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Indian airports performing better in private hands: NITI Aayog

Improved utilisation of built-up area at airport complexes could lead to increase in non-aeronautical revenues for the operators.

Written by Pranav Mukul | New Delhi |
Updated: June 15, 2016 9:31:38 am
airport privatisation, privatisation of airport tariff, tariff regulation airport, NITI Aayog, public-private partnership, NDA-government, Indian airports, airports, Civil Aviation, DGCA, Airports Authority of India, AAI, ATR, Indian express The three best-rated airports according to the review presentation made by NITI Aayog were Delhi, Mumbai, and Hyderabad, said a source.

The NITI Aayog, in its review of the infrastructure sector for the financial year 2015-16, stated that privatised airports recorded higher performance with regard to customer satisfaction when compared with their counterparts operated solely by the Airports Authority of India (AAI).

The three best-rated airports according to the review presentation made by NITI Aayog were Delhi, Mumbai, and Hyderabad, said a source.

Delhi International Airport Pvt Limited (DIAL) is a joint venture, formed as a consortium between GMR Group, Airports Authority of India and Fraport AG & Eraman Malaysia with GMR being the lead member of the consortium. Similarly, the Hyderabad airport is also a joint-venture between GMR Group, and central and state governments. The GVK Group manages the Mumbai International Airport Ltd in a joint venture with the AAI.


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As per the Airport Service Quality Index, the top 11 AAI airports have been rated 4.53 on a scale of 5.00 during 2015-16, against a target of 4.55 and a benchmark of 4.88, according to the review presentation.

The NITI Aayog in its presentation before Prime Minister Narendra Modi has suggested that the AAI evaluates and identifies the next set of airports for privatisation, in light of the better performance showed by those already managed by private infrastructure companies.

The Aayog has already identified several airports —  including Ahmedabad, Indore, Pune, Nagpur — that fall in the middle-rung as per their performance and could do

with improvement to make their services more efficient. Apart from privatisation of airports, the NITI Aayog has also mooted some other remedial measures to improve productivity and quality of airports, which it has identified as one of the key challenges. While some of the interventions proposed are already a part of the draft civil aviation policy, the Aayog has reiterated that a periodic service quality survey should be conducted by a third party to pinpoint short-term issues faced by airport operators, which would then help them in resolving those. It has also said that improved utilisation of built-up area and available land bank at airport complexes could result in an increase of non-aeronautical revenues for the operators.

With the passenger and freight traffic growing 18 per cent and 6 per cent, respectively, during 2015-16, the Aayog has laid down plans for the aviation ministry to undertake to improve capacity utilisation at airports. It has suggested that an assessment be done to find out if runway utilisation could be increased at congested airports to deal with the growing traffic.

To improve air transport connectivity in the country, the NITI Aayog has suggested steps to make non-operational airports viable. It has recommended that methods such as viability gap funding be deployed to make these airports viable. Most of these airports are currently non-operational due to lack of traffic and airlines’ reluctance to operate from these. However, the government expects that on back of lower airport charges and a host of tax benefits, these airports will pick up commercially.

The Regional Connectivity Scheme (RCS) in the draft aviation policy has proposed to cap fares at Rs 2,500 for a one-hour flight. It proposes a 2 per cent levy on all domestic and international flights on metro routes to support regional connectivity.

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