Airports Company of SA’s (Acsa’s) 10% stake in India’s busiest airport, Mumbai International Airport, continued to provide a healthy return in the year to March despite a sharp slowdown in the country’s air travel market.

In its latest annual report Acsa values its stake in the airport at R459m, a sharp increase on its R30m initial investment.

Haroon Jeena, Acsa’s group commercial executive, said yesterday while the stake was valued at R500m last year, the drop in value was largely due to a change in the way Acsa accounted for the investment, which was now regarded as an associate.

In 2006, a consortium led by Acsa, with a 10% stake, was awarded a 30-year contract by the Indian government to manage and operate the airport. The consortium included Bidvest with a 27% interest and Indian company GVK with 37%. A 26% stake was retained by the Airports Authority of India.

As part of the contract the consortium was tasked with upgrading the airport to meet a projected capacity of 40-million passengers. The airport manages about 23-million passengers. The consortium has committed to spending $2,23bn over seven years to upgrade the airport, of which $646,3m has been spent in the first three years. A further $1,59bn is to be spent over the next four years. Upgrades include increasing parking from 3600 bays to 12000, a terminal and apron extension, an international cargo terminal as well as runway and taxiway improvements.

“The airport looks very much the way OR Tambo International looked three years ago, with a lot of construction going on. But already it is looking vastly improved from when we took over the airport and will be a magnificent facility when complete.”

In the year to March a 9,4% drop in passengers took its toll on the airport’s profitability, with a 28% decline in Acsa’s share of the profit at R16m. Jeena said while international passenger numbers remained in the doldrums, domestic traffic was beginning to recover, which should boost profitability in the year ahead.

He said future growth at Mumbai was limited by the lack of land and therefore capacity could not be increased much beyond 40 million passengers. The Indian authorities were exploring a new greenfields airport to supplement the existing airport.