Three-fourths of airports of the country are in loss! Setback to PM Modi’s attempt to boost regional air connectivity

By: |
Published: January 3, 2019 9:10:51 PM

Prime Minister Narendra Modi’s ambitious plan to boost regional air connectivity seems to have run into trouble.

At present, there are 129 operational airports in the country.

Prime Minister Narendra Modi’s ambitious plan to boost regional air connectivity seems to have run into trouble. Under the regional connectivity scheme (RCS), the government is pushing the development of airports across the country, especially in unserved and underserved areas, but nearly three-fourths of the airports managed by Airports Authority of India are incurring losses.

“The cost of infrastructure and operational cost of managing an airport is extremely high. An airport in a small city needs the same equipment as are required for large airports like Mumbai. It requires the same kind of air-conditioning and amenities,” a former board member of Airport Authority of India told Financial Express Online requesting not to be named.

Read | Good news for businesses! Deadline for claiming GST input tax credit extended; all you need to know

At present, there are 129 operational airports in the country. However most of them, nearly three-fourths, are incurring losses, raising questions about the viability of their business model.

“Airports Authority of India (AAI) owns and manages 129 airports out of which 94 were running into loss in the financial year 2017-18,” civil aviation minister Suresh Prabhu informed the Lok Sabha today in response to a question.

In October 2016, the government announced a special scheme called UDAN to boost air connectivity in the unserved and underserved areas of the country. Under the first and second round of regional connectivity scheme, 73 airports located in unserved and underserved areas have already been awarded to scheduled airlines.

Also read | NPS: A retirement fund you must consider this tax season

“Under the UDAN scheme, a cap has been fixed for air tickets and airports charges for these airlines have been kept low to make the scheme viable. However, this scheme may pick up in next three to four years and airports will also start generating revenue alongside the airlines,” said the former board member of Airport Authority of India.

Civil aviation minister Suresh Prabhu said the losses were mainly due to low revenue generation to meet the total expenditure of the respective airports.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Delhi IGI airport opens for domestic flights! Flyers note these 10 points before departure and arrival
2Jewar International Airport: Switzerland’s Zurich Airport International gets security nod for new airport
3More world-class airports in India soon! FM Sitharaman announces 6 more airports for PPP bidding