Are merchant airports the future of aviation?

That Civil Aviation ministry should mull a purely private enterprise indicates policy shift

As airport infrastructure heaves under the pressure of an unprecedented 40 per cent growth in passenger traffic, the civil aviation ministry is seriously considering allowing of merchant airports.

Ideal for areas with high population density and relatively higher air traffic, merchant airports can help circumvent roadblocks which have hit airport modernisation plans like land acquisition issues and the relocation of project affected people.

The projected growth for the Indian aviation is pegged at 7.7 per cent over the next 20 years. And experts expect that about $80 billion alone will be invested to acquire aircraft in India in next 10 years. A further $30 billion would also be required to sustain this growth.

In a meeting held in Delhi recently, Civil Aviation secretary Ashok Chawla told members of industry chambers, airport operators and consultants that it would be difficult to generate such resources in the public sector or even through a public-private-partnership. Therefore, the need to explore the merchant airport option.

Merchant airports are operated entirely in the private sector, and are run with private resources and government funding is absent. Government intervention at such airports is limited to land acquisition approvals (a state list subject) and the necessary clearances required from the defence and environment departments at the Centre.

The policy had also come to the fore recently when Civil Aviation Minister Praful Patel talked about the need for a more liberal and licence-free civil aviation policy as a vision 2020 statement. It also proposes to allow 100 per cent FDI at such airports.

However, analysts believe that the concept might be more viable in smaller non-metro cities where the acquisition of larger swathes of land would be easier. Also, such airports might prove to be a boon for cargo operations, as they would create cargo hubs in centres of commercial activity.

Members of Mumbai International Airport Limited (MIAL), present at the meeting as airport operators, felt that there certainly was merit in the concept. “As long as there is a clear-cut policy and land acquisition issues are settled, there is definitely scope in this project. There are about 440 airstrips spread across the country. They are controlled by state governments and there is a potential to develop them into merchant airports,” said an MIAL spokesperson.