Chennai airport registers steep decline in profit – Times of India

CHENNAI: Passenger traffic may be reviving gradually at Chennai airport, but the facility was not making much money in the pre-Covid-19 days too.
The airport made a profit of Rs 22.65crore in 2019-20, which is a severe dip from the Rs 455crore it profit earned in 2017-18. Its profit fell to Rs 5crore the next year in 2018-19 and then revived, information tabled in the Rajya Sabha shows.

Sources said that the drastic dip in the profits at Chennai airport is because user development fee for international terminals had to be slashed after Airports Economic Regulatory Authority (AERA) barred the airport from collecting user fee when the new international arrival terminal was lying unused. This affected its revenues in subsequent years.
Another reason for a dip in profits is a change in the landing and parking fees because of the construction work going on in the airside.
“A few parking bays had to be rearranged to accommodate the expansion work that was going on the airside. This is likely to have caused a revenue loss,” said an official.
The taxiway work and parking bay work were going on in the years when the airport took a hit in its income.
Defaulting airlines, absence of adequate retail and food and beverages hubs in the terminal, absence of adequate passenger utilities, troubles in car parking contracts are considered to be other reasons for the decline in profits.
Unlike private airports of Bengaluru and Hyderabad, Chennai airport is also struggling to encourage airlines to help it become an aviation hub. Similarly, except for flights to Dhaka, the airport has not seen any flights to new destinations. Though there are many passengers to the US and Europe, airlines have chosen to start services from Bengaluru.
The Rs 22.65crore profit earned before the pandemic began is more or less the same as the profit earned by a small airport like Trichy and Coimbatore. In Tamil Nadu, Chennai, Trichy and Coimbatore registered profits while Madurai suffered a loss. In 2019-20, Chennai airport handled 57, 99, 287 passengers while Trichy handled 13, 16, 419 passengers.
Sources say that the airport is likely to be in the red because of the impact of the Covid-19 on their revenues. AAI is struggling to cajole businesses in its terminals to stay by offering them discounts in license fee.