The adoption of an open skies policy post the economic liberalisation of 1991 has increased air traffic substantially. Between 2006 and 2013, the total air passenger traffic grew by about 65% from 96 million to 159 million passengers in the country. With increasing air traffic the infrastructure of the existing airports encountered capacity constraint and necessitated modernisation and upgradation. To bring a quick turnaround, the Central Government and the Airports Authority of India (AAI) jointly took a series of initiatives to minimise challenges and ensure exponential growth of the sector.
Firstly, the AAI Act was amended to allow airport privatisation, a Public-Private Partnership (PPP) model for development of greenfield airports and modernisation of existing airports was then put in place supported by the 100% FDI allowance in greenfield airports under the automatic route and 100% FDI for expansion/upgradation of existing airports subject to FIPB approval for funding beyond 74%. Apart from these essential grants, they also adopted global concepts such as the airport city model or the aerotropolis model while developing new airports.
Investment hubAn aerotropolis is a form of urban development with an airport city at the centre and aviation-linked businesses agglomerating around it, thus harnessing it into a dynamic investment hub. A popular global concept, this model of developing cities around an airport is only now being explored in India and has been incorporated in the relatively new greenfield airports of Bengaluru, Hyderabad and Kochi. Meanwhile, the airport city has the terminal building with its retail and business facilities representing the urban square and its office, hospitality, convention facilities and other uses within the airport fence analogous to the CBD of a city. Both the ‘Airport City’ and ‘Aerotropolis’ are the two models for an airport centric development, popularly used in most developed nations. A comparative matrix of the operational capacity and future development possibilities is crucial to understand the nature of the developing city prior to adoption of the specific model. Post a detailed analysis of the Kempegowda International Airport (KIA) and the area under the jurisdiction of Bengaluru Airport Area Planning Authority (BIAAPA), Bengaluru has been identified as India’s first true aerotropolis in the making.
Bengaluru’s strategic location, regional connectivity, infrastructure, regional economy, operational capacity, governance and real estate demand are sure to make it South-East Asia’s next airport capital after Changi International Airport, Singapore, and Incheon International Airport, Seoul, South Korea.
(The author is an industry expert, associated with a workplace solutions firm)
