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  Business   In Other News  25 Apr 2018  AAI to raise Rs 1,500 crore from debt market

AAI to raise Rs 1,500 crore from debt market

FINANCIAL CHRONICLE
Published : Apr 25, 2018, 8:46 am IST
Updated : Apr 25, 2018, 8:46 am IST

Government has decided to expand airport capacity by more than five times to handle a billion trips a year.

AAI needs to accelerate capacity expansion of existing airports and also build new ones in smaller towns and cities.
 AAI needs to accelerate capacity expansion of existing airports and also build new ones in smaller towns and cities.

New Delhi: Prodded by the prime minister’s office (PMO), state-run Airports Authority of India (AAI) has decided to raise about Rs 1,500 crore from the debt market, leveraging its balancesheet in the current financial year. Major portion of this fund would go for upgrading Kolkata and Chennai airports, which are facing capacity crunch in the wake of rising traffic.

Official sources said that AAI held an internal meeting on capital expenditure last month where the proposal was discussed. “The plan is to raise about Rs 1,500 crore, but depending on requirement it could be raised further,” an official said.

 

As the government has decided to expand airport capacity by more than five times to handle a billion trips a year, AAI needs to accelerate capacity expansion of existing airports and also build new ones in smaller towns and cities.

“Due to lack of infrastructure, some of the RCS (regional connectivity scheme) flights have been affected. Also, there is capacity constraint at bigger airports. Therefore, there is need to build capacity at faster pace,” another official said.

Domestic air traffic has been growing exponentially in double digit for the last about 42 months, necessitating airport expansion. Severe capacity crunch at most of India’s major airports has already rung alarm bells among the airlines, threatening to delay their aircraft delivery schedule.

 

All the domestic airlines together are likely to induct more than 900 aircraft in the coming years, with largest domestic carrier IndiGo alone adding 448 planes.

Global aviation advisory Centre for Asia Pacific Aviation (CAPA) estimates that most of the 30 largest AAI airports would saturate within 10 years. Further, India could face a capacity crisis without construction of 50 new airports over the next decade. This puts burden on AAI, the largest airport operator, to augment capacity.

The government-controlled airport agency manages the country’s 125 airports. In order to handle additional capacity, it recently decided to keep four of its airports – at Guwahati, Patna, Raipur and

 

Ranchi -- open round-the-clock. It also encourages airlines to operate “red-eye” or late night flights to optimally use airport capacity.

Tags: airports authority of india, debt market, investment
Location: India, Delhi, New Delhi