With better airports, booming traffic, Andhra's aviation vision poised for take-off
The Andhra Pradesh Aviation Policy 2026 pitches air travel and trade as a prime driver of growth to realise the state's ambition of a $2.4 trillion economy by 2047
In sync with Viksit Bharat@2047, National Democratic Alliance (NDA)-ruled Andhra Pradesh has targeted transforming itself into a $2.4 trillion economy under the Swarna Andhra@2047 vision. To achieve this, the state is aiming for a solid annual growth rate of 15 per cent.
In step with this, the Naidu cabinet last week approved the Andhra Pradesh Aviation Policy 2026, aiming to expand the passenger market share from 1.5 per cent, or 6.2 million passengers per annum (MPPA), in 2025-26 to 4 per cent (30.38 MPPA) by 2035, and 7 per cent by 2047.
While developing the Amaravati airport as a global aviation destination, the state will operationalise nine additional airports and over 10 heliports and waterdromes (seaplane landing-take-off facilities). By this, the government intends to provide air connectivity to Amaravati from all airports in the state beyond 200 km. At the same time, it will increase domestic connectivity by more than double to over 25 destinations in India and international connectivity to over 10 destinations.
Officials said that given the length of the state—its north and south points 1,200 km apart—there is a need to build extensive air connectivity. In that context, the aviation policy aims to provide citizens access to airports within 150 km.
Andhra Pradesh has six operational airports, with the one at Visakhapatnam (under defence establishment control) the largest and handling about three million passengers annually. It is followed by Vijayawada airport (1.4 million traffic) and Tirupati airport (1.2 million). The airports in Rajahmundry, Kadapa and Orvakal handle under 1 million fliers every year.
Even as the GMR-built mega greenfield airport near Visakhapatnam opens next month, the Naidu administration is planning small, no frills airports for distant locations. One of the nine additional airports to come up will be at Dagadarthi near Nellore, a manufacturing base and sea port centre close to Chennai. The airport was planned as a low-cost project a decade ago in Naidu’s previous term as chief minister, but it was scrapped by the subsequent Jagan Mohan Reddy government.
Now, following revised approvals and clearances from the civil aviation ministry, headed by TDP MP Kinjarapu Rammohan Naidu, the Andhra Pradesh government has finalised global tenders to develop the airport in public-private-partnership (PPP) mode. Land acquisition is underway. The Naidu government had also applied for another airport at Kuppam, the assembly constituency of the chief minister.
Another major goal is increasing the air cargo market share from the abysmal 0.2 per cent (6,240 MT) in 2025 to 5 per cent (427,500 MT) by 2035. The state wants to achieve this by harnessing its position as the largest marine exporter in the country, accounting for about 32 per cent of India’s marine exports worth $7.4 billion.
Presently, most of the marine items in frozen form are exported through sea, and the live produces through large aviation hubs in neighbouring states. To dominate this business, the government is promoting dedicated air-cargo infrastructure, including mini logistics parks, warehousing and perishable/special cargo handling at airports that attract over 1 million passengers every year.
The aviation policy document, accessed by INDIA TODAY, also aims to increase Andhra Pradesh’s share in the MRO (maintenance, repair and operations) industry to 10 per cent by 2035, attract Fortune 500 global OEMs (original equipment manufacturers) and develop an aerospace manufacturing cluster. It aims to attract over Rs 100 crore worth of investments in aerospace manufacturing by 2030 and train 5,000 professionals by setting up an aviation university, specialised aviation skill development centres and flight training institutions.
To attract industry for these purposes, the policy is offering fiscal incentives as well as non-fiscal state support. The state will provide financial support for airport projects undertaken on a PPP basis and bridge gaps if any through the viability gap funding (VGF) scheme of the Union government, which provides for a capital grant of up to 20 per cent of the project cost.
The state may supplement the scheme by up to an additional 20 per cent of the project capital expenditure (subject to a VGF ceiling of Rs 200 crore) on a case-to-case basis. Where VGF is found inadequate to make a project commercially viable, the government may consider additional financial incentives or capital support.
For airports and waterdromes developed on PPP basis, the state proposes to grant a moratorium of up to 10 years on payment of revenue share, licence fee or concession fee. There is also a 100 per cent, one-time reimbursement of stamp duty/ transfer duty on all ‘project agreements’ that are part of the concession agreement.
To improve connectivity, the policy offers airlines reimbursement of parking and landing charges for the first three years for new international routes. Also offered is VGF on unserved/underserved domestic/regional routes on a case-to-case basis through a competitive bidding process on a lumpsum basis or per round trip route (subject to minimum three flights a week for a year). It offers to coordinate with the Airports Authority of India/airport developers to facilitate a variable tariff plan at airports within the state.
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In sync with Viksit Bharat@2047, National Democratic Alliance (NDA)-ruled Andhra Pradesh has targeted transforming itself into a $2.4 trillion economy under the Swarna Andhra@2047 vision. To achieve this, the state is aiming for a solid annual growth rate of 15 per cent.
In step with this, the Naidu cabinet last week approved the Andhra Pradesh Aviation Policy 2026, aiming to expand the passenger market share from 1.5 per cent, or 6.2 million passengers per annum (MPPA), in 2025-26 to 4 per cent (30.38 MPPA) by 2035, and 7 per cent by 2047.
While developing the Amaravati airport as a global aviation destination, the state will operationalise nine additional airports and over 10 heliports and waterdromes (seaplane landing-take-off facilities). By this, the government intends to provide air connectivity to Amaravati from all airports in the state beyond 200 km. At the same time, it will increase domestic connectivity by more than double to over 25 destinations in India and international connectivity to over 10 destinations.
Officials said that given the length of the state—its north and south points 1,200 km apart—there is a need to build extensive air connectivity. In that context, the aviation policy aims to provide citizens access to airports within 150 km.
Andhra Pradesh has six operational airports, with the one at Visakhapatnam (under defence establishment control) the largest and handling about three million passengers annually. It is followed by Vijayawada airport (1.4 million traffic) and Tirupati airport (1.2 million). The airports in Rajahmundry, Kadapa and Orvakal handle under 1 million fliers every year.
Even as the GMR-built mega greenfield airport near Visakhapatnam opens next month, the Naidu administration is planning small, no frills airports for distant locations. One of the nine additional airports to come up will be at Dagadarthi near Nellore, a manufacturing base and sea port centre close to Chennai. The airport was planned as a low-cost project a decade ago in Naidu’s previous term as chief minister, but it was scrapped by the subsequent Jagan Mohan Reddy government.
Now, following revised approvals and clearances from the civil aviation ministry, headed by TDP MP Kinjarapu Rammohan Naidu, the Andhra Pradesh government has finalised global tenders to develop the airport in public-private-partnership (PPP) mode. Land acquisition is underway. The Naidu government had also applied for another airport at Kuppam, the assembly constituency of the chief minister.
Another major goal is increasing the air cargo market share from the abysmal 0.2 per cent (6,240 MT) in 2025 to 5 per cent (427,500 MT) by 2035. The state wants to achieve this by harnessing its position as the largest marine exporter in the country, accounting for about 32 per cent of India’s marine exports worth $7.4 billion.
Presently, most of the marine items in frozen form are exported through sea, and the live produces through large aviation hubs in neighbouring states. To dominate this business, the government is promoting dedicated air-cargo infrastructure, including mini logistics parks, warehousing and perishable/special cargo handling at airports that attract over 1 million passengers every year.
The aviation policy document, accessed by INDIA TODAY, also aims to increase Andhra Pradesh’s share in the MRO (maintenance, repair and operations) industry to 10 per cent by 2035, attract Fortune 500 global OEMs (original equipment manufacturers) and develop an aerospace manufacturing cluster. It aims to attract over Rs 100 crore worth of investments in aerospace manufacturing by 2030 and train 5,000 professionals by setting up an aviation university, specialised aviation skill development centres and flight training institutions.
To attract industry for these purposes, the policy is offering fiscal incentives as well as non-fiscal state support. The state will provide financial support for airport projects undertaken on a PPP basis and bridge gaps if any through the viability gap funding (VGF) scheme of the Union government, which provides for a capital grant of up to 20 per cent of the project cost.
The state may supplement the scheme by up to an additional 20 per cent of the project capital expenditure (subject to a VGF ceiling of Rs 200 crore) on a case-to-case basis. Where VGF is found inadequate to make a project commercially viable, the government may consider additional financial incentives or capital support.
For airports and waterdromes developed on PPP basis, the state proposes to grant a moratorium of up to 10 years on payment of revenue share, licence fee or concession fee. There is also a 100 per cent, one-time reimbursement of stamp duty/ transfer duty on all ‘project agreements’ that are part of the concession agreement.
To improve connectivity, the policy offers airlines reimbursement of parking and landing charges for the first three years for new international routes. Also offered is VGF on unserved/underserved domestic/regional routes on a case-to-case basis through a competitive bidding process on a lumpsum basis or per round trip route (subject to minimum three flights a week for a year). It offers to coordinate with the Airports Authority of India/airport developers to facilitate a variable tariff plan at airports within the state.
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