4 key pvt airports need `27,000 cr to expand capacity, says Crisil

Four major private airports in the country will require an investment of Rs 27,000 crore in expanding the existing capacity, which has reached near optimum level, by 2021, a report said on Wednesday.

The four private airports -- New Delhi, Mumbai, Hyderabad and Bengaluru -- cater to nearly 55 per cent of the country's total air traffic. These airports are operating at near-full capacity and will need to spend heavily on expansion through 2021, said the report by ratings firm Crisil.

"Because of surging footfalls and high capacity utilisation of over 90 per cent, we estimate the four airports would need to invest Rs 27,000 crore for expansion," Crisil Ratings President Gurpreet Chhatwal said. Yet, their credit quality will remain healthy because of business model strength backed by robust traffic growth and predictable cash flows under a regulated tariff framework, the rating outfit said.

According to the firm, air passenger traffic in the country grew 20 per cent in the last fiscal which was a big leap over the sedate 9 per cent average seen since 2011.

Bengaluru and Hyderabad airports have clocked even faster growth of over 24 per cent, the report said, adding rising private consumption and healthy economic growth would continue to provide tailwind to traffic growth at airports. Of the four aerodromes, GMR group runs Delhi and Hyderabad airports, while GVK group operates Mumbai.

In the Bengaluru airport, India-born Canadian billionaire Prem Watsa's Fairfax holds 38 per cent, while Germany's Siemens Project Ventures GmbH has 26 per cent stake.

Besides, state-owned Airports Authority of India and Karnataka State Industrial and Infrastructure Development Corporation hold 13 per cent each. The rest 10 per cent holding is with the GVK group. Despite such massive funding requirement, credit quality of these airports will not suffer because of low implementation risk.