We are advised not to kill the goose that lays the golden egg. But those managing the Kochi airport seem to be doing exactly that. Cochin International Airport, the public-private company that operates the airport, reported a profit of Rs 412.58 crore in 2023-24, a 54 percent growth over 2022-23. The 25-year-old airport has been consistently posting profit, primarily owing to its low initial investment and cost of operation, and a lack of competition. Besides, it started collecting user development fees (UDF) from flyers in 2022-23, which led to a huge profit jump. In 2023-24, it collected Rs 189.78 crore as UDF, roughly 46 percent of the year’s profit.
The UDF is a revenue-enhancing measure to bridge shortfalls and ensure fair returns for airports. While the collection of UDF itself is questionable, considering there was no revenue shortfall, the airport sought and secured clearance for it citing capital expenditure. Yet, no expansion seems to be happening and the change in infrastructure and facilities is cosmetic at best. According to some insiders, the company is catering to its billionaire clientele—some of them its shareholders and part of the board that takes decisions—with the money collected from common flyers and doling out a bulk of its profits as dividend to shareholders, sacrificing its growth potential. Last year, the company gave out a dividend of 35 percent and there is a proposal to increase it this year.
The airport's expansion plans are in limbo and there has been little movement on the proposal to build a second runway, which could lend the airport a sharper competitive edge. It is sitting on a huge growth potential, primarily because of its proximity to many international destinations and the serious drawbacks the other airports in Kerala suffer from. If developed adequately, the Kochi airport could transform itself into a major international transit hub and a bigger player in the cargo business. At a time when Indian aviation is anticipating a big growth, Kochi should be betting on its potential. The state government, its biggest stakeholder, should step in and take charge so that vested interests are kept away. The people who run the airport must realise that in a competitive world, progress is life and stagnation is death.