Centre plans to privatise 11 airports in five bundles

India's central government is moving forward with a plan to privatize 11 of its airports, consolidating them into five distinct bundles. This strategic grouping is designed to create a sustainable model for smaller, less profitable airports by cross-subsidizing them with the revenues generated by larger, busier hubs.

The Public Private Partnership Appraisal Committee (PPPAC) has given its in-principle approval to the civil aviation ministry's proposal. The committee, which reviews Central sector PPP projects exceeding ₹250 crore, met on August 4 to discuss the bundling strategy. The minutes from the meeting indicate that the goal is to develop world-class airport infrastructure through private investment.

This initiative follows a similar privatization drive in 2018-19, where six airports operated by the Airports Authority of India were privatized under the Public Private Partnership model. Notably, the Adani Group emerged as the sole bidder, acquiring all six airports: Ahmedabad, Lucknow, Mangaluru, Jaipur, Thiruvananthapuram, and Guwahati.

To mitigate risks associated with market concentration and potential over-leveraging, the aviation ministry has proposed capping the number of airport bundles a single bidder can acquire. The specific details of this cap are still being finalized. Furthermore, the ministry suggested allowing bidders with relevant cross-sectoral infrastructure experience, not limited to the aviation sector, to participate in the bidding process.