Indian Airport Returns to Go Into New Fund

Airport Returns to Go Into New Fund 
Business Standard, India

December 8, 2003 

The civil aviation ministry is planning to set up a fund under the Airports 
Authority of India (AAI) to maintain the 114 airports that are currently making 
losses. 

Officials said earnings from the disinvestment of the Delhi and Mumbai 
airports, like the concession fee and share in revenue, would form the corpus 
of the fund. 

The proceeds from the divestment of other airports could also be directed to 
the fund. Later, the fund could be financed through an airport cess or a 
subsidy from the Centre. The officials said the Naresh Chandra Committee was 
also likely to make a similar recommendation. 

“It is through the profits of the Delhi and Mumbai airports that we manage to 
cross-subsidise the other loss-making airports, both the operational and 
non-operational ones. Therefore, a fund will be required to maintain these 
airports,” an official said. Of the 123 airports under the AAI, only nine 
make profits. 

Among the rest, all of which are in the red, 72 are operational and 42 are not. 
According to the revised estimate for 2002-03, the Delhi and Mumbai airports 
account for 59.9 per cent of the AAI’s revenue. The combined 
profit-before-tax of the two airports in 2002-03 is Rs 506.01 crore (revised 
estimate), while that of AAI is Rs 497 crore. 

In 2001-02, besides Mumbai and Delhi, only seven other airports — Kolkata, 
Chennai, Hyderabad, Goa, Bangalore, Juhu and Pune — posted profits. 

In 2001-02, the profit (before tax) of AAI was Rs 476 crore, while that of the 
nine profit-making airports was close to Rs 1,375.39 crore. Thus, the 114 other 
airports under the AAI posted a combined loss of Rs 900 crore. 

The ministry has already begun the process of disinvestment in the Delhi and 
Mumbai airports, and shortlisted nearly 20 airports for privatisation. Most of 
the remaining airports, sources said, were unlikely to find any takers and 
would have to be maintained by the AAI. 

 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dc/dcboard.php

*****************************************