After the announcement of major fleet expansion by domestic airlines at the Paris Air Show, India's airport developer
Airports Authority of India (AAI) is desperately seeking
more funds to keep pace with the robust growth that is expected to take place in the sector in the next five years.
AAI has sought additional funding to keep pace with the fleet and traffic expansion expected in India over the next few years. AAI, which invested around Rs 1,200 crore in modernisation projects last year, is working on 14 greenfield airports in India, which have been granted in-principle approval.
Airline companies from India have ordered one-third of the total airplane orders placed during the Paris Air Show last week, with IndiGo finalising orders for 180 jets and GoAir for 72 Airbus jets. Jet Airways has placed orders for 49 aircraft while low-cost carrier SpiceJet had signed a deal with Boeing to acquire 30 Boeing 737 at an estimated value of $2.7 billion.
SPREADING ITS WINGS
- Airport developer Airports Authority of India (AAI) is seeking more funds to keep pace with the speed of growth expected to unfold in the next five years
- The AAI expects air traffic from non-metro airports to rise to 45% of total air traffic in India in the next few years, up from 30% now
- It is working on 14 greenfield airports in India, which have been granted in-principle approval
- Airline companies from India have ordered onethird of the total airplane orders (worth $40 bn) placed during the Paris Air Show last week
- Aviation experts feel poor infrastructure, debt, high fuel taxes & frequently rising interest rates would mar the airline industry in India
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India's airlines have placed orders worth $40 billion, but aviation experts have pointed out that poor infrastructure, debt, high fuel taxes and rising interest rates would be disturbing for the airline industry in India. Last year, out of its total expenditure of Rs 2,700 crore, AAI spent Rs 1,200 crore on face-lifting of the non- metro airports. The AAI has already disclosed plans to borrow Rs 900 crore this year and Rs 800 crore next year to fund the upgradation of 10 non-metro airports out of the total 35 such airports.
The AAI had raised about Rs 550 crore last year via bank loans and guarantees but was not allowed to issue bonds by the finance ministry. It is also exploring funding from the World Bank.
"We do not have adequate infrastructure to support more than 400 aircraft in the coming years. Currently, airlines on metro routes do not get slots to land in time, which in turn pushes up its operating costs further," said an AAI official. "Ageing airports would be harmful for the aviation industry. It's not just about inducting new aircraft to meet the growing air traffic demand. It's about runway capacity and airport capacity, too," he added.
The AAI expects air traffic from nonmetro airports to increase to 45 per cent of the total air traffic in the country in the next few years, up from 30 per cent now. It also sees a huge demand-supply mismatch in view of the few operators on the nonmetro routes catering to a potential 30 crore passengers. AAI feels that the Centre should look at the huge middle class population who have the spending power and the willingness to travel by air.