India Ratings and Research has maintained its positive outlook for Indian airports on the back of traffic recovery and over 30 per cent growth in non-aeronautical revenue.
According to India Ratings and Research, international passenger traffic at Indian airports shall exceed pre-Covid levels in FY 2024 led by easing of travel restrictions, availability of direct flights and overall improvement in travel sentiments.
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While international traffic is yet to recover fully to pre-Covid levels, domestic passenger traffic handled by Indian airports surpassed the pre-Covid levels in first quarter FY 2024.
According to Airports Authority of India (AAI) in April-June quarter FY 2024, Indian airports handled 76.7 million domestic passengers and 16.2 million international passengers.
In comparison, Indian airports had handled 67.6 million domestic passengers and 16.8 million international passengers in same period in FY 2020, AAI data shows.
An another positive trigger for positive outlook is the growth in non aeronautical revenue at Indian airports. According to the rating agency, non-aeronautical yield per passenger at private airports rose from Rs 199 in FY 2019 to Rs 264 in FY 2023. Similarly the share of non-aeronautical revenue in total revenue at the private airports grew from 48 per cent to 51 per cent in this period led by expansion of terminals and new initiatives.
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Non aeronautical revenue refers to income from sources like duty free sale, retail, food & beverage, car parking, advertising among others.
The airports shall broadly continue to experience tailwinds in FY24. Positive ratings actions in India Ratings portfolio were majorly driven by the near completion status of capex, favourable cash flow positioning, traffic recovery, rise in the proportion of non-aero revenues and performance exceeding Ind Ratings base case estimates,” the ratings agency said.
“Although the sector remains sensitive to fuel prices and macroeconomic uncertainties, airports have maintained sufficient cushion to remain resilient to medium-term shocks,” it added.
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