Delhi Airport is profitable, but not as much as you might think.
Delhi Airport is profitable, but not as much as you might think.
Delhi Airport Despite facing losses due to higher financing and depreciating expenses, GMR airport relies heavily on its non-aero verticals for revenue generation. Indira Gandhi International Airport in Delhi stands as India’s largest airport for both domestic and international passengers.
Owned by GMR Airports with investments from Groupe ADP, Delhi International Airport Limited reported a loss of INR 127.7 crore in the third quarter of FY24, attributing it to increased financing and depreciation expenses.
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Non-aero revenue played a pivotal role, contributing INR 759.7 crore, representing 57.4% of the airport’s total revenue for the quarter. This income saw a 12.5% increase from Q3-FY23 and an 8% rise from the previous quarter,
Delhi Airport underscoring the significance of non-aero sectors, such as malls, in airport concepts. Notably, non-aero income surpassed aero income by 2.8 times. Aero revenue reached INR 269.9 crores, growing by 7.2% year over year.
The airport served 18.8 million passengers, experiencing an 8.5% YoY increase in air traffic, leading to elevated spending on retail, food and beverages. The retail and duty-free segments contributed to the 11% YoY growth in non-aero revenue. Additionally, Aerocity rentals witnessed a 39% increase, reaching INR 195.6 crore in the most recent quarter.
For the nine months ending in December 2023, Delhi’s non-aero revenue totaled 21.7 billion rupees, with 19% from space rentals, 28% from retail, and over 1.5 billion rupees from advertising. The average duty-free expenditure per passenger was INR 1005.
The GMR group aims to boost non-aero revenue, aligning with a global trend among airports to offset development costs. Long-term concessions, city-side development, and non-aero business are explored as revenue sources.
With non-aero revenue constituting approximately 40% worldwide, Delhi Airport seeks to enhance its appeal by attracting international food and retail brands, Delhi Airport emphasizing the importance of a diverse shopping and dining experience without compromising service quality in security checkpoints, check-in, and waiting areas.
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