Fairfax-owned Bangalore International Airport (BIAL), which operates India’s third-busiest airport in Bengaluru, has incurred a net loss of Rs 356.89 crore in FY22 due to the continuing impact of Covid-19.
In contrast, GMR Group-owned Delhi International Airport (DIAL) — which operates India’s busiest airport in Delhi — saw a net profit of Rs 17.68 crore in FY22.
Adani Group-owned Mumbai International Airport (MIAL) — which operates India’s second-busiest airport in Mumbai — incurred a net loss of Rs 177.17 crore in the last financial year.
BIAL’s annual financial statement — which has been reviewed by Business Standard — stated that, “The increased airfares due to higher ATF (aviation turbine fuel) prices, rising inflation, and geopolitical developments may impact domestic and international traffic recovery. But the outlook for FY23 undoubtedly remains positive.”
The cost of ATF forms around 40 per cent of total operating cost of airlines and impacts their financial viability. Amid the Russia-Ukraine war, ATF prices have shown immense volatility in the past several months.
A BIAL spokesperson said that despite the challenging environment during the pandemic, the airport operator has implemented new operational strategies and financial restructuring to improve connectivity and general performance.
“As a result, Bengaluru airport welcomed 16.3 million passengers in the current financial year until the last week of October 2022. This is against 6.61 million passengers during the same period last year,” the spokesperson added.
The financial performance of BIAL is registering strong growth as passenger volumes in recent months have gone back to pre-Covid levels, the spokesperson said.
He added that the aviation industry is continuing to recover. And. the airport operator is confident that its growth trajectory will continue in the years ahead.
Bengaluru airport handled its highest number of passengers in FY19 at 33.3 million. In FY20, this figure came down marginally to 32.36 million. As the pandemic was in full swing during FY21, the reduction was significant at 10.91 million. Then, in FY22, there was some recovery as the figure went up to 16.3 million.
In FY21, BIAL’s profit-making streak of at least six years came to an end due to Covid. BIAL incurred a net loss of Rs 542.96 crore during FY21. This loss came down by 34.26 per cent during FY22 to Rs 356.89 crore.
In its annual financial statement, BIAL stated: “Despite the second and third waves severely denting domestic passenger demand through the months of April 2021-June 2021 and December 2021-January 2022, it was a year of recovery. The aviation industry showed great resilience to bounce back from the impact of recurrent Covid waves.”
The government’s focus on Covid vaccination to cover the majority of the population in a short span of time boosted passenger confidence in air travel, it said.
Domestic traffic recovery in India seems to be on track to recover fully to pre-Covid levels in FY23, it added.
After a two-year-long suspension due to the pandemic, India resumed scheduled international flights from March 27 this year.
“With increased vaccination across the world and relaxation in international travel restrictions announced by the government, as well as globally, recovery in international passenger traffic is expected to improve. The industry is expected to recover to pre-Covid levels by FY24,” BIAL added.
The traffic growth in air cargo remains robust. Most major airports in India are expected to post growth over the pre-Covid levels in FY23, it added.