Indian PPP airports drive 340% growth in retail and other non-aero revenues over 5 years

India embarked upon a multi-billion dollar airport modernisation programme in 2005. One of the key pillars of this programme was the introduction of the public-private partnership (PPP) model to upgrade and develop the two primary gateways at Delhi and Mumbai, and to construct greenfield facilities in Bangalore and Hyderabad. Prior to this, all airports in the country, with the exception of Cochin Airport, were operated by the state-owned Airports Authority of India (AAI).

Private capital was attracted to the Indian airport opportunity from two perspectives. Firstly, fast growing passenger and freight traffic, and secondly, there was seen to be significant upside potential in non-aeronautical revenue. In FY2006, the last year in which all metro airports were operated by the AAI, non-aeronautical activities generated just 15.1% of total revenue, compared with around 50% or more being achieved by commercially driven airports in other parts of the world.