India has five major airports (Mumbai, Delhi, Kolkata, Chennai and Bangalore) and three airport models namely government-owned, private-owned and public private partnership (PPP). Delhi, Mumbai and Bangalore as well as most of the airports developed in the recent past were all based are on the PPP model.
However, with the PPP model, there could be a potential issue of the government holding all the reins. Industry authorities and the government could ease this anxiety by drawing up regulations.
"The potential in the Indian airport modernisation market is huge and to take advantage of this, airports are also developed on the built, operate and transfer (BOT) model," says Frost & Sullivan Research Analyst John Siddharth.
Apart from actively participating in airport development, the Indian government has also drawn up airport-wise infrastructure development budget for metro, non-metro and the green field airports. There are set funds for communications, navigation and surveillance systems for air traffic management (CNS/ATM) and the other equipment.
The revenue stream of the Indian airports is broadly divided into two categories - aeronautical and non-aeronautical. The aeronautical segment accounts for a huge chunk of the revenue (70 per cent), while non-aeronautical contributes the rest (30 per cent).
"The aeronautical revenues comprise the returns from cargo-related and the passenger-related traffic, while the non-aeronautical revenues are mainly obtained from property-related and retail-related income," notes Siddharth.
