FLIGHT OF FANCY
In the fi rst phase, AAI will revive
50 underserved and unserved airports with an investment of ` 4,500 crore. The airports will be selected based on the interest shown by scheduled airlines to fl y to these destinations Between 2014 and 2016, the government spent around ` 600 crore to revive 25 airports, but could not attract airlines It is believed that under UDAN, subsidised air fares will generate demand from regional cities, which makes for a strong case for the
revival of these airports. The long- term sustainability of this demand is questionable Demand for airports comes mainly from tourists
and businesses. In the absence of these, the airports are unlikely to do well Despite over 90 per cent AAI- owned airports making losses, the national airports operator remains profitable. It generated a net profi t of ` 2,537.36 crore in 2015/ 16 Airlines is a cyclical business. Since the sector is upbeat, airlines are ready to take the risk of fl ying to underserved and unserved towns on the back of government subsidies. In a down cycle, they may need to relook their network