The Airports Authority of India (AAI) will begin the third stage of airport privatisation from October, if the third wave of COVID-19 turns out to be milder than the second wave and air passenger traffic continues rising, Ministry of Civil Aviation (MoCA) sources told Moneycontrol.
The AAI had selected six airports -- Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Trichy -- for the next round of privatisation, officials said.
The government plans to bundle the Jharsuguda airport with Bhubaneswar in Odisha, Kushinagar and Gaya airports with Varanasi in Uttar Pradesh, Kangra airport with Amritsar in Punjab, Jalgaon airport with Raipur in Chhattisgarh, Jabalpur airport with Indore in Madhya Pradesh, and Salem airport with Trichy in Tamil Nadu, before offering it to prospective bidders
Clubbing of airports
Frequently Asked Questions
As part of its third round of inviting bids for airport privatisation, the AAI is looking at a new model where a profitable airport and a non-profitable airport will be clubbed before being put on the block.
The MoCA was earlier looking to start the next round of airport privatisation in April, but those plans were delayed due to the outbreak of the second wave of COVID-19 by the end of March.
“Air passenger traffic is likely to reach around 80 percent of the pre-COVID levels by October, if there is no new wave of COVID-19 or if the third wave is milder. We are hoping to invite bids for the new airports by October," the official said.
The government is also looking to hand over control of the Ahmedabad, Mangalore, Jaipur, Lucknow, Guwahati and Thiruvananthapuram airports to the Adani Group by October, thus completing the last of airport privatisation.
A query sent to AAI is yet to elicit a response.
Interest rising for privatisation of more airports
Furthermore, the ministry has also received interest for the privatisation of more airports under the privatisation programme.
“We have received interest for the privatisation of many more airports, including Darbhanga in Bihar, and Puducherry," the official said, adding that the government is currently looking at ways to increase the attractiveness of these airports.
Finance minister Nirmala Sitharaman had, in her budget speech, said that the government will privatise airports operated by AAI from Tier II and III cities during 2021-22.
How they fared
In the year ended March 31, 2021, Bhubaneswar, Amritsar, Indore, Varanasi, Raipur and Trichy reported losses of Rs 13.34 crore, Rs 87.42 crore, Rs 23.86 crore, Rs 51.63 crore, Rs 40.5 crore and Rs 27.32 crore, respectively, due to the outbreak of COVID-19.
However in 2019-20, Bhubaneswar, Amritsar, Indore and Trichy had reported profits of Rs 34.22 crore, Rs 92 lakh, Rs 4.47 crore and Rs 22.85 crore, respectively.
While Varanasi and Raipur reported losses of Rs 1.6 crore and Rs 26.65 crore, respectively, the losses were much lower, compared to the losses incurred in 2020-21.
Similarly, airports in Jharsuguda, Gaya, Kangra, Jalgaon, Jabalpur and Salem reported net losses of Rs 15.39 crore, Rs 24.56 crore, Rs 8.63 crore, Rs 5.37 crore, Rs 23.1 crore and Rs 3.21 crore, respectively.In 2019-20, these airports had 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.
Before the outbreak of COVID-19, regional routes and airports were reporting faster growth in passenger traffic, compared to established routes.
A look at the air passenger traffic data from 2018-19 and 2019-20 (pre-COVID-19) shows that regional routes from Ranchi, Surat, Vijayawada, Bhubaneswar and Varanasi have grown much faster than established routes from Delhi, Mumbai, Chennai, and Bengaluru.