The government intends to privatise 13 airports operated by the state-owned Airports Authority of India (AAI) by the end of the fiscal year. The AAI’s chairman, Sanjeev Kumar, stated that they had given a list of airports to the aviation ministry to bid on PPP (public-private partnership). The objective is to finish bidding on these airports by the end of the current fiscal year.
He went on to say that the per-passenger revenue model will be used for bidding. The technique has already been employed and has proven successful, and the Jewar airport (in Greater Noida) was also bid out using a similar model. Despite Covid, there will be takers for these projects because the disease’s impact is short-term, and the airports are available for 50 years.
The AAI has decided to connect seven tiny airports with six major ones: Varanasi with Kushinagar and Gaya; Amritsar with Kangra; Bhubaneswar with Tirupati; Raipur with Aurangabad; Indore with Jabalpur; and Trichy with Hubli.
The government intends to award 25 airports, including the 13 mentioned above, as part of the National Monetisation Plan (NMP) during the following four years. This follows the six given to the Adani Group in 2019 at the start of the second phase of privatisation following the handover of airports in Delhi, Mumbai, Bengaluru, and Hyderabad to private operators in 2005-6. The government intends to liberalise the industry by privatising profitable airports. The mandate of AAI will be broadened to create new ones in places where the private sector may be unwilling to enter due to earnings obtained through revenue share from privatised airports.
COVID cut down AAI’s revenues. It suffered a record loss of Rs 1,962 crore in FY21, forcing it to borrow Rs 1,500 crore from the State Bank of India to satisfy working capital obligations, including payroll. With the situation stabilising and passenger traffic increasing, AAI will not need to borrow working capital this year.