CIAL, Cochin International Airport Limited, is India's first airport developed under a Public-Private Partnership (PPP). Established in March 1994, CIAL began commercial operations in June 1999. In March 2017, it unveiled a new international terminal. As of September 2023, the Kerala government holds a 33.4% stake. CIAL is recognized as the world's first fully solar-powered airport.
**Why Cochin International?**
CIAL has a long operational track record, starting commercial operations in June 1999. Acknowledging ongoing financial requirements and capex programs, the User Development Fee (UDF) was further escalated by 25-28% for FY24 vs FY23, raising the UDF for domestic passengers to Rs. 230 and for international passengers to Rs. 500. The airport operates under a PPP model with 32% stakes held by the Kerala government and investors like Yusuffali M.A. from Lulu Group. CIAL is also the world's first 100% solar-powered airport. It has diversified revenue streams beyond aeronautical income to include non-aeronautical revenues like retail, duty-free shops, and hospitality.
**Capex Plan by Cochin International**
CIAL aims for expansion, including the T3 terminal, cargo complex, airport hotels, and IT revamps, with an estimated spend of Rs. 1,500-1,600 crore from FY2024-FY2026. The expansion will be funded through Rs. 478.2 crore, raised via right issue in equity, internal accruals, and debt. Despite debt financing, strong operations and profitability are projected to ensure robust debt coverage. CIAL is yet to secure the required debt but is positioned well to arrange the necessary funds. Key focus is on completing the Capex projects within budget and on time to maintain credit ratings. AERA's tariff order includes a Capex of Rs. 1,754 crore, and exceeding this without tariff adjustment could impact CIAL's credit stance.
**Management & Leadership**
Key figures in CIAL's management include Shri. Pinarayi Vijayan (Chairman), Dr. P. Mohamad Ali (Director), and Shri. M.A. Yusuff Ali (Non-Retiring Director).
**Industry Analysis of Aviation**
The Airport Authority of India manages both international and domestic airports. The Indian aviation market size was $13 billion in FY23 and is projected to reach $23 billion in FY29, representing a CAGR of 11.41%. Adani Airport Holdings Limited, a subsidiary of Adani Enterprises Ltd, manages eight airports and accounts for 25% of passenger footfalls and 33% of India's air cargo traffic.
**Growth Drivers in the Industry**
Key drivers of growth in the aviation industry include rapid growth, projected growth to 1.1 billion passengers by 2041, the Draft Aircraft Bill 2023 aimed at simplifying regulations, ecosystem development, and the rise of middle-income families and low-cost carriers.
**Subsidiaries of CIAL**
CIAL has several subsidiaries, including Cochin International Aviation Services Limited (CIASL) focusing on MRO and aviation training, Air Kerala International Services Limited (AKISL) with the goal of starting a low-cost airline, CIAL Infrastructures Limited (CIL) focusing on power and infrastructure with a 40 MWp solar plant, and CIAL Duty-Free and Retail Services Limited (CDRSL) focusing on expanding duty-free operations.
**Revenue, Growth & Financials**
Revenue streams include landing fees (14%), user development fees (11%), royalty (8%), income from CUTE (4%), inline X-ray screening charges (4%), income from cargo operations (3%), and extra (5%). In the last 5 years, both passenger movement and aircraft movement have increased. Revenue has increased from 807 in 2018-19 to 955 in 2022-23, while EBITDA has increased from 375 to 563 and PAT from 188 to 292.
**Key Risk in the Business**
CIAL faces competition from other international airports within a 300-kilometer radius. The absence of a concession agreement introduces uncertainty regarding rights, obligations, and the concession period.
**Peers of Cochin International**
Notable peers of Cochin International Airport Limited in the Indian industry include the GMR Group, Bengaluru International Airport, and Adani Airports. CIAL serves approximately 1 crore passengers annually and is currently valued at around INR 10,000 crores in the unlisted market.
