With smaller cities set to lead the air traffic growth in the country, the government is planning to build nearly 200 low-cost airports in the next 20 years to meet the demand for air travel. This additional aviation infrastructure is likely to be developed on the private-public partnership (PPP) model, throwing business opportunities for developers like GMR, GVK, L&T and Reliance-ADAG.
?The first phase of growth in the aviation sector has been led by low-cost airlines. The next phase would be driven by low-cost airports. The country should have 300 operational airports by the end of 2030,? a senior aviation ministry official told FE.
Each low-cost airport, which would have only basic facilities like runway, terminal building and air navigation infrastructure is expected to cost R80-125 crore.
As per an estimate bigger airports worldwide handle 60% of the total air traffic and the remaining is managed by low-cost smaller airports.
Consultancy firm KPMG director (aviation) Amber Dubey, who is also a member invitee on innovation council in the civil aviation sector, has proposed to create a dedicated aviation infrastructure fund for facilitating the development of smaller airports.
?There?s a need to set up an aviation infrastructure development fund by levying just R10 per domestic passenger and $1 on international passengers. This would create a kitty of upwards of R200 crore per annum, which can be a vehicle to provide seed capital of up to 20% in tier 2/3 airports. This can be topped up by state level grants, lenders and the investors own funds to make the airport viable,? Dubey said, adding that future growth would be driven by no-frills airports.
Debashish Mukherjee, partner and vice-president AT Kearney, however cautions saying airports already exist and are serviced where people need them. ?The government should certainly put up additional infrastructure but should see its viability too,? he said.
Most of the airports in tier-II and III towns would be built by developing existing airstrips, which are not in operation. Presently, there are 350 unused airstrips in the country. The government is keen to develop these airstrips since they already exist and the rule which bars building airports within 150 km of an existing airport does not come up in the way.
As per the government’s policy on greenfield airports announced in 2008, any airport proposed within 150 km of existing facility would be examined on case-to-case basis by a steering committee. Several proposals such as constructing an international airport at Greater Noida in the National Capital Region (NCR) and in Jhajjar have stuck due to these proposed facilities being within an aerial distance of 150 km from the Capital’s IGI airport managed by private developer Delhi International Airport (DIAL).
?We have proposed to not apply this rule in developing unused airstrips,? a member on panel for suggesting measures to improve air-connectivity said.
The government has in the last few years accorded in-principle approval to build 14 greenfield airports in the country. New airports have been proposed in cities like Dabra (Madhya Pradesh), Saras (Rajasthan), Durgapur (West Bengal) Paladi Ram Singhpur (Rajasthan), Karaikal (Puducherry) and Kushinagar in UP.
?We have seen huge growth coming from Tier-II towns in the last 2-3 years. In order to meet this demand we have added flights and frequency on these routes,? an executive of a low-cost airline said.
