Exiting the Terminal
Fortune India|May 2021
The Airports Authority of India’s planned exit from four metro airports and its privatisation drive has raised concerns about ‘private monopoly’. But the government is clear: monetise operating public infrastructure assets to finance new ones.
ANSHUL DHAMIJA

The monetisation of operating public infrastructure assets to the tune of ₹2.5 lakh crore by the Narendra Modi-led government will see the Airports Authority of India (AAI) sell its stakes in the country’s top metro airports of Delhi, Mumbai, Bengaluru, and Hyderabad. Collectively, they handle more than half of the country’s overall air passenger traffic. This comes after the AAI took to a public-private model in building new airports and ramping up existing airport capacities, beginning in 2006 with the brownfield expansion of Mumbai and Delhi airports.

An aviation executive, who did not wish to be named, said the decision could have stemmed from the question “How does it benefit AAI to remain invested?” What really benefits the country’s nodal airport operator is the revenue share aspect that is encapsulated in the concession agreements with private airport operators. For example, the share of revenue (gross) to AAI is 46% in case of the Delhi airport and 39% in the case of Mumbai airport. Together, they contribute a bulk of AAI’s revenue (25% in FY18), which makes it one of the few profitable public sector enterprises.

“These two airports have generated ₹29,000 crore till December 31, 2020. Even after the stake sale, @AAI_Official [AAI] will continue to receive this share which will be used to develop aviation infrastructure,” tweeted Hardeep Singh Puri, minister of civil aviation, on March 15. “Those who are raising concerns should also know that @DelhiAirport and @CSMIA_Official [Mumbai airport] are on a 60-year lease; these and the six other airports [that were privatised last year] will be back with AAI after the lease period. So, nothing as they claim, is being ‘Sold Out!’,” the minister tweeted in response to a tweet by Congress leader Rahul Gandhi.

Privatisation, tweeted the minister, is a means of raising resources to fulfil the aspirations of citizens without imposing new taxes. However, not many in the aviation industry see it from the lens of Puri.

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