Rajeev Chandrasekhar-promoted Jupiter Aviation kickstarted the development work at Hassan airport.
The airport is expected to be ready within 18 months, with the first aircraft expected to land by early 2009.
According to a statement from Jupiter, the airport is expected to cater to business tourists in Hassan, Chikmagalur, Mysore and Tumkur. With the development of the airport, Hassan's main commercial business of coffee exports is expected to get a boost.
The airport will also help to promote the tourism spots in Hassan - Shravanabelagola, Belur and Halebidu.
A training hub will be set up in Hassan to supplement the functioning of the airport. VimanaVidhya, the aerospace academy promoted by Jupiter Aviation, will train over 600 pilots and related staff at various levels. The airport will be an aircraft maintenance and modification hub.
S Ravi Narayanan, CEO and MD of Jupiter Aviation, said, "This is a part of Rajeev Chandrasekhar's commitment to Karnataka. We want to create an aviation ecospace in Hassan giving this tier-II city a shot in the arm in the business and tourism map.
"The airport and related aviation activities will generate significant employment opportunities in the next five years. By then, we would have brought vital investments to the region in and around the Hassan Airport."
With Jupiter Aviation's international alliances with EADS, Airbus, Thales and ESMA, Hassan airport is expected to receive their respective skillsets in technology, venture and infrastructure development.