Publicly owned airports across India should be given the freedom to develop their real estate for commercial ventures in order to make them more profitable, a government minister has argued.

Praful Patel, Minister of Civil Aviation, told reporters he is recommending that the Airports Authority of India Act 1994 be amended to allow the airport operator to pursue non-aeronautical land development projects.

Currently the act only allows for the construction of passenger-related facilities, such as residential buildings for airport employees, hotels, restaurants, cargo warehouses and postal or money exchange facilities.

"The idea is to maximise revenue from land use and it's essentially aimed at smaller cities where AAI would then be able to cross-subsidise its aeronautical operations. At present, many airports in smaller cities are not making money, but are important from connectivity point of view. We want them to become commercially viable," Patel said.

According to reports, the move is aimed at making airports, especially those in smaller cities more profitable by allowing them to develop hospitals, convention centres, leisure activities and other aviation-related buildings.

The ministry expects this to be a win-win move as greater commercial activities would generate more traffic for airport and also the resources required to keep currently loss-making airports viable.

By Oliver Clark