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Fairfax-owned Bangalore International Airport Limited (BIAL) faced a financial loss of Rs 356 crore in FY22 due to COVID-19.
Business Standard has analysed BIAL's Annual Financial Statement: "The increased airfares due to higher ATF (Aviation Turbine Fuel) prices, rising inflation, and geopolitical developments may impact domestic and international traffic recovery. But the outlook for FY23 undoubtedly remains positive.”
ATF expenses account for over 40% of an airline's overall operating budget, impacting its capacity to make a profit. ATF prices have fluctuated wildly over the past few months amid the Russia-Ukraine conflict.
According to a BIAL spokesperson, the airport operator has introduced new operational strategies and financial restructuring to increase connectivity and overall performance despite the difficult conditions during the pandemic.
“As a result, Bengaluru airport welcomed 16.3 million passengers in the current financial year until the last week of October 2022. This is against 6.61 million passengers during the same period last year.”–BIAL Spokesperson
According to the spokesperson, BIAL's financial performance is showing significant improvement as recent months have seen passenger volumes return to pre-Covid levels. He continued by saying that the aviation sector is still recovering. Furthermore, the airport's operator is optimistic about the future growth of the airport.
Bengaluru airport saw its greatest volume of traffic in FY19 with 33.3 million passengers. This number decreased slightly to 32.36 million in FY20. The pandemic was in full stride during FY21, therefore the reduction, at 10.91 million, was substantial. After that, in FY22, there was a slight improvement as the number increased to 16.3 million.
BIAL's at least six-year sequence of profitability ended in FY21 as a result of Covid. During FY21, BIAL suffered a net loss of Rs 542.96 crore. During FY22, this loss decreased by 34.26 per cent to Rs 356.89 crore.
“Despite the second and third waves severely denting domestic passenger demand through the months of April 2021-June 2021 and December 2021-January 2022, it was a year of recovery. The aviation industry showed great resilience to bounce back from the impact of recurrent Covid waves.”–BIAL’s Annual Financial Statement
Passenger trust in flying increased as a result of the government's emphasis on vaccinating the bulk of the public against Covid in a short amount of time, the report claimed. According to the report, India's domestic traffic recovery appears to be on track to reach pre-Covid levels in FY23. Since March 27 of this year, India has restarted regularly scheduled international flights after a two-year ban owing to the pandemic.
“With increased vaccination across the world and relaxation in international travel restrictions announced by the government, as well as globally, recovery in international passenger traffic is expected to improve. The industry is expected to recover to pre-Covid levels by FY24.”–BIAL Statement
The development of aviation cargo traffic is still significant. In FY23, growth above pre-Covid levels is anticipated at the majority of India's main airports.
Source: Business Standard
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