Cochin airport to invest up to Rs1600 crore in next 3 years
- Sabarimala airport investment is envisaged at about Rs3,500 crore
- CIAL is yet to tie up the debt part
- CIAL has introduced user development fee from April 1, 2022
Kochi: The Cochin International Airport Ltd (CIAL) has prepared a blueprint to spend Rs1500 crore to Rs1600 crore during the next three years to pursue several key developmental works, according to sources.
Interestingly, the work on the state’s fifth international airport, Sabarimala, is forging ahead, with an envisaged investment of about Rs3,500 crore, apart from the land.
The investment at the Cochin airport is proposed to be funded through a mix of freshly raised equity of around Rs 478.2 crore came through its rights issue, internal accruals and debt.
However, CIAL is yet to tie up the debt part, according to ICRA, the leading credit rating agency.
CIAL is currently undertaking expansion of T3 terminal, cargo complex, construction of airport hotels, revamping of IT systems and scanning equipment and construction of commercial complex ,among others.
User fee again hiked
According to ICRA, the revenues of CIAL are expected to increase by more than 15 per cent in the current financial year 2023-24 (FY24) due to the increase in user development fee (UDF) from April 1, 2023, aeronautical tariffs, growth in overall passenger traffic and higher non-aeronautical revenues.
CIAL that introduced UDF from April 1, 2022 has already hiked these fee during FY24, with the domestic UDF going up from Rs180 to Rs230 and the international user fee being raised from Rs400 to Rs500 per traveler.
CIAL’s FY23 revenue had witnessed a growth of a whopping 87 per cent to Rs940 crore compared with that of the previous year, when the air traffic was yet to pick up after the COVID season.
The stiff competition from four international airports situated within 300 kilometres radius from CIAL, viz. Trivandrum International Airport, Calicut International Airport, Coimbatore International Airport and Kannur International Airport, is all set to intensify once the Sabarimala airport, the fifth international airport in the state, takes off.
While CIAL where the state government holds the largest stake at 32.4 per cent, has been a profit making venture in most years, right from its inception, Kannur airport, another airport project, where Kerala Government owns close to 40 per cent, is yet to break even.