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OVERVIEW | OPPORTUNITIES
Civil
Aviation &
Airports
OVERVIEW
SIZE
- India has 454 airports and airstrips; of these, 16 are designated international airports
- In 2006-07, Indian airports handled an estimated 95 million passengers and 1.5 million tonnes of cargo
- Passenger traffic grew in excess of 30% in 2006-07 over 2005-06; cargo grew at 11% over the previous year
STRUCTURE
- Currently 97 airports are owned and operated by the Airports Authority of India (AAI)
- The government aims to attract private investment in aviation infrastructure
- Mumbai and Delhi airports have been privatised and are being upgraded at an estimated investment of US$4 billion over 2006-16
- Greenfield airports at Bengaluru and Hyderabad are being built by private consortia at a total investment of over US$800 million
- Second greenfield airport being planned at Navi Mumbai to be developed using PPP mode at an estimated cost of US$2.5 billion
- 35 other city airports proposed to be upgraded - cityside development to be undertaken through PPP mode where an investment of US$357 million is being considered over the next 3 years
- Private airlines accounted for 80% of the domestic passenger traffic in 2006-07. Some have started international flights.
POLICY
- 100% FDI is permissible for airports
- FIPB approval required for FDI beyond 74%
- 100% FDI under automatic route is permissible for greenfield airports
- Private developers allowed to setup captive airstrips and general airports 150 km away from an existing airport.
- 100% tax exemption for airport projects for a period of 10 years
- 49% FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies
- 100% equity ownership by Non-Resident Indians (NRIs) is permitted
- 74% FDI permissible in cargo and non-scheduled airlines
- The Indian government plans to set up an Airport Economic Regulatory Authority to provide a level playing field to all players
- The “Open Sky” policy of the government and rapid air traffic growth have resulted in the entry of several new privately owned airlines and increased frequency/flights for international airlines
Airport Statistics 2006-07
| Airport |
Passenger
traffic
(million, 2005-06) |
| Bengaluru |
8.1 |
| Chennai |
8.4 |
| Delhi |
20.4 |
| Hyderabad |
5.7 |
| Kolkata |
5.9 |
| Mumbai |
22.2 |
Source: Director General of Civil Aviation,
AAI
OPPORTUNITY
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Development of airport infrastructure
is a
focus area for the Government
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There has been a significant uptrend
in
domestic and international air travel |
OUTLOOK
- Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years
- Expected to cross 145 million passengers p.a. by 2010
- Vision 2020 envisages creating infrastructure to handle 280 million passengers by 2020
- Investment opportunities of US$110 billion envisaged upto 2020 with US$80 billion in new aircraft and US$30 billion in development of airport infrastructure
- Associated areas like MRO and training offer high investment potential
- Air cargo traffic to grow at over 11.4% p.a. over the next 5 years
- To exceed 2.8 million tonnes by 2010
- Major investments planned in new airports and upgradation of existing airports
POTENTIAL
- Favourable demographics and rapid economic growth point to a continued boom in domestic passenger traffic and international outbound traffic
- International inbound traffic will also grow rapidly with increasing investment and trade activity and as India's rich heritage and natural beauty are marketed to international leisure travellers
- Consequent high demand for investments in aviation infrastructure
- Major opportunities lie in
- Greenfield airport projects in resort destinations and emerging metros such as Kannur, Goa, Pune, Navi Mumbai, Ludhiana, etc.
- Cityside development opportunities for upgradation of 35 non-metro airports
- About 25 regional greenfield/unutilised airports likely to be bid out for private development
For additional information:
Ministry of Civil Aviation (http://civilaviation.nic.in),
Airport Authority of India (http://www.airportsindia.org.in/aai/main.htm)
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