India Ratings & Research (Ind-Ra) believes the five major Indian privately operated airports will continue to limit traffic decline in adverse economic conditions in FY15 and 1HFY16. The yoy recovery in FY14 was sharper for three of these airports, largely aided by continued growth in total enplanements.  

All the five major private airports have registered yoy growth in domestic and international passenger segments in FY14 and the first few months of FY15 after a decline in domestic enplanements in FY13. The cascading effect of the increase in domestic and international enplanements has resulted in a yoy increase in non-aeronautical revenue across airports in FY14.  

The deteriorating profile of the Indian carriers though continues to be a cause of concern especially with the more recent news of increasing troubles for SpiceJet Limited. According to CAPA - Centre for Aviation, the cumulative estimated loss of Indian airlines in FY14 was 76% higher than that recorded in FY13 though cooling global oil prices could provide some respite.

Ind-Ra does not expect any rating pressure on the airports in its portfolio in the short to medium term due to the resilience of their cash flow to downside sensitivities. The dependence of a couple of airports on timely real estate monetisation is mitigated by their presence in high catchment areas. That said, ruling in the determination of tariffs, which are yet to be determined for FY15-FY19 period, will be closely monitored by Ind-Ra and could act as a negative trigger.