plan on target or has it been revised due to the pandemic?

The capex cost for the expansion project is not expected to be revised as BIAL expects to complete the expansion project within the funded cost. There may be some delays in completion of the T2 project from the earlier internally-set target date on account of the reduction in labour and supply chain disruptions due to the pandemic. However, the completion will be within the date stipulated in the loan agreements.

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Published on October 09, 2020
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