Which 11 AAI Airports Are Being Privatised, and Why Does it Matter?

The Indian government is moving forward with the third round of airport privatisation, a key part of its National Monetisation Pipeline (NMP) strategy. The Ministry of Civil Aviation (MoCA) has sent a proposal to the Public Private Partnership Appraisal Committee (PPPAC) for the in-principle clearance of 11 Airports Authority of India (AAI) facilities. This move aims to unlock capital and modernise infrastructure across the country.

The 11 Airports and the Bundling Strategy

This round marks the first time a bundling strategy is being used. The goal is to pair commercially successful airports with smaller, less-profitable ones. This cross-subsidisation aims to attract private investment for regional connectivity and development.

The 11 airports are grouped into five bundles:

• Amritsar and Kangra
• Varanasi, Kushinagar, and Gaya
• Bhubaneswar and Hubli
• Raipur and Aurangabad
• Tiruchi and Tirupati

These facilities were selected from AAI airports handling between 0.1 and 1 million passengers annually. The government plans to launch the tender process for these assets by March 2026, following final approval from the Union Cabinet.

The Privatisation Process and Goals

The privatisation of airports in India began in 2003 with the leasing of Delhi and Mumbai airports. The model shifted significantly in 2019. The six airports privatised that year, all won by the Adani Group, moved from a revenue-share model to a per-passenger fee model. For instance, the Adani Group paid AAI ₹177 per passenger at Ahmedabad in the first year, with a 5% annual increase.

The current round will see the PPPAC evaluate key aspects. These include the optimal revenue-sharing model and the need for a cap on the number of airports a single entity can win. These factors are crucial to ensure air travel costs remain affordable for smaller cities.

Concerns Over Monopoly and Rising Costs

The rapid consolidation in the airport sector has raised concerns about a potential monopoly. The Adani Group now operates eight major airports, including the six won in the 2019 round, plus Mumbai and Navi Mumbai airports. This concentration of control has led to limited bargaining power for airlines and passengers.

Impact on Airlines and Passengers

Privatisation is meant to boost efficiency, but it often leads to rising costs for both airlines and passengers. The Airport Economic Regulatory Authority (AERA) approved a significant tariff revision at Thiruvananthapuram Airport after the Adani takeover. The User Development Fee (UDF) for domestic travelers increased from ₹506 to ₹770, with further hikes planned until 2027.

• UDF Hike: Domestic UDF rose by over 50% for the first year of the revised tariff.
• New Fees: A disembarkation fee was introduced for arriving passengers.
• Regulatory Scrutiny: AERA pulled up the airport for under-reporting non-aeronautical revenue projections. This revenue is meant to cross-subsidise charges on airlines and passengers.

Furthermore, the Adani Group has faced recent disputes over alleged monopolistic charges at the new Navi Mumbai Airport. Telecom operators complained about "extortionary charges" to use the in-building network, alleging a refusal of "right of way" for their own infrastructure.

Future Outlook for Indian Aviation

India is the world’s third-largest aviation market, yet only about 6% of Indians currently travel by air. This low penetration rate signals enormous growth potential. The government aims to build 50 new airports over the next five years to meet rising demand. By FY2026, India's airports are expected to handle around 550 million passengers per annum (mppa). Industry estimates suggest capacity must grow to about 850 mppa within five years.

Supporting this growth requires not just new facilities but also a competitive market. The upcoming privatisation round will test the government's ability to balance private investment with regulatory oversight. This is vital for maintaining affordable air travel and ensuring fair competition in the rapidly expanding sector. For more commercial aviation news, visit flying.flights.