Cochin airport seeks SEZ status

MUMBAI: Cochin International Airport Ltd (CIAL), the first public private partnership initiative in airports, may also be the first to get airport SEZ status in the country, provided it gets the green signal from the Centre.

The board of directors of CIAL have taken an in-principle approval to apply for Special Economic Zone (SEZ) status to the central government for the airport recently.

The SEZ status will give the firm a large number of tax exemptions and benefits and would be a further boost for CIAL's various projects, especially the proposed IT/ITES Park project, maintenance repair and overhaul (MRO) project and knowledge processing based projects.

These projects undertaken by CIAL as part of its land utilisation plan, will see huge inflow of investments due to the SEZ status, making the project costs more effective.

It would also help CIAL make better and more revenues and profits in the long run. It would also provide a huge boost to the shareholding value of its investors.

About 40% of the stake in CIAL is held by NRIs, while 44% is held by the state government and the public sector units (PSUs). The remaining 16% is held by small investors.

During the financial year 2006-07, CIAL has posted a profit after tax (PAT) of Rs 37.50 crore, compared with Rs 31.60 crore in the previous fiscal, witnessing a rise of 18.67%. The total turnover during the same period was Rs 112 crore.

The airport retailing business initiatives undertaken by CIAL was the main driving force behind its performance.

The revenues from airport retailing, especially duty free business, has contributed to almost 30% of the gross revenues of CIAL.

The duty free sales revenue reported a surge of 44% to Rs 32.5 crore in FY'07 compared with Rs 22.6 crore in the earlier fiscal.

The board of directors also reviewed the progress of the two other projects undertaken by CIAL including the MRO and the Aviation academy project, and airline service project to be implemented by its subsidiaries, Cochin International Aviation Services Ltd (CIASL) and Air Kerala International Services Ltd (AKISL), respectively.

The MRO project, including building of hangar and the aviation academy, is on track and is expected to be completed in a year's time.

The company has appointed Aerobiz international, an aviation consultant, for the project and is in process of short listing a strategic partner for the joint venture from the large number bids it has received from the national and international players.

CIAL's dream plan to fly its own low-cost carrier under the Air Kerala banner to international destinations including Gulf and Middle East, which was grounded earlier due to restrictions imposed by the civil aviation ministry on international operations, is being revived.

The company will be exploring possibilities of starting this project on a joint venture basis and will be holding discussions with domestic airlines to start operations to both domestic as well as international destinations from the Cochin Airport.

Jet Airways and JetLite (formerly known as Air Sahara) have permission to fly to Gulf, while Air Deccan may start operations next year.

Further, the Center under the new civil aviation policy - Vision 2020, is also looking at relaxing the 5 year norms for international operations.

CIAL also plans to start a fully-dedicated cargo service to national and international destinations from the airport.

It is in the process of developing a fully dedicated cargo facility for perishable goods - Centre for Perishable Cargo (CPC) - which will be ready in 6 months from now, an official source informed. The facility will handle perishable goods including vegetables bound for Gulf region in specific.

S Bharath, managing director of the Cochin International Airport, was not available for comment.