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BUSY but poor: Four million passengers have used the new Bangalore airport in the last six months but profits don't match File pic |
According to Albert Brunner, CEO of Bengaluru International Airport Limited (BIAL), the airport is losing a minimum of Rs 20 crore per month and it has incurred losses of more than Rs 130 crore in six months of its inception last May.
"At this rate we are asking for trouble. We have to look for alternative means of revenue, otherwise it will be difficult to survive. Real estate development is one of the options as a long-term plan."
However, BIAL can't go ahead with this venture, as the real estate market is witnessing a downturn.
Building townships
Brunner said the airport will develop the available 200 acres of land in three phases. While in the first phase, townships will be developed, shopping malls and other commercial establishments will be added in the second phase. In the third phase, buildings will be built to house corporate offices.
Other options being considered for revenue generation are hospitality and renting out more space in the terminal for commercial activities, he said.
Two reasons were cited for BIA suffering losses. One is the government's reluctance to allow the airport to levy user development fee (UDF) on the domestic passengers and the other is the defaulting on airport charges by the airlines.
No returns
"We have invested Rs 2700 crore in the first phase and there must be returns on the investment. If we had allowed levying UDF, we could have pegged a big revenue gap that is showing up. It is a very unfortunate thing that our voice is not being heard."
He said charging UDF at the rate of Rs 675 per domestic passenger was inevitable for the airport's survival. In the past six months, four million passengers had used the airport and the airport had lost so much of money by not levying UDF, Brunner said.
The defaulting airlines are posing a big problem for the airport. While Brunner said the total amount of dues was Rs 59 crore, sources in the airport revealed that it was crossing Rs 100 crore.
"We understand their problem," said Brunner. "But the airlines must help us to help them. Let them give us the payment schedule and we will co-operate.
"If airlines failed to pay the dues, the airport had to look into the option of encashing their bank guarantee."
