Bangalore airport launch delay costs BIAL Rs 40 cr

Bangalore airport launch delay costs BIAL Rs 40 cr

New target date fixed as May 11

“The infrastructure and everything is there, our people are there, but there is no revenue.” – Mr Albert Brunner.



Mr Albert Brunner

Madhumathi D.S.

Bangalore, April 11 The 40-day postponement of its commercial launch is apparently costing the Bangalore airport developer BIAL almost Rs 40 crore.

It is very important for BIAL to have the new target date and to stick to it. “We now aim for the 11th of May,” Mr Albert Brunner, CEO of BIAL, said.

“We have a loss of approximately Rs 40 crore, at roughly a crore a day. The infrastructure and everything is there, our people are there, but there is no revenue,” Mr Brunner told Business Line.

BIAL’s revenue comes from 3-4 categories of airport users: the user development fee charged on departing passengers; from airlines as landing and parking fees; and from its various concessionaires who have to pay royalties or a pre-negotiated percentage of their turnover to the company. The main aviation and non-aviation businesses currently include two each of aviation fuel farm operators; cargo- and ground handlers; food and beverage outlets; retail businesses; and in-flight caterers.

He did not say if he had counted all these sources in the revenue plan or how much came from each category.

BIAL had planned to start operations of the Rs 2,500-crore greenfield airport on March 30. The Ministry of Civil Aviation stalled it till May 10 as AAI’s air traffic controllers sought more time to train on the site.

“We are disappointed with [the postponement.],” Mr Brunner said. “The concessionaires accept it as they are certain that it is out of our control. So far they have reacted very reasonably. But they will not be if it is postponed again.”
TALKS ON USER FEE

The July 2004 concession agreement with the Ministry of Civil Aviation allows BIAL to charge the airport user fee or UDF of Rs 675 on domestic and Rs 955 on international travellers. User groups have questioned this levy. This is also an issue on the public interest litigation filed in the Karnataka High Court.

Mr Brunner admitted that on the one side, there was pressure from the Government to slash the UDF, in particular on domestic travel, as in the case of the Hyderabad airport. On the other, IATA, the nodal air travel body, had backed BIAL’s levy, while not approving two rates for domestic and foreign travellers who used the same facilities.

He said, “We are in discussion [with the Government] and have almost found each other. We have to negotiate with them on what is a reasonable amount. However, I have not received formal confirmation from them to say what we have agreed on.”

BIAL, he said, was firm on having a minimum level of the UDF to cover its investments so far and an upcoming expansion. “Otherwise we cannot survive.”