Rising Traffic to Lift Revenue of Private Indian Airports by 30% this Fiscal

Preet Palash

26 Apr 2024

An expected increase of 10% in passenger traffic on the high base of fiscal 2024, combined with capital expenditure (capex)-linked tariff hikes and rising non-aeronautical revenue per passenger, will help grow the revenue of leading private airport operators by around 30% this fiscal.

The rising revenue will restore the cushion for debt servicing to around 1.4 times, taking it back to the level last seen before the Covid-19 pandemic. Airports had dipped into their cash reserve to service debt during this period. Indian airports are led by GMR Infrastructure Ltd, Adani Airports and Airports Authority of India.

A CRISIL Ratings study of 10 private airports that accounted for an estimated 60% of overall passenger traffic in fiscal 2024 indicates as much.

Ankit Hakhu, Director, CRISIL Ratings said, “Taking off from the strong base of last fiscal, passenger traffic growth will continue its momentum in fiscal 2025 and rise more than 10% to over 415 million. Continuing economic growth, opening of more airports and improving regional connectivity are providing the tailwinds necessary for domestic traffic growth. On the international side, growing business travel and easing visa requirements to countries such as Malaysia and Vietnam, reducing wait times for visa applications to western Europe1 and improving connectivity to western and Southeast Asia are significant positives.”

As passenger volume rises, airports will see an increase in both aeronautical and non-aeronautical revenue. Aeronautical sources include fees collected from passengers, airlines and cargo operators for use of infrastructure. Non-aeronautical sources include advertising, retail, lounge and duty-free shops. About two-thirds of the increase in the revenue of airports is expected to come from aeronautical sources (~45% growth on-year). This is because almost half the airports in the CRISIL Ratings study will clock a pre-determined increase in their aeronautical tariffs by 25% on average.

Aeronautical tariffs are regulated and allow for cash flow required by airports to service the debt availed for aeronautical capex and a return on equity for the operator. Airports had undertaken significant expansion during the pandemic to more than double their capacity in anticipation of the current spurt in passenger volume. The current rise in aeronautical tariffs is compensating for these capacity expansions.

The remaining one-third of the revenue growth will be driven by non-aeronautical sources (~15% growth on-year). These have been increasing steadily, driven by rising passenger spends on retail and food and beverage, as well as real estate leasing and advertising.

Varun Marwaha, Associate Director, CRISIL Ratings, said, “The recovery in the revenue growth trajectory — after three years of decline led by the pandemic— comes at the right time to support the increasing debt obligations of private airport operators arising from the significant expansion during the pandemic period. With the projected increase in revenue, the debt cover of operators is expected to recover to 1.4 times, a level last seen before the pandemic between fiscals 2018 and 2020.”

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Boeing Reports Quarterly Revenue Drop Amidst Production Slowdown

Abhishek Nayar

26 Apr 2024

Boeing, the U.S. aerospace giant, recently announced its first quarterly revenue decline in seven quarters. This setback comes amidst challenges including a mid-air incident prompting production slowdowns, ongoing discussions about acquiring key supplier Spirit AeroSystems, and persistent issues surrounding its commercial airplanes division. Let's delve into the details.

Quarterly Performance and Analyst Expectations

Boeing's quarterly revenue stood at $16.57 billion, a decrease from $17.92 billion a year earlier but surpassing analyst expectations of $16.23 billion. Despite the decline, the company managed to beat lowered expectations following an incident involving a door plug in January, which led to production adjustments for its 737 MAX jets.

Acquisition Talks with Spirit AeroSystems

CEO Dave Calhoun expressed confidence in a potential deal to acquire Spirit AeroSystems during the second quarter. However, negotiations hinge on factors such as price and discussions with Spirit's customer, Airbus. Despite the complexities, Calhoun assured analysts that Boeing can proceed without full clarity on the Airbus side, emphasizing the company's autonomy in decision-making.

Financial Outlook and Cash Burn Concerns

Boeing's CFO, Brian West, acknowledged a "sizeable" cash burn for the second quarter, though an improvement from the previous quarter's $3.93 billion cash burn was anticipated. Challenges stemming from the January incident, including a nearly $4.5 billion cash burn, have contributed to concerns about financial performance.

Credit Rating Downgrade and Legal Implications

Moody's decision to downgrade Boeing's credit rating to the bottom of investment grade reflects ongoing headwinds in the commercial airplanes segment. Legal actions following the Alaska Airlines incident have also impacted the company, resulting in significant earnings charges and heightened scrutiny from regulators.

Regulatory Constraints and Production Challenges

The Federal Aviation Administration's imposition of a production cap on 737 MAX jets has forced Boeing to reassess its manufacturing processes. Output has been hampered as U.S. regulators intensify factory checks, necessitating a comprehensive plan to enhance quality control. Calhoun emphasized that production rates will not increase until these issues are resolved.

Leadership Transition and Production Goals

As Calhoun prepares to depart by the year's end, speculation surrounds potential successors, with commercial airplanes boss Stephanie Pope highlighted as a candidate. Analysts caution that the sluggish pace of deliveries may impede Boeing's efforts to achieve its financial and production targets, including a $10 billion annual cash flow goal by 2025 or 2026.

Supply Chain Disruptions and Market Dynamics

Supply chain disruptions, including shortages of airline seats and cooling parts, have impacted Boeing's production timelines, particularly for its 787 Dreamliner jets. Despite challenges, demand for aircraft remains robust, with both Boeing and Airbus navigating constraints in the narrowbody market.


Boeing's recent performance underscores the complex landscape facing the aerospace industry, with regulatory scrutiny, supply chain disruptions, and financial pressures influencing its trajectory. As the company navigates these challenges, attention will be on its ability to address production issues, execute strategic acquisitions, and regain investor confidence amidst a turbulent operating environment.

With Inputs from Reuters

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Are Airline Passengers Finally Getting a Fair Deal?

Abhishek Nayar

26 Apr 2024

After nearly three years of deliberation, the U.S. Transportation Department has implemented new rules aimed at providing greater transparency and protection for airline passengers. These rules, finalized on Wednesday, mandate upfront disclosure of airline fees and ensure quick cash refunds for canceled flights, delayed baggage, or inoperative services. But are these regulations truly a game-changer for travelers?

Upfront Disclosure of Fees and Automatic Refunds

One of the key provisions of the new rules is the requirement for airlines and ticket agents to disclose baggage, change, and cancellation fees upfront. This means consumers will have clearer information about the total cost of their airfare, including any additional charges they may incur.

President Joe Biden has been vocal in his criticism of the airline industry, citing instances where passengers have faced delays in receiving refunds or been hit with unexpected fees. The new mandate ensures automatic refunds for passengers when owed, eliminating the hassle of chasing down reimbursements.

Protection from Surprise Fees and Refunds for Canceled Flights

By requiring airlines to disclose extra service fees alongside fare information, passengers will have a better understanding of what is included in their ticket price. This aims to prevent the imposition of surprise fees, providing greater transparency and clarity for travelers.

Under the new rules, passengers are entitled to cash refunds for canceled flights, regardless of the reason, including weather-related disruptions. This represents a significant shift from previous practices, where vouchers or credits were often offered instead of cash refunds.

Prompt Delivery of Baggage

Passengers will also benefit from faster refunds for delayed baggage, with airlines required to issue refunds if bags are not delivered within specific timeframes. This ensures that travelers are not left waiting indefinitely for their belongings and are appropriately compensated for any inconvenience caused.

Guaranteed Seats and Prohibited Advertising

Airlines are now mandated to inform passengers that seats are guaranteed, eliminating the need for passengers to pay additional seat selection fees. Moreover, carriers are prohibited from advertising promotional discounts that do not include mandatory carrier-imposed fees, ensuring that consumers are not misled by deceptive advertising practices.

Future Considerations and Conclusion

While these new rules represent a significant step towards protecting airline passengers, there are still areas where improvements can be made. For instance, the Department of Transportation has yet to issue formal proposals regarding compensation for significant flight delays or cancellations caused by airlines.

The implementation of new rules by the U.S. Transportation Department marks a positive development for airline passengers, promising greater transparency, protection from surprise fees, and quicker refunds for canceled flights and delayed baggage. However, continued vigilance and further reforms may be necessary to ensure that travelers receive the fair treatment they deserve in the future.

With Inputs from Reuters

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Southwest Flight Attendants Secure Record Pay Raise

Abhishek Nayar

26 Apr 2024

In a resounding victory for Southwest Airlines flight attendants, a new contract has been ratified, heralding an immediate 22% pay raise. This landmark agreement, achieved after two previous unsuccessful attempts, marks a significant milestone in the ongoing negotiations between the airline and its labor force.

A Historic Win

Nearly 20,000 flight attendants exercised their voting rights, with an overwhelming 81% majority endorsing the new collective bargaining agreement. This pivotal decision not only guarantees an immediate boost in pay but also ensures incremental raises of 3% annually until May 2028. The Transport Workers Union's local chapter 556 facilitated this groundbreaking achievement, underscoring the power of collective bargaining in securing fair wages and benefits for workers.

Southwest Airlines' Progressive Approach

This victory is part of a broader trend within Southwest Airlines, which has been actively engaging with its labor unions to address long-standing grievances and enhance working conditions. Since October 2022, the airline has ratified contracts with eleven union-represented worker groups, signaling its commitment to fostering positive labor relations. Earlier this year, a landmark deal was struck with the pilots, promising a staggering 50% pay raise over a five-year period.

Industry-Wide Implications

Southwest's success in negotiating favorable terms with its employees is reflective of broader shifts within the aviation industry. Flight attendants at rival carriers such as American Airlines and United Airlines are also pushing for better pay and benefits, including compensation for time spent during boarding and on the ground. The outcome of these negotiations could set a precedent for industry standards and reshape the landscape of labor relations within the airline sector.

Looking Ahead

As Southwest Airlines continues to prioritize its workforce, the successful conclusion of negotiations with flight attendants underscores the importance of collaboration and compromise in achieving mutually beneficial outcomes. With this new contract in place, both the airline and its employees are poised to navigate the challenges and opportunities that lie ahead, ensuring a sustainable and prosperous future for all stakeholders.


The ratification of the new contract represents a triumph for Southwest Airlines flight attendants, who have secured a substantial pay raise and solidified their position within the company. This milestone achievement not only highlights the effectiveness of collective bargaining but also underscores the airline's commitment to fostering a positive and equitable work environment. As the aviation industry continues to evolve, Southwest's proactive approach to labor relations sets a commendable example for its peers, paving the way for a more collaborative and harmonious future.

With Inputs from Reuters

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Are LATAM and Boeing on Different Flight Paths Amidst Gol's Bankruptcy?

Abhishek Nayar

26 Apr 2024

In a recent turn of events, LATAM has announced its decision to abandon plans to acquire Boeing B737 planes from Gol or any other sources, opting instead to explore alternative options for narrowbody aircraft. This decision comes after failed negotiations between LATAM and Gol following Gol's filing for bankruptcy protection in the U.S. earlier this year.

Clash of Titans: LATAM vs. Gol

Shortly after Gol's bankruptcy filing, tensions rose between the two airlines, with Gol accusing LATAM of attempting to poach its planes and pilots. In response, LATAM offered to acquire any B737s that Gol would no longer operate post-restructuring. However, talks between the two airlines hit an impasse, with LATAM citing Gol's "lack of meaningful engagement" as a primary reason for the deal's collapse.

The Search for Alternatives

Facing the challenge of meeting rising consumer demand amidst the scarcity of available B737 aircraft, LATAM has been compelled to seek alternative solutions to bolster its fleet. Despite extensive efforts, LATAM has been unable to secure B737 aircraft from sources unrelated to Gol. As a result, the airline has expressed its reluctance to continue pursuing transactions involving the B737.

Boeing's Troubles Add to the Turbulence

The aviation industry has been grappling with safety concerns surrounding Boeing's best-selling 737 Max series, further complicating LATAM's aircraft acquisition plans. The U.S. Federal Aviation Administration (FAA) recently halted Boeing's 737 MAX production expansion following a mid-flight cabin blowout on an Alaska Airlines flight. This incident prompted the FAA to give Boeing 90 days to address systemic quality-control issues, with Boeing currently halfway through this period.

Navigating the Future

As LATAM navigates through the turbulence caused by Gol's bankruptcy and Boeing's production challenges, the airline industry watches closely to see how it adapts its business strategy to overcome these obstacles. With the need to meet increasing consumer demand while ensuring operational efficiency and safety, LATAM's decision to explore alternative narrowbody aircraft reflects the evolving dynamics of the aviation landscape.


The fallout between LATAM and Gol, coupled with Boeing's production setbacks, underscores the complexities facing the aviation industry. As airlines like LATAM seek to optimize their fleets and adapt to changing market conditions, the search for viable aircraft solutions becomes paramount. How LATAM and other industry players navigate these challenges will shape the future trajectory of air travel in the post-pandemic era.

With Inputs from Reuters

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Honeywell Helping Make Jet Fuel from Waste

Preet Palash

25 Apr 2024

Honeywell has announced its hydrocracking technology that can be used to produce sustainable aviation fuel (SAF) from biomass, helping to make sustainable aviation fuel (SAF) that is 90% less carbon intensive than traditional fossil-based jet fuels. The new technology produces 3-5% more SAF enables a cost reduction of up to 20% and reduces by-product waste streams as compared to other commonly used hydro processing technologies, the firm said in a statement.

Honeywell's Hydrocracking Breakthrough:

Honeywell’s Fischer-Tropsch (FT) UnicrackingTM technology takes liquids and waxes from processed biomass – including leftovers from crops, wood waste or food scraps – and can be used to produce SAF that complies with the strict standards of the aviation industry and with a lower environmental impact. This innovation demonstrates Honeywell’s alignment of its portfolio with three compelling megatrends, including the energy transition.

“As demand for SAF continues to grow, the aviation industry is challenged by limited supplies of traditional SAF feedstocks such as vegetable oils, animal fats and waste oils,” said Ken West, president and CEO of Honeywell Energy and Sustainability Solutions. “When combined with the existing Fischer-Tropsch process, our new technology will expand the feedstock options available in the industry to sources that are more plentiful, ultimately helping improve our customers’ ability to produce SAF.”

Partnering for Progress:

Recently, DG Fuels selected Honeywell’s FT Unicracking technology for its biofuels manufacturing facility in Louisiana – the largest in the world for making SAF from the FT process – that will produce 13,000 barrels of SAF each day when it begins operations in 2028.

“Using Honeywell's advanced technology, DG Fuels will supply enough fuel for more than 30,000 transatlantic flights every year, contributing significantly to reducing the carbon emissions of global air travel,” said Michael Darcy, CEO of DG Fuels. “This is a big leap forward in supporting the airline industry's goal of reaching net zero carbon emissions from international aviation by 2050.”

Honeywell helped pioneer SAF production with its EcofiningTM process, which has been used to produce the fuel commercially since 2016. The company now offers solutions across a range of feedstocks to meet the rapidly growing demand for renewable fuels, including SAF. In addition to Honeywell Unicracking and Ecofining, Honeywell's renewable fuels portfolio includes Ethanol to Jet technology and eFining, which converts green hydrogen and carbon dioxide into e-fuels. More than 50 sites globally have licensed Honeywell's SAF technologies, with refineries projected to exceed a combined capacity of more than 500,000 barrels of SAF per day when fully operational.