In a move that will make flying out of airports cheaper from Airports Authority of India (AAI) airports, the finance minister today announced changed in rules to allow monetisation of land assets owned by the state-owned airport operator.
AAI owns over 55, 686 acres of land in and around its airports across the country and is likely to start the process of monetising about 10% of the land owned (about 5,500 acres).
AAI welcomed the announcement. “This announcement in the Budget is a welcome news for us. Change in the act will allow us to lease out land for various other purposes like shopping malls and convention halls and help us increase our non-aeronautical revenues,” AAI Chairman G P Mohapatra told ET.
He further said that the increase in non-aeronautical revenues would help us reduce aeronautical charges on airlines, which will benefit them as well as passengers.
“We are already in discussions with the civil aviation ministry on changing the AAI Act and will start the process now,” he added.
Finance Minister Arun Jaitley announced in the Budget that “the AAI Act will be amended to allow monetisation of land assets owned by AAI.
The rules currently do not allow the land around airport to be used for limited purposes, which means a hotel can be made on the land but the same land cannot be rented for convention centres or shopping malls.
Another AAI official said that this move will help us utilise land in smaller cities in the country.
“Land around airports in smaller cities would not find takers, if we bid it for hotels. By allowing it for businesses like shopping malls and others, I am sure our land in smaller cities will find takers. This will help in increasing non-aero revenues,” the official said.
Non-aero revenues constitute as high as 40% of the total revenues for airports globally. In the case of AAI, its just 20% of the total revenues, which increases the airport operator’s dependence on aeronautical revenues to fulfil their needs. Nick Bellore JerseyShare This