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AAI plans land monetisation; to increase non-aeronautical revenues

Working on ways to increase its revenues, Airports Authority of India (AAI) plans to partially monetise around 55,000 hectares of land owned by it in urban areas.

By: | New Delhi | Published: September 20, 2016 9:48 PM
Land is proposed to be utilised for commercial activities, including for hospitality business and warehousing. (Source: Reuters) Land is proposed to be utilised for commercial activities, including for hospitality business and warehousing. (Source: Reuters)

Working on ways to increase its revenues, Airports Authority of India (AAI) plans to partially monetise around 55,000 hectares of land owned by it in urban areas.

The proposed move is part of AAI’s larger efforts to enhance non-aeronautical revenues, which currently account for around 19 per cent of its annual top line.

In his first media interaction after taking over as chairman of the national airports operator here today, Guruprasad Mohapatra outlined the future road map for AAI, which has envisaged a capital expenditure of Rs 17,500 crore over the five year period till March 2020.

“We have a huge chunk of land on the city side which we have not been able to monetise… That is where we are focusing now,” he said.

Land is proposed to be utilised for commercial activities, including for hospitality business and warehousing.

Towards land monetisation, Mohapatra said all options such as leasing and revenue-sharing models would be explored.

The priority is to increase non-aeronautical revenues which is also the mandate for AAI from the PMO and Niti Aayog, especially since “there is a limit to revenues from the aeronautical side”.

Bolstered by higher passenger traffic, AAI saw its profit after tax soar nearly 30 per cent to Rs 2,537.36 crore in the last fiscal.

According to Mohapatra, there is approximately 55,000 hectares of urban land with AAI and a part of it can be monetised. “We are working on it but there is no target,” he added.

Recently, AAI floated a proposal for city-side development of Bhubaneswar airport as part of land monetisation efforts.

“We will replicate such a model at other airports also. There is an opportune time for going for it,” Mohapatra said.

AAI manages 125 airports, including 11 international ones, besides providing Air Traffic Management Services (ATMS) over entire Indian air space and adjoining oceanic areas.

In 2015-16, AAI raked in profit after tax of Rs 2,537.36 crore on revenues of Rs 10,824.50 crore.

“Increase in passenger numbers, marginal increase of User Development Fee (UDF) charges in AAI airports, Passenger Service Fee (Facilitation Component) and increase in lease revenue from Delhi and Mumbai airports have contributed to the increase in AAI revenues,” the government told the Parliament last month.

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