50 no-frills airports in small cities may not see light of the day

The plan of building 50 new airports in different cities may take a backseat as the Civil Aviation Ministry has decided they will be built if they earn return on investment (RoI) of 12%.

The previous Congress party-led Government had earmarked small cities for 50 low cost or no-frills airports.

However, the finance department of the ministry said that the plan will be viable if it gets 12% RoI.

"This will be difficult to achieve for all no-frills airport we have planned. We have told them we cannot build all 50 airports planned with 12% RoI aim - maybe 60% of them can be build, but we need to build the rest 40% too," a top official in the ministry told Economic Times on the condition of anonymity.

Industry experts welcomed the move, saying that many airports are operating without any reason.

“Since no airline can be forced to fly to such locations, these airports become an unnecessary white elephant on the books of AAI (Airports Authority of India) or the state government," Amber Dubey, partner & India head (aerospace and defence), KPMG, told the financial daily.

He added that if there was any shortfall in revenues of airport built on the basis of a strategic or social rationale for connectivity, it has be covered under the viability gap funding (VGF) scheme.

Meanwhile, the present Narendra Modi-led Government has begun working on five airports in Hubbali, Belagavi, Kishangarh, Jharsuguda and Tezu.

(Image: Indiatimes)