Falling Numbers
Cruising Heights|July 2019

Jet Airways’ closure has meant a decline in the earnings of the country’s top airports, especially Delhi and Mumbai. Taking a look at the diminishing numbers at most airports, AMEYA JOSHI points out that while it will take some time to get back to the growth path that existed for the last five years, every airport operator will have to bear up with lower passenger service fee (PSF) and User Development Fee (UDF).

Ameya Joshi
Falling Numbers

As Jet Airways truncated its schedule and eventually suspended operations on April 17, 2019, apart from the passengers – there was one more entity which started at trouble. This was the airports business. Every time a plane lands or takes off, the cash registers at airports start ringing and the airport experiences the same seasonality and profitability cycle as the airlines since 100 percent of its business is directly or indirectly dependent on the airlines.

Airports revenue is classified into aeronautical and non-aeronautical. Aeronautical revenue rings in every time an aircraft lands or takes off. The aeronautical revenue comprises:

Landing & Route Navigation Facilitation Charges (RNFC)

Every time an aircraft lands, it has to pay charges for using the airport and services of the Air Traffic Control (ATC). This includes the Route Navigation and Facilitation charges that are calculated on the weight of the aircraft and the distance it has flown.

Use of facilities

Airlines use aerobridges, check-in counters, office space at airports, facilities like ground handling, fuel services, etc. Every such service is charged and most of it is either per unit of time or per departure. Airports earn from every departure of the airline.

The biggest non-aeronautical revenue comprises:

Retail

Every time a passenger spends at the airport, the airport operator makes money. Worldwide, most airports have a revenue-sharing arrangement with airport retail, wherein the airport earns a fixed amount of rent every month and earns a percentage of the sale, over and above. If you ever wondered why things are expensive at airports, you now have an answer.

This story is from the July 2019 edition of Cruising Heights.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the July 2019 edition of Cruising Heights.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM CRUISING HEIGHTSView All
New Terminal for Dehradun
Cruising Heights

New Terminal for Dehradun

The newly constructed terminal building at Dehradun Airport was officially inaugurated on February 14, representing a significant step forward in enhancing infrastructure and connectivity in the northern state.

time-read
1 min  |
February 2024
Gearing up for Propulsive Efficiency ROLLS
Cruising Heights

Gearing up for Propulsive Efficiency ROLLS

Aero-engine manufacturers are accelerating the development of next-generation powerplants for commercial aviation. A special report

time-read
8 mins  |
February 2024
Mission Gaganyaan: ISRO gets back to work
Cruising Heights

Mission Gaganyaan: ISRO gets back to work

The Indian human spaceflight programme has the potential to create an all-new aerospace ecosystem for setting up associated industries, boosting thousands of MSMEs in the sector and creating at least 15,000 jobs for Indian youth related to the domain. An in-depth report

time-read
10+ mins  |
February 2024
Greenwash or Sustainability?
Cruising Heights

Greenwash or Sustainability?

As the pressure to reduce their carbon footprint grows on airlines, the industry grapples with a complex set of options with no clear visible goal in sight. As things stand, the 2050 zero carbon goal seems pretty elusive.

time-read
9 mins  |
February 2024
Air Power and India's Northeast
Cruising Heights

Air Power and India's Northeast

India’s Northeast is being connected to the rest of India as never before. With the operationalisation of Hollongi Airport in Arunachal Pradesh state's capital of Itanagar, every state in the region is now connected with the rest of India. A report on the region and its aviation potential.

time-read
10 mins  |
February 2024
The real regional CONTENDERS
Cruising Heights

The real regional CONTENDERS

ATR and Embraer are bullish on market prospects for their regional transport aircraft A Special report

time-read
9 mins  |
February 2024
WINGS INDIA FLIES
Cruising Heights

WINGS INDIA FLIES

The 2024 edition of Wings India conducted in February in Hyderabad saw the participation of all the industry heavyweights. There were a few orders and some interesting announcements. A Special report.

time-read
7 mins  |
February 2024
A321XLR: Likely delay in delivery!
Cruising Heights

A321XLR: Likely delay in delivery!

Touted as a game-changer that could see single-aisle long-haul travel, the A321XLR has hit a roadblock in the form of regulatory issues surrounding its additional fuel tank that was to be fused directly into the fuselage. Added to that are supply chain woes. When all that was settled came news that the certification process has extended the timeline, with Airbus CEO Guillaume Faury acknowledging that the process is taking longer than initially anticipated. The aircraft could now see a delay in the entry for service with the timeline moving to likely late 2024. An insight into the developments.

time-read
9 mins  |
February 2024
New Terminal for Dehradun
Cruising Heights

New Terminal for Dehradun

The newly constructed terminal building at Dehradun Airport was officially inaugurated on February 14, representing a significant step forward in enhancing infrastructure and connectivity in the northern state.

time-read
1 min  |
February 2024
Gearing up for Propulsive Efficiency
Cruising Heights

Gearing up for Propulsive Efficiency

Aero-engine manufacturers are accelerating the development of next-generation powerplants for commercial aviation. A special report

time-read
8 mins  |
February 2024