The government is set to revive its airport privatisation programme with 11 Airports Authority of India (AAI) airports being prepared for long-term public-private partnerships, while putting in place a cap on the number of airport bundles that a single bidder can win to prevent excessive concentration in the sector.
The Public Private Partnership Appraisal Committee (PPPAC), at its meeting on August 4, gave in-principle approval to the Ministry of Civil Aviation’s proposal to offer the 11 airports in five bundles for operation, management and development for 50 years. The proposal is part of the government’s broader effort to monetise airport assets and bring private capital and expertise into airport operations.
The five proposed bundles are Amritsar-Kangra, Varanasi-Gaya-Kushinagar, Bhubaneswar-Hubballi, Raipur-Aurangabad and Tiruchirappalli-Tirupati. The government has clubbed relatively stronger airports with smaller airports to allow the private operator to use the cash flows from the larger airports to cross-subsidise operations and investments at the smaller ones.
The bidding parameter will be the per-passenger fee for domestic passengers, with the international passenger fee set at twice the domestic passenger fee. The concessionaire will be responsible for operation, management and development of the airports, while air traffic control and communication, navigation and surveillance services will continue to remain with AAI.
The decision to cap the number of bundles that a single bidder can win marks a significant departure from the previous large-scale airport privatisation exercise, when the Adani Group emerged as the highest bidder for all six airports offered by AAI.
The Finance Ministry, during the latest PPPAC meeting, flagged the oligopolistic nature of the aviation sector and raised concerns that concentration and over-leveraging by an airport operator could create risks across multiple projects.
In response, the Civil Aviation Ministry said the number of airport bundles that could be awarded to one bidder would be capped. The exact limit, however, is still being finalised and will be placed before the PPPAC when the ministry seeks its final recommendation.
The concern comes at a time when India’s airport operations are already concentrated among a handful of private players. Adani Airport Holdings currently has eight airports in its portfolio — Mumbai, Navi Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram — and accounts for about 25% of passenger footfalls, according to the company.
GMR Airports operates four airports in India — Delhi, Hyderabad, Goa, Bidar, Nagpur and Bhogapuram. Together, Adani and GMR account for more than half of India’s passenger traffic, according to recent industry data.
Despite the growing presence of private airport operators, AAI remains the country’s dominant airport infrastructure owner and operator by number of airports.
AAI manages 129 airports, including international, customs and domestic airports.
India’s airport privatisation programme began with Delhi and Mumbai, which were handed over to private operators in 2006. The two airports were followed by greenfield PPP projects at Hyderabad and Bengaluru, which became early examples of private participation in airport infrastructure.
The next major brownfield privatisation came in 2018-19, when AAI invited global bids for six airports — Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram. Adani Enterprises emerged as the highest bidder for all six airports.
The government had subsequently planned a much larger second phase.
In 2021, AAI had identified 13 airports for PPP and proposed clubbing smaller airports with larger ones. The proposed combinations included Varanasi with Kushinagar and Gaya, Amritsar with Kangra, Bhubaneswar with Tirupati, Raipur with Aurangabad, Indore with Jabalpur and Tiruchirappalli with Hubballi. AAI had planned to complete the bidding within that financial year.
Separately, the National Monetisation Pipeline had identified 25 AAI airports for asset monetisation between 2022 and 2025.
However, the broader 13-airport plan did not translate into a completed auction of all the proposed assets. The latest proposal has now narrowed the immediate programme to 11 airports and five bundles, while also introducing an explicit safeguard against one bidder accumulating too many airports.