AAI plans to develop infrastructure at regional airports

New Delhi: With the public-private partnership (PPP) strategy over developing Kolkata, Chennai and Jaipur airports in limbo, Airports Authority of India (AAI) is looking towards regional airports to shore up its non-aeronautical revenue.

The plan is to develop city-side infrastructure in regional airports, with help from private players that will include building of hotels, carparks and other facilities.

RITES - the engineering company under the ministry of railways - will advise it on city-side development of 13 regional airports across the country.

"Thirteen regional airports, holding out promise of generating high revenue, have been identified and work has already started on developing city-side infrastructure," said an official from AAI.

The civil aviation ministry has, however, clarified that maintenance of the terminal building will not be included in the city-side development, ruling out any intent of privatising the airports. The process of identifying the land has already been done at Lucknow and Raipur airports, added the official.

The development is significant because it comes after the government had scrapped plans to privatise the airports at Chennai, Kolkata, Jaipur and Ahmedabad. These were to be built via PPP, which envisaged handing over the operations, management and development of these airports to successful private bidders.

This, according to the official, will bring windfall to the non-aeronautical revenue earned by AAI. Non-aeronautical revenue for the year stood at Rs 981 crore, declining from Rs 1,241 crore in 2013-14.

AAI is eyeing more non-aeronautical revenue from the two privately-run airports of Mumbai and Delhi. The 700,000 square feet area at Terminal 2 at the Mumbai airport witnessed a 40 per cent jump in growth of food business in the last financial year, whereas Terminal 3 at Delhi airport witnessed almost a 45 per cent jump in revenue from the duty-free shops.

There are over 500 brands in the Delhi airport space and the Amit Burman-led Lite-Bite is trying to attract major foreign brands to take up space at the airport under the agreement. DIAL has to share 45.99 per cent of its revenue with AAI every year, while the GVK Group's Mumbai International Airport Ltd (MIAL) shares 38.7 per cent.

Juhu airport redevelopment

AAI has set up an advisory committee for extension of the Juhu airport runway into the sea so that it can handle A320 and ATR turbo planes. RITES is advising AAI on it. Juhu airport is one of the first civil airports in the country.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.