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Tuesday, April 13, 2021

Bundled for privatisation: 7 airports making losses

After leasing out Ahmedabad, Mangalore, Jaipur, Lucknow, Guwahati and Thiruvananthapuram airports on public-private partnership mode, the AAI had selected Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Trichy airports for the second round.

Written by Pranav Mukul , Sandeep Singh | New Delhi |
Updated: March 17, 2021 4:05:29 am

The Airports Authority of India (AAI) has identified seven airports alongside six others already shortlisted for the next round of airport privatisation, sources told The Indian Express.

After leasing out Ahmedabad, Mangalore, Jaipur, Lucknow, Guwahati and Thiruvananthapuram airports on public-private partnership mode, the AAI had selected Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Trichy airports for the second round.

The AAI now plans to bundle Jharsuguda airport with Bhubaneswar, Kushinagar and Gaya airports with Varanasi, Kangra airport with Amritsar, Jalgaon airport with Raipur, Jabalpur airport with Indore, and Salem airport with Trichy, before offering it to prospective bidders, a source close to the development said.

According to civil aviation ministry officials, this line-up is in keeping with the AAI’s proposed new model wherein a profitable airport and a non-profitable airport will be clubbed before being put on the block. One of the primary reasons behind this is to liberate AAI resources tied up with these airports.

An e-mail query sent to AAI did is yet to elicit a response.


Responding to a question in Parliament in February, Civil Aviation Minister Hardeep Singh Puri said the criteria for selection of airports for PPP mode included quantitative aspects such as total terminal area, growth rate in revenue, occupancy rate, total operating costs, per passenger operating costs, air traffic movement, passenger numbers, cargo volumes, etc. This is in addition to qualitative aspects such as capacity utilisation, expansion possibility, future development plans, economic attractiveness of location, urban population, net state domestic product, etc.

In the year ended March 31, 2020, Bhubaneswar, Amritsar, Indore and Trichy reported profits of Rs 34.22 crore, Rs 92 lakh, Rs 4.47 crore and Rs 22.85 crore, respectively. Varanasi and Raipur reported losses of Rs 1.6 crore and Rs 26.65 crore, respectively. The smaller airports being clubbed with these main assets, Jharsuguda, Gaya, Kangra, Jalgaon, Jabalpur and Salem, reported losses of Rs 16.29 crore, Rs 24.68 crore, Rs 9.72 crore, Rs 3.72 crore, Rs 19.24 crore and Rs 8.76 crore, respectively. Kushinagar did not report any loss.

In her Budget for 2021-22, Finance Minister Nirmala Sitharaman had said that as part of the asset monetisation programme, the government plans to privatise AAI-owned airports in Tier-2 and Tier-3 cities. Most of these smaller airports are mainly dependent on the government’s regional connectivity scheme UDAN for daily operations. Additionally, the Varanasi-Kushinagar-Gaya circuit was deemed important by the government for tourism purposes.

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