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OVERVIEW

SIZE
 

  • India has 125 airports; of these 11 are designated international airports
     

  • In 2004-05, Indian airports handled 60 million passengers and 1.3 million tonnes of cargo
     

    • Passenger traffic grew at over 22% in 2004-05 over 2003-04; Cargo grew at 21.6% over the previous year
       

STRUCTURE

  • Currently all 125 airports are owned and operated by the Airports Authority of India (AAI)

      


Development of airport infrastructure is a
focus area for the Government


There has been a significant uptrend in domestic and international air travel
  

  • The Government aims to attract private investment in aviation infrastructure

    • Privatisation of the Delhi and Mumbai airports is in progress – bidders have submitted final bids. Expected investment of about $3.5 billion

    • New international airports at Bangalore and Hyderabad are being built by private consortia with a total investment of about $600 million

    • 25 other city airports are being considered for private investment
       

  • Air India and Indian Airlines are the Government owned international and domestic flag carriers respectively.
     

  • Indian private airlines – Jet, Sahara, Kingfisher, Deccan - account for around 60% of the domestic passenger traffic. Some have started international flights.

      

POLICY

  • 100% FDI is permissible for existing airports; FIPB approval required for FDI beyond 74%
     

  • 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
       

  • AAI Act amended to provide legal framework for airport privatisation
     

  • 100% tax exemption for airport projects for a period of 10 years
     

  • ‘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 2003-04
 

Airport Passenger traffic
(million, 2003-04)
Bangalore 3.2
Chennai 4.6
Delhi 10.3
Hyderabad 2.2
Kolkata 3.0
Mumbai 13.3

Source: Director General of Civil Aviation, AAI

 


OPPORTUNITY

OUTLOOK

  • Passenger traffic is projected to grow at a CAGR of over 15% in the next 5 years

    • To cross 100 million passengers p.a. by 2010
       

  • Cargo traffic to grow at over 20% p.a. over the next five years

    • To cross 3.3 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
       

  • Government is taking steps to increase participation by private industry
     

  • Major opportunities lie in:

    • Modernisation/upgradation of Metro airports – induction of partners for Chennai, Kolkata expected subsequently

    • Development of 30 non-metro airports - induction of partners for Chennai, Kolkata expected subsequently

    • Greenfield airport projects planned in resort destinations and emerging metros such as Goa, Pune, Navi Mumbai, Ludhiana, etc.
       

  • Estimated investment of over $15 billion for airport development over the next 5 years

For additional information: Ministry of Civil Aviation (http://civilaviation.nic.in), Airport Authority of India (http://www.airportsindia.org.in/aai/main.htm)
 

 Content Source: www.investmentcommission.in
 
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