The Centre has taken another step towards expanding private participation in India’s airport sector, giving in-principle approval to lease out 11 Airports Authority of India (AAI) airports to private operators under the public-private partnership (PPP) model.
The airports will be offered in five bundles, with each bundle going to a single private concessionaire for a proposed 50-year concession. The Public Private Partnership Appraisal Committee (PPPAC) approved the proposal in principle at its meeting on August 4, according to official documents.
The proposed airport bundles are designed to combine larger, established airports with smaller facilities. The five groups are Amritsar-Kangra-Gaggal, Varanasi-Gaya-Kushinagar, Bhubaneswar-Hubballi, Raipur-Aurangabad and Tiruchirappalli-Tirupati.
The government’s decision comes as India’s aviation sector continues to expand and airports across the country face growing demand for better infrastructure and passenger facilities. By bringing private companies into the operation and development of these airports, the Centre hopes to attract fresh investment while improving efficiency and service quality.
The bundling strategy is particularly aimed at making smaller airports more financially attractive to private operators. Instead of bidding for an individual airport, companies will compete for a group that combines a stronger airport with one or more smaller facilities. The idea is that revenues and passenger traffic from the larger airport can support investment and development at the smaller one.
Five airports have been identified as the larger or anchor facilities in the proposed groups — Amritsar, Varanasi, Bhubaneswar, Raipur and Tiruchirappalli. They will be paired with Kangra-Gaggal, Gaya, Kushinagar, Hubballi, Aurangabad and Tirupati.
Under the proposed PPP concession, private operators will take responsibility for the operation, management and development of the airports. This will include passenger terminals and city-side infrastructure, along with the investment required to expand facilities as traffic increases. The estimated investment by the private concessionaires across the 11 airports is around ₹8,622 crore.
The proposed concession period of 50 years gives operators a long-term horizon to recover their investments and develop airport infrastructure. The bidding mechanism is expected to use the per-passenger fee for domestic traffic as the key parameter, allowing companies to compete for the right to operate the bundled airports.
However, the government is also trying to ensure that the next round of airport privatisation does not result in excessive concentration of assets among a few large operators.
The Finance Ministry has raised concerns about the increasingly concentrated nature of India’s aviation industry. Officials have specifically flagged the possibility that excessive market concentration or over-leveraging by private airport operators could create risks across multiple projects.
To address this, the Civil Aviation Ministry has proposed capping the number of airport bundles that a single bidder can win. The exact limit has not yet been decided. The ministry is working on the details and is expected to place the final proposal before the PPPAC.
The proposed cap could become an important part of the bidding process because India’s airport market is already dominated by a handful of major private operators. The government wants to encourage private investment without allowing one company to accumulate too many airport concessions.
The proposed arrangement also includes measures concerning existing AAI employees. The government has suggested a one-year joint management period involving AAI staff after the private concessionaire takes over. The private operator would also be required to retain 60% of AAI employees for up to three years under the proposed structure.
At the same time, private operators will not control every airport-related function. AAI will continue to handle air traffic control and Communication, Navigation and Surveillance services. Cargo-related operations will also continue to involve AAI Cargo Logistics and Allied Services Company, or AAICLAS.
The latest proposal is part of the Centre’s broader airport privatisation programme. India has increasingly relied on PPPs to bring private capital and management expertise into airport infrastructure. The government has argued that the model can help modernise airports while allowing AAI to generate revenue and focus resources on other parts of the country’s aviation network.
For passengers, the impact of the proposed airport privatisation will ultimately depend on how the new concessionaires invest in the facilities. Improvements could include expanded terminals, better passenger amenities, upgraded technology and smoother airport operations. Smaller airports could also benefit from greater connectivity and infrastructure investment if the bundled model works as intended.
The government now needs to complete the remaining steps before the airports can formally be put out for bids. The in-principle approval from the PPPAC moves the proposal forward, but the final concession structure and bidding conditions will need to be settled before private companies can take part in the process.
The move also signals the Centre’s willingness to deepen private participation in aviation infrastructure while attempting to maintain competition. With 11 AAI airports being prepared for 50-year PPP concessions, the next phase of airport privatisation could bring significant changes to how some of India’s important regional aviation hubs are operated and developed.
The challenge for the Centre will be to strike the right balance: attract enough private capital to modernise airports, make smaller facilities commercially viable, protect employees and passengers, and prevent excessive concentration in an already competitive but increasingly consolidated aviation market.