AAI to spend ₹25,000cr on develop & upgrade of airports in next 5yrs

Indigo emergency landing Patna

New Delhi: The Airports Authority of India (AAI) has proposed to invest ₹25,000 crore to develop infrastructure and upgrade navigation facilities at new and existing airports in the next five years.

The AAI’s plan includes construction of new terminals, expansion and modification of existing terminals, expansion and/ or strengthening of existing runways, aprons, airport navigation services (ANS) infrastructure, control towers and technical blocks etc.

The authority has unveiled the next phase of development plan in keeping with increasing number of domestic passengers on almost all routes across the country. Indian airports carried around 83 million domestic passengers during 2021-22, registering a growth rate of 59% as compared to 2020-21.

As compared to the pre-pandemic domestic passenger traffic of around 136 million (2019-20), the traffic in 2021-22 has declined by 39%. Challenges that affect the profitability of the domestic aviation sector include high cost of aviation fuel, foreign exchange variations, constrained airport infrastructure and highly price-sensitive customers etc.

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Likewise, the Public Private Partnership (PPP) airports at Delhi, Hyderabad and Bengaluru have also undertaken major expansion projects of around ₹30,000 crores by 2025. Additionally, ₹36,000 crores have been planned for investment in the development of new Greenfield airports across the country under PPP mode.

In a bid to make air travel accessible to for more people, many State Governments have reduced Value Added Tax (VAT) on the aviation turbine fuel (ATF) on the call of the Central Government. As many as 16 States and Union Territories which lowered the VAT include Andaman and Nicobar Islands, Arunachal Pradesh, Dadra and Nagar Haveli and Daman and Diu, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Ladakh, Madhya Pradesh, Manipur, Mizoram, Tripura, Uttar Pradesh and Uttarakhand.

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The State Government announce the cut in VAT on ATF to encourage the airlines to lower the ticket cost. The Centre has also reduced the Goods and Services Tax (GST) domestic maintenance, repair and overhaul (MRO) services from 18% to 5% for.

Officials of the AAI said that the Ministry of Civil Aviation (MoCA) took a lot of steps to make conducive aircraft leasing and financing environment to promote air travel. Many airports have been built or are in the process of construction under UDAN scheme.

“Improvement in air navigation infrastructure is being carried out to enable better utilization of airspace and airport capacity. The MoCA has accorded ‘in-principle’ approval for setting up of 21 Greenfield airports across the country. So far, eight Greenfield airports namely, Sindhudurg and Shirdi in Maharashtra, Durgapur in West Bengal, Pakyong in Sikkim, Kannur in Kerala, Orvakal in Andhra Pradesh, Kalaburagi in Karnataka and Kushinagar in Uttar Pradesh have been operationalized,” said an AAI officer.

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