Govt mulls revenue sharing model for new airport project

The civil aviation ministry on Tuesday proposed a revenue-sharing model for awarding greenfield airport projects to developers that is considered simpler and less prone to disputes about gold-plating of expenses.

According to the proposed model concession agreement, which will be fine-tuned after feedback from industry, airport developers will compete to win contracts based on the amount of revenue per passenger to be shared with the authority that gives the contract, instead of the current norm of developers sharing a part of the profit from the venture.

According to the new plan, the maximum charges that airports can levy from airlines—ultimately paid by the consumer—is capped at ₹400 and is partially linked to inflation. Airlines, of course, have the liberty to develop real estate and generate other revenue streams from the project to add to their profitability. The Mint reported.