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Bangalore-based Regional Airport-Holdings International (RAHI) plans to focus on developing regional airports in the country as well as float a regional airline.
The company is currently developing two green-field airports in Karnataka — Gulbarga and Shimoga. RAHI is a joint venture between IL&FS Transportation Networks Ltd (ITNL) and Comet Infra-Developments Pvt Ltd.
“We want to focus on smaller destinations and grow them. With incumbent airlines not focusing on smaller destinations, it becomes a necessity for us to start our own regional airline. This is the opportunity we see to operationalise our airports,” said Mr Umesh Kumar Baveja, Director – Comet Infra-Developments and Founder-Chairman – RAHI. Regional airports typically have the capacity to handle 1 million passengers per year.
Greenfield airports
The airports in Gulbarga and Shimoga are being developed with a total outlay of about Rs 500 crore. While 25 per cent of these would be funded by equity, the rest would be through debts. The Gulbarga airport would see an outlay of Rs 210 crore, and the company has already achieved financial closure for this. The Gulbarga and Shimoga airports would be operational by mid-2012, and “we hope to operationalise the regional airline in tandem with the two airports becoming operational,” he added.
Though business plans for the aviation services are yet to be firmed up, Mr Baveja said that the company would operate 10-50 seater aircraft to cater to the existing demand. The company is looking at an initial investment of $5-10 million for acquiring five aircraft. “Funding would be determined by the month-end,” he said.
Industry clusters
In order to make the airports viable, RAHI also plans to develop geo-specific industry clusters such as an aerospace cluster in Gulbarga, and horticultural and floricultural cluster in Shimoga.
Mr Baveja said that over the next five years, the company would invest in 15 aviation infrastructure and services projects worth Rs 3,000 crore. He added that funding would not be an issue, since the company already has limits that it can avail. “We are now geared up to bid for future projects too,” he said, pointing out that the company did not bid for any projects in the past one year. According to him, the company's initial focus would be in the South, and later on look at projects in other regions too.
These projects were originally awarded to the Maytas, NCC and Vienna International Airport consortium in 2007, but RAHI entered the project after the Satyam fiasco, said Mr Baveja. Since statutory regulations demand that the original awardee retain the concession for seven years, the consortium members would hold 26 per cent stake each in the projects. “But RAHI would buy out the 78 per cent at the end of the seven-year period,” said Mr Sandeep Mendiratta, Head – Aviation Business, ITNL, and Member of the RAHI board.
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