CIAL profit stirs expansion in 3 airports

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Thiruvananthapuram: If the usually strike-heeled Kerala was caught on the back foot in the airport privatisation strike, put the blame squarely on the CIAL-model (Cochin International Airport Limited). For a state with three international airports and a fourth one in the pipelines, it was somewhat too late in the day for Kerala to get worked up on private players coming into Delhi and Mumbai airports.

Nedumbassery airport (CIAL) is not just India’s only public-private partnership greenfield airport. In its sixth year, it delivers one of the world’s best airport profitability ratios, second only to Auckland airport. A recent study by Ernst & Young had found that even airports like Zurich, Singapore, Dubai or Copenhagen lag behind CIAL in the ratio between operational revenue and operational expenditure.

Last month, the CIAL Board also approved another Rs 3,500-crore expansion plan for the new airport, including a hotel, mall and golf course and an airline. “Whether it is private money or AAI money, eyes on capital efficiency always pay,” says VJ Kurien, CIAL managing director. “This would depend essentially on political leadership choosing the right guys to run the right projects,” is the Kurien-gospel for AAI airport modernisation.

NRIs, who send home one-fifth of the value of Kerala’s State Domestic Product, also account for the state’s three airports together clocking India’s highest air traffic. CIAL’s passengers grew from 4 lakh in 1999 to 16 lakh in 2006. Diaspora, spanning 30 countries, also holds 36% of CIAL’s stakes.

Kochi airport’s long strides also had the effect of stirring up robust envy pangs across the trade-chain of Thiruvananthapuram airport. This one is an old AAI outfit, which Winnie Mandela had found “the smallest international airport (she had) ever seen.” “Thiruvanathapuram is the only Indian airport within city-limits and within 30 minutes flying distance of two countries. But its expansion lacks pace,” says KV Muralidharan, president, Kerala Association of Travel Agents.

Not for too long. Land acquisition over for the Rs 246-crore terminal expansion, Kerala capital is in Phase I of AAI’s non-metro airport expansions and Prime Minister Manmohan Singh is set to flag it off next week. What is more, Air India’s Rs 50-crore aircraft international maintenance hub too is coming up in its neighbourhood.

The CIAL-effect has Kozhikode airport too earning its long-pending international airport tag. The status sets its Rs 150-crore expansion scheme on fast track.