Hey
everyone, I was thinking about how our airport revenue breakup matched up with
those of other airports around the world. On an average, it seems that both
aeronautical and non aeronautical revenues have an equal contribution to the
total revenue. Why is the case so different in India with non aeronautical
being far greater than aeronautical?
When you compare
passenger traffic at IGI to say, Heathrow, you would find that London has
almost double the footfall of Delhi. But if you compare aircraft movements,
Heathrow has just 30% more than IGI, which should indicate that New Delhi makes
a far greater percentage of its revenue from aeronautical sources when compared
to London.
In addition to that, a huge number of people stop over at London in
transit to their final destinations, which should push Heathrow’s non
aeronautical revenues up even further. But this is the exact opposite of what we actually see. Any thoughts on why this is the
case?
This is an
interesting, albeit slightly old presentation that has a breakup of the kind of
fees you would expect to fall under the aeronautical revenues category. It also
talks about the different ways in which an airport can be owned and managed. Not sure how many of these are charged in airports at home, but it's worth a quick brush through.
4 comments:
Hey I came across two articles which explain the reasons for this disparity.As the present tariff rates imposed by the AERA(Airport Economic Regularity Authority) at the IGI airport are the lowest compared to other airports in the world, IGI and the Mumbai International Airport generate marginal revenues compared to similar airports abroad. Delhi and Mumbai airports lie at the bottom of the list of revenue generated by 50 airports worldwide prepared by Leigh Fisher Management consultants.
Following are the two links:
http://www.indianexpress.com/news/delhi-mumbai-airports-earn-least/916178/
http://businesstoday.intoday.in/story/delhi-world-costliest-airport-for-international-airlines/1/23911.html
Interesting read. There are a few possible explanations for the observations-
1. The average aircraft size(capacity) at Heathrow could be larger than that at IGI which would explain why lesser aircraft movement is able to mobilize more passengers.
2. Heathrow has a lot more long distance international traffic than IGI. Long distance carriers tend to have a greater susceptibility to being late and spend longer times at hangers. The time spent at hangers generates a lot of aeronautical revenue.
3. Maybe rather than looking at the percentage contribution, you should look at the absolute values of aeronautical and non-aeronautical revenues generated per passengers at IGI and Heathrow- it might tell you a different story.
Hope this helps.
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