Airports Authority of India to raise $300 mn to fund new infrastructure

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With an intent to step up investments in capacity expansion of airport infrastructure in the country, the Airports Authority of India(AAI) has decided to raise $300 million through External Commercial Borrowing (ECB) route next year as part of the proposed five-year outlay with Rs 25,000 crore starting this […]


With an intent to step up investments in capacity expansion of airport infrastructure in the country, the Airports Authority of India(AAI) has decided to raise $300 million through External Commercial Borrowing (ECB) route next year as part of the proposed five-year outlay with Rs 25,000 crore starting this year. The board has already approved the move, according to its chairman Arvind Singh.


The airport authority aims to spend a minimum of Rs 5,000 crore each year on the infrastructure in line with the government’s announcement that 100 new airports will be developed in five years in addition to the 48 airports newly operationalised in the past four years.



“Once these projects are completed the passenger capacity of the AAI-run airports will grow more than double to 700-750 million as compared to 350 million passenger capacity as we go for expansion, up-gradation and greenfield development,” Arvind Singh said on the sidelines of Wings India summit here on Friday.


The capex on airport infrastructure was supposed to be in the range of around Rs 4,000 crore last year as compared to around 2,500 crores in 2017-18 while the AAI’s current capex goal would further see a 20 percent increase in investment into this crucial sector.


“Just as the high passenger traffic growth has helped to fasten the growth of airports in the past, the pace of momentum in capacity addition is going to continue on the back of growing demand partly helped by the connectivity to Tier-II and Tier-III cities,” Sing said.


The Airports Authority was also working closely with the airlines and other service providers to develop high-density operations in every airport just as Mumbai Airport has started to handle 51-52 landings per hour for the efficient use of existing infrastructure, according to him.


As the airline industry, including the aircraft makers, project a quadruple jump in airline sector growth in India in the next 20 years, the government and the airports authority have been focusing on the development of airport infrastructure for the future demand to the extent that a second airport was planned in 8 cities, including Mumbai, New Delhi, Ahmedabad, Goa and Vizag, according to Singh.


Darren Hulst, Vice President, and Marketing Head, on Friday said that India will require 2,500 aircraft in the next 20 years as compared to around 600 aircraft currently in operations, more number of aircraft than their competitor has projected as part of its India Market forecast for the same period.


Responding to a question, chairman Arvind Sing ruled out privatisation of air navigation services, which are headed by the authority. “Air navigation will continue to be a sovereign function and it will remain that way in future,” he said. He also said that the ongoing facial recognition feature that’s been implemented across the airports where the passengers would be able to board the flight without a boarding pass will be completed by September-October this year.


Meanwhile, the airline industry representatives, including the aircraft makers such as Embraer, Boeing, and Airbus, have advised the Indian government and the authorities to focus on the development of international air travel as they believe the potential of that part of the airline sector is huge as well as underutilised.


“Why an Indian traveler on a visit to the US has to go to Doha to board a plane when India has a huge potential to develop similar international travel hubs in multiple places,” India president Anand Stanley questioned at a plenary held on capacity building in the Indian aviation sector. Others such as Embraer vice president Cesar Periera said India can develop regional connectivity using 100-150 seater capacity aircraft to connect the destinations outside the country.

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