Govt Eyes Privatisation of 11 Airports by End of 2025-26: Full Details Inside

The Indian government is preparing for its third phase of airport privatisation, aiming to transfer operations of 11 airports to private entities by the end of the financial year 2025-26. According to reports, the strategy involves bundling loss-making airports with profitable ones to enhance investor appeal.

This initiative is part of a broader strategy to monetise state-owned assets and bridge the fiscal deficit. The 11 airports under consideration account for nearly 10% of total domestic passenger traffic and around 4% of international traffic in India.

Airports Identified for Privatisation

A combination of commercially viable and underperforming airports will be offered in the upcoming divestment phase:

• Varanasi Airport will be bundled with Kushinagar and Gaya airports. While Varanasi attracts millions of pilgrims, Gaya—despite its significance as a Buddhist pilgrimage site—sees relatively lower tourist footfall, and Kushinagar has reported no passenger traffic since June.
• Bhubaneswar and Amritsar airports will be grouped with Hubli and Kangra airports.
• Raipur and Tiruchirapalli airports will be clubbed with Aurangabad and Tirupati airports.

This strategic bundling aims to ensure that investors take on responsibility for loss-making airports while benefiting from the revenue streams of profitable ones.

The Rationale Behind Privatisation

The privatisation of these airports is part of a larger objective to raise ₹47,000 crore through asset monetisation in FY 2025-26. The government is seeking alternative revenue sources to manage its fiscal deficit, targeting a reduction to 4.4% of GDP.

The Airports Authority of India (AAI), currently managing these airports, will finalise the privatisation framework and seek government approval within the next month. The selected bidders will be determined based on their offer to share the highest revenue per passenger with AAI, ensuring a transparent bidding process.

Key Contenders for Bidding

The bidding process is expected to attract major airport operators, with industry giants likely to participate:

• Adani Airport Holdings Ltd, India’s largest private airport operator, is anticipated to be a strong contender. The Adani Group acquired 6 airports in the second phase of privatisation and also took over GVK’s stake in Mumbai International Airport.
• GMR Airports Ltd, which currently operates New Delhi’s Indira Gandhi International Airport, is another potential bidder. GMR secured its Delhi airport contract during the first phase of privatisation.

With these major players in the race, competition is expected to be intense, shaping the future of India’s airport infrastructure.

The Road Ahead

The privatisation of these airports marks a significant shift in India’s aviation sector, bringing in private expertise for improved operational efficiency. While privatisation is expected to enhance passenger experience and infrastructure development, it remains to be seen how it will impact airport charges, employment, and regional connectivity.

As the government moves forward with this initiative, industry stakeholders and travellers alike will be closely watching the developments in India’s evolving aviation landscape

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