30 More Indian Airports Needed in Next 10 Years

Friday, 27th January 2012 at 03:44am

India's Planning Commission has announced the country will need 30 more airports in the next 10 years to accommodate the increase in air passenger traffic that's expected to grow to 370 million from 240 million this year.

The Planning Commission expects that with these estimated figures, the current passenger terminal capacity is expected to shrink within the next five to 10 years. The additional 30 functional airports to hold the projected increase in air passenger traffic stems from aggregate figures based on the investment plans of the country's five private-run airports at Delhi, Mumbai, Hyderabad, Bangalore and Cochin.

At present, these private airports manage 60 percent of air traffic in India, while the state-run Airports Authority of India (AAI), handles the remaining 40 percent.

Based on growth estimates the Planning Commission has received from the country's airline operators and the AAI a substantial investment of Rs 67,500 crore which is required spanning the period between 2012 to 2017 (12th Plan period), of which Rs 50,000 crore is anticipated to be sourced from the private sector.

With this major investment in mind, the Planning Commission has put forth its recommendations for state governments to lend their support in the development of 30 additional airports within the next decade. The plan body has deemed this invaluable assistance to be "vital" to boosting income from trade and tourism that's expected to benefit each state in the long term.

The Planning Commission has also created a working group in the form of a civil aviation sector panel, which is further pushing the need to develop a "no frills" airport model while remaining consistent with safety and security regulations for local and international air travel. As part of its recommendations to promote and expedite the building of additional airports in India, it is proposing that the government exempt airport developers from income and service tax.

"There is a need for the government and the industry to work together and bring down airfares in order to make air travel affordable for middle class population, without at the same time affecting the viability of the airline operations in the country," the body's working group panel stressed.

Consistent with its goal to lobby for government support towards airport development efforts, it further forwarded recommendations that included exemption of service tax on Airport Development Fees, 'Serve from India Scheme' benefits, and bestowing infrastructure status and IT exemption for brown-field airport expansion businesses. It also reiterated the need for "a stable, transparent and predictable regulatory regime with a mechanism for time-bound resolution of issues to create a sense of certainty in the sector".

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