To meet costs, GMR eyes non-aeronautical revenue

Written by Corporate Bureau | New Delhi, Oct 29 | Updated: Oct 30 2007, 04:44am hrs
Delhi International Airport Limited (DIAL), the joint venture firm between the GMR-headed consortium and the Airports Authority of India (AAI) is hoping to cash in on the non-aeronautical revenues it can get from the Delhi airport modernisation.

We are looking for around 60% of our total revenues to come from the non-aeronautical sources of the airport while the remaining 40% will come from the aeronautical revenues, DIAL chief operating officer Andrew Harrison said. The non-aeronautical areas include retail, hotel development and hospitality and a maintenance repair and overhaul among other such proposals that are being considered right now, he added.

Traditionally non-aeronautical revenues have contributed 20% of the total revenues of an airport while aeronautical revenues consisting of aircraft landing and parking charges have contributed 80%, Harrison said. In India, the retail activity within the security area of the airport has been restricted but an amendment to the present policy is being looked at, he said. The best airports in the world, including JFK in US and Changi in Singapore, are looking at a 50:50 share between aeronautical and non-aeronautical revenues.

The lower aeronautical charges would then translate into lower ticket prices for the travelers, Harrison said. Meanwhile, the estimated cost for the modernisation of the new airport has almost doubled to Rs 8,900 crore from the initial expectation of Rs 3,300 crore when the GMR consortium first bid for the project. The estimated cost was then revised upwards to Rs 6,700 crore about a year back around the time GMR signed the operation, management and development agreement.