Government May Accept Bids For Privatisation Of Six Airports From October But Conditions Apply

If the Covid-19 third wave turns out to be milder than the second wave and air passenger traffic continues to rise, the Airports Authority of India (AAI) will begin the third stage of airport privatisation in October, said people linked to the Ministry of Civil Aviation (MoCA).

The officials familiar with the matter stated that AAI had chosen six airports for the next stage of privatisation which are Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Trichy.

As reported by Moneycontrol, before offering it to prospective bidders, the government intends to combine Jharsuguda airport with Bhubaneswar in Odisha, Kushinagar and Gaya airports with Varanasi in Uttar Pradesh, Jalgaon airport with Raipur in Chhattisgarh, Kangra airport with Amritsar in Punjab, Jabalpur airport with Madhya Pradesh's Indore and Salem airport with Trichy in Tamil Nadu.

The report said that the AAI is considering a novel model in which a lucrative airport and a non-profitable airport are combined before being put on the market as part of its third round of seeking proposals for airport privatisation. The MoCA had planned to begin the next stage of airport privatisation in April this year; however, this was postponed due to the second wave of coronavirus pandemic in India by the end of March.

According to an official, if there is no further coronavirus or if the third wave is milder, air passenger traffic will likely reach approximately 80 per cent of pre-Covid levels by October this year. He stated: "We are hoping to invite bids for the new airports by October."

However, by October, the government hopes to hand over control of the airports in Ahmedabad, Mangalore, Jaipur, Lucknow, Guwahati and Thiruvananthapuram to the Adani Group, completing the penultimate phase of airport privatisation.

Additionally, the government has received interest in privatising more airports as part of the privatisation agenda. Many more airports, including Darbhanga in Bihar and Puducherry, have sparked interest in privatisation, said the official, who added that the government is presently looking into measures to improve the appeal of these airports.

Earlier, Finance Minister Nirmala Sitharaman, in her budget statement, noted that the government would privatise AAI-operated airports in Tier II and III towns between 2021 and 2022.

Due to the pandemic, airports reported massive losses in the fiscal year ended 31 March 2021: Amritsar - Rs 87.42 crore, Varanasi - Rs 51.63 crore, Raipur - Rs 40.5 crore, Trichy - Rs 27.32 crore, Indore - Rs 23.86 crore and Bhubaneswar - Rs 13.34 crore.

Bhubaneswar, Amritsar, Indore and Trichy, on the other hand, made earnings of Rs 34.22 crore, Rs 92 lakh, Rs 4.47 crore, and Rs 22.85 crore in 2019-20, respectively. Varanasi and Raipur reported losses of Rs 1.6 crore and Rs 26.65 crore, respectively, which were significantly lower than the losses in 2020-21.

However, according to the latest reports, the Directorate General of Civil Aviation (DGCA) recently said that Domestic flight traffic increased by 61 per cent in July, with about 50.07 lakh people taking to the skies, while in June, the figure was 31.13 lakh.

With immediate effect, the aviation ministry boosted flying capacity to 72.5 per cent from 65 per cent. Flight services were suspended following the statewide lockdown enforced in March of last year due to Covid-19, only to be restarted on 25 May of the same year. It had been functioning at 50 per cent capacity since then and only last month was it upgraded to 65 per cent.

Regional routes and airports were reporting quicker growth in passenger traffic than established routes before the emergence of Covid-19. It was also said that regional routes from Ranchi, Surat, Vijayawada, Bhubaneswar and Varanasi have grown quicker than established routes from Delhi, Mumbai, Chennai and Bengaluru, according to data from 2018-19 and 2019-20.