Chennai and Pune will be India’s next two cities to have second airports after Mumbai and New Delhi. The new proposed airport at Chennai will be developed by a private partner and not by the state-owned Airports Authority of India (AAI), as expected earlier, said civil aviation minister Praful Patel.
The government plans to complete bids for a second airport in Mumbai by June 2008, Patel added. The Navi Mumbai airport, construction for which is expected to start that same month, will be built by public and private investors at a cost of $2.5 billion (Rs10,250 crore).
The government of Tamil Nadu had said in May that the proposed new airport would be developed by AAI for which the state would provide land and the current airport would too be modernized by the government’s airports agency.
“We are looking at more than one airport in metropolitan regions,” Patel told a conference of aviation investors. Metropolitan regions include the extended suburbs of the country’s four major cities New Delhi, Mumbai, Chennai and Kolkata. “There is no question of not looking at it favourably,” he said referring to an international airport near Greater Noida proposed by the Uttar Pradesh administration.
Patel did not specify what model—private or public—the new Pune airport would take. The current airport at Pune is owned by the defence forces and AAI runs a civil enclave on the premises.
Most civilian airports in India are owned by AAI. Kochi, formerly Cochin, has the country’s first privately-run airport while Delhi and Mumbai airports have been leased to private consortia led by the Hyderabad-based GMR and GVK business groups, respectively, for a 30-year period. New airports at Bangalore and Hyderabad, also being built by private consortia, are expected to be ready early next year.
The aviation ministry says India needs some $30 billion until 2020 in airport investments for the infrastructure on the ground to be able to keep pace with the airlines boom. The number of planes—passenger, private and cargo—in Indian skies is expected to jump to 1,500 in 10 years from the nearly 300 today.
Patel said the aviation ministry is in the process of finalizing a new policy for airlines operating regionally within the country. The ministry has been selective in issuing licences to about 14 airlines that have been awaiting approval given the inadequate infrastructure at airports but with the consolidation among national scheduled carriers, the ministry will work towards facilitating regional players, he said.
Analysts have for long recommended that incentives for regional carriers be expanded to help airlines fly to smaller cities and towns. “We must have a redistribution of traffic. It cannot be that more than half of the country’s air traffic is based out from Mumbai and Delhi,” the minister said. Currently, regional airlines that use short-haul planes benefit from being exempt from aeronautical charges at airports and pay reduced rates of tax on aviation fuel.
In the new policy, existing scheduled airlines at the national level will not be allowed to have a regional operators licence as well. There are about nine scheduled carriers in the country of which only Paramount Airways Ltd has restricted its operations to the southern region.
(Anoop Agrawal of Bloomberg contributed to this story.)