Airlines may be allowed to own terminals

The government is considering a proposal to allow domestic airlines to own or lease terminals at various airports in the country. The airlines will also be allowed to operate services in these terminals in line with international practices.

This follows the government's decision to allow domestic schedule operators to hold up to 10 per cent stake in consortiums bidding for the privatisation and modernisation of the Delhi and Mumbai airports.

Currently, airport terminals are owned and operated by Airports Authority of India (AAI). Indian carriers have shown interest in such a model for some time now. For example, Air India wants to own at least one terminals each in Delhi and Mumbai airports.

According to senior civil aviation ministry officials, this is likely to be part of the new regulations that the government would bring out as a part of the new civil aviation policy.

It is expected that allowing airlines to be own and operate terminals in various airports will help them to drive more traffic to these airports. Besides, it will also open additional revenue source for them.

The permission to own terminals will come with conditions including conditions guaranteeing a specific quantity of traffic to the airports by the airline.

"Allowing airlines with conditions on guaranteed traffic will boost the health of these airports," said a government source.

This move also assumes importance as the government want to set up hub airports in certain key locations in the country, where the private airlines can operate in a hub and spoke model.

This model was proposed to ensure better connectivity and to allow a higher utilisation of capacity by the airlines.

In this model, the airlines would make an airport at a central position as a hub airport for the whole country and will use it to service the whole region.

The government is of the view, in such a model allowing airlines to own and operate terminals will help them to direct traffic to these airports.