The Delhi International Airport Ltd (DIAL), which reported a loss of Rs 229 crore for the three-month period ending December 31, 2011, is now waiting for the airport regulator to revise tariffs next week.
The loss comes even as traffic at the airport grew 29 per cent during October-December. DIAL is a part of GMR Group.
Profits of the second airport run by GMR, the Hyderabad International Airport, have also declined. During the quarter ended December 31, 2011, the airport's net profit was down to Rs 8.7 crore from Rs 12.3 crore during third quarter of 2010-11. DIAL posted a loss of Rs 164 crore during the last quarter of 2010-11.
The airport operator fears a total loss of Rs 995 crore for the full financial year. If this happens, then combined with the accumulated loss, over 55 per cent of its net worth is likely to be eroded at the end of 2011-12. DIAL said that another year with the current tariffs at the airports would completely erode its net worth. Its net worth is Rs 2,450 crore, of which Rs 1,362 crore is estimated to be eroded by March 31, 2012.
Meanwhile, the company is expecting a favourable order from the Airport Economic Regulatory Authority (AERA). Mr G.M. Rao, Group Chairman, GMR, said, “Implementation of the revised tariff, expected soon, will be an extremely significant development for DIAL and for the company, as it would shift the company toward stronger cash flows and profitability.”
The airport operator is pushing for over 700 per cent increase in airport tariff, while AERA is seeking a view on increase of 280 per cent only. The consultation process is over and the regulator is expected to give its final order by February 15. Delhi Airport tariffs have increased by just 10 per cent, as compared to the consumer price index that has gone up by 200 per cent since 2000.
Meanwhile, industry sources have questioned the foreign airlines' complaint against higher charges at Delhi Airport. These airlines, during the consultation, threatened to withdraw their flights if tariffs are hiked. “If you take the total revenue from Delhi, then charges paid to Delhi Airport operators will be between 1-4 per cent. So, it is hard to understand why they are opposing,” said a source.