Cabinet nod for privatisation of 3 airports signals Govt thrust on airport infra modernisation

The Union Cabinet having given its nod to the civil aviation ministry’s proposal to give the operations of the airports at Ahmedabad, Lucknow and Mangaluru to the Adani Group for a period of 50 years has underlined the Government’s thrust on accelerated modernisation and expansion of the country’s civil aviation infrastructure. The lease, based on a PPP between the Airport Authority of India (AAI) and the Adani Group, will guarantee higher revenues to AAI on a fee per passenger basis, and the revenues thereof will be utilised for enhancing and creating airport infrastructure in small cities.

The Cabinet approval for the ministry’s proposal for privatising the Trivandrum and Guwahati airports will reportedly be taken some time later.

The civil aviation’s move is synchronous with the remarkable growth in domestic and international air traffic in India. The Directorate General of Civil Aviation (DGCA), Government of India data indicates that passengers carried by domestic airlines during Jan-May 2019 were 586.54 lakh as against 571.58 lakh during the corresponding period of previous year, thereby registering a growth of 2.62%. This is illustrated in the table:

TABLE: Year-on-Year (Jan – May, 2008 & 2019) and Month-on-Month (May, 2018 & 2019) data on domestic air passenger traffic

Source: http://dgca.nic.in/reports/Traffic-ind.htm

Earlier, in April 2019, the International Air Transport Association (IATA) in its report had cited that the Indian civil aviation market reported a record double digit growth for 54 consecutive months.

India’s air passenger traffic is expected to grow six-fold to 1.1 billion and the number of operational airports increase to around 200 in 2040, as per the ‘Vision 2024 for the Civil Aviation Industry in India’, that was released by the Ministry of Civil Aviation in January 2019.