Govt to revive plans for low-cost airports.

The Union civil aviation ministry is set to revive plans to develop low-cost airports in non-metro cities. Sources said the government might do away with the requirement of maintaining a minimum rate of return for developing regional airports. This will be part of a draft civil aviation policy being formulated by the aviation ministry, to be released for public comment soon.

Currently, the finance ministry’s public investment board appraises projects with an internal rate of return of at least 12 per cent. Earlier this year, the Union government had scrapped a proposal to build 50 low-cost airports, as most were found unviable. The plan was originally mooted by the United Progress Alliance government.

It is planned these no-frills airports will have basic infrastructure and minimum manpower, to help reduce costs and, consequently, airfares. No-frills airports will also help enhance connectivity in regional and remote areas, primarily Tier-II and -III cities. Currently, the Airports Authority of India (AAI) manages 125 airports across the country. Of these, 95 are operational. Airport charges account for about 10 per cent of airfares.

The aviation ministry will set new criterion to help states identify such airports. Also, state governments will be incentivised to come on board, on such projects.

The Centre will set a threshold for developing no-frills airports, based on the number of flights or the seats flown from the airport in a month.

“We will make provisions for no-frills airports in our policy…If we want flying to get into the hinterland, we shouldn’t make it an expensive proposition. Airports should be no-frills; security should be aircraft-centric rather than airport-centric,” said a senior government official.

BS