Is Andhra’s Airport Push in Amaravati Backed by Real Demand?

“We want an international airport in Amaravati, Andhra Pradesh that surpasses the one in Bengaluru. The state government will not invest in it. Investors will bear the cost. The government will earn revenue through it.” These were the remarks made by Andhra Pradesh Chief Minister Chandrababu Naidu during his visit to Delhi on Friday. The GMR International Airport, which began operations 17 years ago, is still running at a loss. As is well known, this airport serves not only Hyderabad but the entire state of Telangana. Even people from Andhra Pradesh who wish to travel to international destinations mostly use the Hyderabad airport. In the 2024-2025 financial year, a total of 21.3 million people traveled through the Shamshabad Airport. The growth in passenger numbers at Hyderabad was higher than any other top airport in the country during the last financial year.
Despite such a high volume of passengers and flight movements, the GMR Airport has still not turned profitable. Expansion works are being carried out to meet the growing needs of passengers. However, while Chandrababu Naidu is expressing the desire to build an airport in Amaravati that surpasses Bengaluru’s, the number of passengers who traveled through the Gannavaram Airport in Vijayawada in the past financial year was only 1.38 million. The key question now is how much this traffic can increase in the next five years and how this airport can become profitable. Which investor would step forward to build an international airport after seeing these numbers? Experts in the field say that only places with a minimum annual traffic of over 6 million passengers have the potential to become even marginally profitable for a private airport.
On the other hand, unlike other projects, airports do not generate profits immediately after construction. Only companies that receive other benefits from the government are likely to come forward with such large investments, experts say. That is why the Chandrababu government is proposing to build the Amaravati Airport on a massive 5,000 acres. Even after projecting traffic for the next 25 years, including current Vijayawada traffic, the required land seems excessive. A government official revealed that companies may be convinced to take up such projects by showcasing the real estate value. The official added that only if some land is allocated for the airport and the rest is designated for real estate and other commercial purposes, any company might show interest. That is why the Chandrababu government says it will not invest and that a private company will handle it. In essence, land will be acquired from farmers and allocated not just for airport needs but also for the company’s commercial purposes.
However, the statement that the government will not invest at all is far from the truth. Even the GMR Airport built in Hyderabad 17 years ago has not yet become profitable. Despite the heavy traffic, it continues to run at a loss. Another crucial point here is that the cost of the PVNR Expressway and other connectivity roads built for the airport was greater than the construction cost of the airport itself. An airport is essential for development anywhere. But saying that the government will not spend a single rupee and that the private company will handle everything is nothing but misleading the public, according to government sources. On one hand, Chandrababu is calling Amaravati a self-financing project, and now he’s saying investors will also build the airport—officials are bewildered by this narrative. In that case, why limit this model only to Amaravati and its airport? Why not implement the same approach for all projects in the state, an official remarked. It’s well known that even when governments invest thousands of crores in such projects, private airport operators continue to burden passengers for years through User Development Fees (UDF). Ignoring all these facts, Chandrababu’s statement that the government will not invest and that everything will be taken care of by investors is nothing but an attempt to mislead the public, say government officials.