The board of directors of Cochin International Airport Limited (CIAL) Sunday recommended a dividend of 10 percent for the 2004-05 fiscal ended March 31.

Kerala Chief Minister Oommen Chandy chaired the board meeting here of CIAL, the country's first airport outside the ambit of the Airports Authority of India.

The dividend declared is on a paid up capital of Rs.1.48 billion. A maiden dividend of eight percent was declared in September last year.

"We decided to ask Ernst & Young to conduct a feasibility study on the possibility of CIAL operating a budget airline. Four months have been given for the report to be submitted," Chandy told.

The Chandy government had last week cleared in principle the need for setting up of a budget airline by the government with the help of CIAL.

V.J. Kurian, managing director of CIAL, said at the meeting it was decided to go for a rights issue in the ratio 6:1 which would come to Rs.250 million. Another Rs.250 million would be raised through a public issue.

"The traffic has picked up tremendously from a mere 76 flights per week in 1999 to a record 184 flights per week in the last fiscal. Total revenue for 2004-05 reached Rs.1 billion up from Rs.856 million for the year 2003-04. The number of passengers has gone up from 496,000 in 1999-2000 to 1.6 million in 2004-05," said Kurian.

The airport also earned a net profit after tax of Rs.280 million, up from Rs.211.1 million in 2003-04.

CIAL was formed as a public limited company with equity participation from the Kerala government and a large number of non-resident Indians, of which a majority are Gulf-based non-resident Keralites.

Presently, the Kerala government holds 35.56 percent while the directors hold 37 percent, the nationalized banks and public sector units like Air India hold 10.61 percent, non-resident Indians and the general public hold 14.63 percent and Federal Bank and other commercial banks hold 2.20 percent.