Regulator snubs revenue projections at Adani airport in Thiruvananthapuram
The Adanicontrolled Thiruvananthapuram airport’s projection of revenue from nonaeronautical services such as the sale of food and beverages — used to subsidise costs levied on airlines and passengers — is just a “minuscule” 12% of the norm, according to the country’s airport tariff regulator. It is only a third of what the airport earned before privatisation.
The Airports Economic Regulatory Authority (AERA) has recommended that this revenue projection should be hiked fourfold, from the ₹103 crore proposed by the airport to ₹395 crore, over five years. The Adanirun airport has dismissed the AERA’s projection as “notional revenue”.
Contract questioned
The AERA has also questioned how the master contract for nonaeronautical services was awarded to an Adani group subsidiary, with restrictive bid criteria and “a low revenue share of 10%”.
This structure led to the airport operator reducing the mandatory 30% of nonaero revenue — which must be funnelled back for crosssubsidising the costs borne by airlines and passengers — to 30% of only the 10% of revenue shared, that is, a mere 3% of the total. This arrangement will impact airport users, the
AERA has said.
The global airlines body, the International Air Transport Association, has also said that this formula is “not justified”.
These observations were made in a consultation paper floated by the AERA on February 12 to determine the revised tariff for the fiveyear control period, from April 2022 to March 2027.
It invited various stakeholders, such as airlines, airports, and ground handling agencies, to submit their comments by March 15, after which it will issue a tariff order.