Sources in CIAAL said the national carrier had picked up the stake, following a court order striking down a suit filed by the Mumbai-based Combata Airlines challenging the decision of the airport authority to award the ground-handling facilities to Air India. The Kerala high court had earlier this week dismissed the petition filed by the Mumbai-based airliner.

Besides, its equity participation Air India will also pump in another Rs 25 crore to set up the ground-handling facility. Under the deal, Air India has to part with 15 per cent of its gross annual revenue from ground handling to the airport with an annual increment of 0.5 per cent for the first 10 years.

The Rs 230-crore project, perhaps for thefirst of its kind in the country, is promoted by Cochin International Airport Society. The society was promoted by the Kerala Government and its various departments. Different chambers of commerce and industry in the state are also co-promoting the venture.

The project, which is structured on a debt-equity ratio of 1:1.5 is slated to go on stream by mid-April. While, the state government has picked up a major chunk of the equity, other promoters include oil majors Indian Oil Corporation and BPCL, Federal Bank, Hudco and CWC. The company has also raised Rs 30 crore through private placement of shares from NRIs.

The debt component of the project had been financed mainly by Hudco and the Federal Bank, sources said.

According to the original project report, the major stream of revenue will flow from landing charges from various airlines, entry tax by passengers and from cargo handling. The report also projected additional revenue from public amenities like duty-paid shops, airport hotels and otherestablishments. The project report has estimated an internal rate of return of 22-37 per cent.

Sources also said the airport management was in talks with foreign airliners to begin services to the airport. "Some of them have agreed in-principle to start operations from here," sources added.

Air India has already announced its plan to shift its operations completely to the new airport once it begins operations. According to a study conducted by the Kerala Infrastructure Development Corporation, 70 per cent of the foreign traffic now coming to Thiruvananthapuram will shift to Kochi once the airport goes in stream.