Airports Authority Considers Bonds To Fund Expansion
AAI looks for funds to expand as passenger traffic grows.
The Airports Authority of India may look at issuing bonds to raise funds to develop existing and non-operational airports as the government looks to boost air connectivity in the world’s third largest aviation market.
The state-run airport operator has lined up capex plans worth Rs 17,500 crore over the next five years and will need to raise funds from the market if not allotted any budgetary support, Chairman Guruprasad Mohapatra said today. Funds will also be used to upgrade navigation and telecommunications infrastructure.
Mohapatra said the airports operator, like the National Highways Authority of India, has a good credit rating and raising funds by floating bonds is a viable option.
India surpassed Japan with 100 million domestic passengers to become No. 3 aviation market in the year to March, behind the U.S. and China, according to a March report by the CAPA Centre of Aviation said. Passenger traffic in Asia’s third-largest economy will only grow on rising incomes and the government’s UDAN plan to connect smaller cities to the aviation grid. That will require more and better airports, especially in locations where private companies may not be willing to invest. Bidding for routes under the second phase of UDAN is underway.
The airport operator is exploring ways to ease the added load of regional flights on crowded airports like Delhi, Mohapatra said. For Delhi, the Air Force has shown an inclination to allow regional flights to operate from its Hindon airbase.
Mohapatra said the operator was considering land pooling instead of acquisition to expand existing airports. “People pooling 40 percent of their land (for airports) would get more value for the remaining 60 percent once the airport is operational.”