GMR Infra banks on non-aero revenues

GMR Infrastructure, one of the major infrastructure developers in India, has chalked out a strategy to focus on non-aero revenue from its airport business as a major source of income.

Elaborating the plans, V Raghunathan, director of GMR Group, said, "Our thrust will be to generate large revenue by means of non-aero revenue source. This can be achieved only when the air traffic from major international airports like Singapore and other South-East Asian countries is shifted to India."

He further said, "As per our plans we intent to shift the flow of the air traffic from these airports to India by making Indian airports the first choice for travellers as a halting destination."

The company will participate in the privatisation process of Kolkata and Chennai airports soon as the bids are invited by the government. Currently, the company is developing Delhi and Hyderabad airports on this line, Raghunathan said.

At international level, the generation of revenue is at 70:30 ratio from its non-aero source and aero source respectively. While in India only 48 per cent of revenue is generated from non-aero source.

"There is huge potential to generate income from non-aero and commercial activities and we are focusing on this revenue model," he said. "We will change the basic definition of airport operation to a commercially-oriented operation system," added Raghunathan.

As per the strategy, non-aeronautical activities like advertising fees, renting out office space for airlines, business shops, car parking and public admission fees will be utilised.

The company plans to develop Kolkata and Chennai airports as a major tourist and traveller destination. The company will also develop commercial centres like real estate development, hotels and malls near the airports to attract more passengers.

According to Raghunathan, "it is going to be entertainment airports with an air-strip attached."

As per the strategy, Indian airports will act as an entertainment hub for air passengers. With number of passengers choosing India as halting destination over the South-East Asian airports, airlines company will be compelled to increase aeronautical activities like landing, parking and passenger services at airports.

The company will have major earnings from non-aeronautical activities as well as from commercial activities. "There will be spiral affect of the revenue generation as one increase of revenue will led to other," added Raghunathan.