Airports Authority of India plans to monetise 12-15% of its landholding

To increase the non-aeronautical revenues of the Airports Authority of India (AAI), finance minister Arun Jaitley said in his Budget proposals that the government plans to amend the AAI Act to allow the former to monetise its surplus land for commercial purposes. Currently, the Act limits AAI to use its land for only airport related purposes.

AAI owns close to 55,000 acres of land across the country and is ranked as the third highest in terms of the land it owns probably after railways and defence. According to a senior official of AAI, the plan is to monetise around 12-15% of the total land it holds. The money collected will be used in developing new or upgrading the existing airports in non-metro cities.

In December last year, Guruprasad Mahapatra, chairman, AAI, had told FE that it was looking to monetise assets like land to offset any decline in revenues if tariff in DIAL and MIAL come down in future.

“AAI can monetise 2,000-3,000 acres of land in the future which should contribute to improvement of infrastructure in the future,” civil aviation minister Ashok Gajapathi Raju said.

As of now, AAI gets 31% of its revenues from DIAL and MIAL, but after the tariff revision revenues from the two airports may come down. In 2016 AAI created a separate subsidiary to handle the cargo operations and the management expects to double the revenues in the next three yeas.

According to senior officials AAI has already identified land in certain states for monetisation and will quickly move once the AAI Act gets amended.