Indian Aviation Sector
In an attempt to ensure smooth air traffic and minimize congestion on the major airport across the country, the civil aviation ministry has firmed up Rs 10,000cr plan for low-cost "no frills" airports, for which a formal policy drafted by the Airports Authority of India (AAI) will be announced very shortly. For the next three years, around 100 airports are being identified for regions with potential for tourism or business where no air connectivity exists currently. In fact, the plan is a 100-day strategy of the ministry and the internal target is to start work on 100 low-frills airports over the next three years. These may not all be new, since work may have already started at few places where it will adopt the low-cost format. The aviation ministry is looking at basic services in areas with tourism potential or with some economic activity where a small beginning in terms of air services can be started forthwith.

Attracting airlines and passengers, these low-frills airports will have no landing/parking charges or passenger/user fees — the ministry is targeting just three-four flights a week initially and will keep costs low. The land for the airports will be provided by the state governments, while AAI will pay for the construction cost. States will be advised to procure additional land for the long-term, like in case a second runway needs to be built later when the airport expands operations. As per the policy, the ministry is targeting a cost of just Rs.90-110cr per airport, which is sharply lower than the approximately Rs.2,000cr recently invested by the AAI each in the Chennai and Kolkata airports just for their modernization program. The bulk of this, about Rs.70cr, will be for a green field runway that will initially be designed to handle small 20-seater planes or a bit larger 60 seats ATR aircraft and that about Rs.20cr more will be invested in a small terminal building with only a single floor, while some airports may see a further Rs. 20cr investment for city-side amenities like a food court — these could be sub-contracted to private players.