05 April 2020
New Delhi: The COVID-19 unleashed headwinds which have deeply impacted the airline and hospitality sector, now pose a major risk to the job security of over 2,00,000 workforce employed with the country's private airport operators.
Accordingly, the Association of Private Airport Operators (APAO) has urged the Centre to come out with an economic relief package not only to stop downsizing but also to maintain the key infrastructure assets that the sector maintains.
At present, approximately 2,40,000 people employed on airport sites, including airport operators' employees jobs are at stake.
The downsizing impact will be felt across the country as New Delhi, Mumbai, Bangalore and Hyderabad are some of the major airports which are handled by private entities.
Currently, no foreign or domestic passenger flight operations are allowed till the deadline of April 14. Only cargo operations are taking place there by hitting the bottom lines of these companies.
Not only is the income low but these entities are also in stress for paying up a huge chunk of the revenue to the government under the various management deals of respective airports.
"We have approached the government requesting to immediately provide certain relief measures for the private airport operators, which will directly alleviate the financial burden for airports due to the COVID-19 outbreak," Satyan Nayar, Secretary General, Association of Private Airport Operators told IANS.
"In the absence of any relief measures it is just a matter of days and not months that the operators might go in for a massive downturn to contain costs. This sector won't be able to sustain the manpower, it does right now."
According to Nayar, the industry has sought deferment of taxes and other statutory dues, and one time waiver of revenue share being paid to state run pa rtner entities (AAI).
"Plus as an infrastructure provider we need urgent lending lifelines to maintain and keep ready these critical facilities," he said.
"India's air traffic in 2020 might plunge heavily. This will cause defaults on our side as well as airlines and other related sectors such as hospitality and tourism. It is vital that the government quickly moves to institute relief measures."
Recently, Moody's Investors Service has downgraded the rating of Delhi International Airport Limited, the firm which manages the IGI Airport's (DIAL) to Ba3 from Ba2.
"The downgrade to Ba3 reflects our expectation of a sharp decline in passenger and aircraft traffic at Delhi Airport in the coming months and the uncertainty over the timing and extent of a recovery, which coincides with increased debt issuance as the airport enters the peak stage of its Rs 98 billion expansion project," Spencer Ng, a Moody's Vice President and Senior Analyst said in a report.
Furthemore, Moody's Investors Service has placed GMR Hyderabad International Airport Limited's (HIAL) Ba1 corporate family rating (CFR) on review for po ssible downgrade.
Similarly, Fitch Ratings revised the outlook on DIAL's Long-Term Issuer Default Rating (IDR) and bond issue ratings to "Negative from Stable, and affirm ed the ratings at 'BB+'".
Fitch Ratings also affirmed GMR Hyderabad International Airport Limited's "Long-Term Issuer Default Rating (IDR) and its bond issue ratings at 'BB+' with a Negative Outlook".
On its part, Angela Gittens, Director General of Airports Council International (ACI) in a letter dated March 31st to Prime Minister Narendra Modi said that revenue forecasts show the 2020 impact of the pandemic now stands at $23.9 billion for Asia-Pacific only, impacting airports of all sizes.
"Analysis of preliminary weekly passenger data from January to the middle of March at 12 major hubs in Asia-Pacific handling around 22 per cent of traffic in the region, including Indira Gandhi International Airport, shows the increasing traffic deterioration, culminating in an average decrease in traffic by more than 80 per cent by the second week of March compared to the same period in 2019," Gittens said.
"Airports are the engine of your national economy in terms of jobs created and GDP growth... Every passenger lost by an airline is equally a passenger lost by an airport. We would urge your Authority to provide relief measures for the aviation sector to benefit all affected parties of the aviation sector and which will be strategic for the relaunch of the economy as soon as the crisis is over."