Passenger Terminal Today
  • News
    • A-C
      • Accessibility
      • Baggage
      • Biometrics
      • Boarding
      • Check in
      • Construction & Architecture
      • Covid-19
      • CSR
    • D-L
      • Displays & Signage
      • Expo
      • Food & Beverage
      • Ground Support
      • IT & Software
      • Lighting
      • Lounge
    • M-R
      • Operations
      • Parking
      • Passenger Experience
      • Personnel
      • Regulation & Policy
      • Retail
    • S-Z
      • Seating
      • Security
      • Self-service
      • Sustainability
      • Technology
      • Terminal
      • Wayfinding
      • Webinars
  • Opinion
  • Features
  • Online Magazines
    • June 2025
    • April 2025
    • Showcase 2024
    • September 2023
    • June 2023
    • April 2023
    • January 2023
    • Archive Issues
    • Subscribe Free
  • Videos
  • Webinars
  • Supplier Spotlight
  • Events
LinkedIn Facebook Twitter
  • Sign-up for Free Weekly E-Newsletter
  • Meet the Editors
  • Contact Us
  • Media Pack
LinkedIn Facebook
Subscribe
Passenger Terminal Today
  • News
      • Accessibility
      • Baggage
      • Biometrics
      • Boarding
      • Check in
      • Construction & Architecture
      • Covid-19
      • CSR
      • Displays & Signage
      • Expo
      • Food & Beverage
      • Ground Support
      • IT & Software
      • Lighting
      • Lounge
      • Operations
      • Parking
      • Passenger Experience
      • Personnel
      • Regulation & Policy
      • Retail
      • Seating
      • Security
      • Self-service
      • Sustainability
      • Technology
      • Terminal
      • Wayfinding
      • Webinars
  • Opinion
  • Features
  • Online Magazines
    1. June 2025
    2. April 2025
    3. January 2025
    4. Showcase 2025
    5. September 2024
    6. June 2024
    7. Subscribe Free
    Featured
    July 11, 2025

    June 2025 issue is now available online!

    Online Magazines By Anthony James
    Recent

    June 2025 issue is now available online!

    July 11, 2025

    April 2025 issue is now available online!

    April 2, 2025

    January 2025 issue is now available online!

    December 11, 2024
  • Videos
  • Webinars
  • Supplier Spotlight
  • Events
LinkedIn Facebook
Subscribe
Passenger Terminal Today
Features

Executive indecision

Kirstie PickeringBy Kirstie PickeringMarch 5, 201610 Mins Read

India’s aviation industry is one of the fastest growing in the world and, according to research from Centre for Aviation (CAPA), is set to experience growth of 8-10% in international traffic and 15% in domestic traffic in 2016. In the past decade annual passenger numbers have grown in the country from 69 million in 2004-2005 to 188 million in 2014-2015.

To help cope with this growth, national airport operator Airports Authority of India (AAI) last year inaugurated a newly built airport in Kadapa, opened terminals at Chandigarh International and Tirupati airports, and began constructing a terminal at Vijayawada Airport. Alongside this, AAI announced collaborations with IATA and ICAO for the training of more than 4,000 airport officials.

Despite these investments, several independent experts from India’s aviation sector argue that such projects barely plug the holes left by an industry bursting at its seams. They claim that airport privatization is the country’s best solution to meeting future capacity requirements.

“I don’t think the Indian government should be in the business of operating airports because of the way the system operates,” says Satyaki Raghunath, head of masterplanning for Dubai Airports and an industry consultant (Raghunath previously led the Asian business of consulting firm LeighFisher. In this role he managed more than 40 consulting assignments across major Indian airports). He continues, “That isn’t a criticism of the government or the AAI, it’s just that the system doesn’t allow them to provide the benefits that the private sector can in terms of improving the passenger experience, operational efficiency and delivering the capital infrastructure in a way that is required for the 21st century.”

Nevertheless, the Indian government made the decision last year to withdraw Chennai and Kolkata airports from its proposed privatization list, much to the despair of those pushing for new public-private partnerships (PPPs).

In further support of privatization, a recent report released by the Indian government’s own Ministry of Finance even highlighted the need to push on with PPP arrangements.

In this report, Dr Vijay Kelkar, chairman for the Committee on Revisiting and Revitalizing the PPP Model of Infrastructure Development, wrote, “The volume of passenger traffic has almost trebled in the past 10 years and independent reports predict a similar increase in the coming decade or two, with most metropolitan airports fast crossing their existing capacities and requiring new facilities. The necessary growth cannot be achieved with conventional procurement options and there is a need to selectively utilize PPP frameworks in airport development.”

Right: GVK opened the International Terminal at Mumbai Airport in February 2014

The PPP model in India

AAI, which declined to comment on this article or on the further privatization of airports in India, is responsible for 125 airports in India, making it one of the largest operators in the world. It became involved in PPP agreements in 1993 due to a lack of funding for the construction of Cochin Airport in the state of Kerala. The AAI (then called the National Airports Authority) agreed to provide technical support but permitted V J Kurian, the founding managing director of Cochin, to pursue his vision of constructing the airport using funding from airport non-resident Indians, airport service providers and the government. This model proved to be an extremely successful way of developing the airport.

Today India has five privatized airports. After Cochin, PPP projects were authorized at Kempegowda International in Bengaluru, Bangalore and Rajiv Gandhi International, Hyderabad, which were concessioned in 2004 to majority ownership by Indian engineering firms GVK and GMR respectively. Chhatrapati Shivaji International in Mumbai and Indira Gandhi International in New Delhi were later concessioned in 2006 and were again majority-owned by a consortium led by GVK and GMR respectively.

Critically in these PPP arrangements, the government retains at least 26% of ownership in the airports, which according to Indian law allows it to veto certain major decisions and prevents the majority shareholders from making any major changes to the companies’ constitutions. It also reassures the public that the state’s most valuable assets are not being auctioned off completely. In fact the PPP agreements are only ever temporary, with the concessions lasting for 30 years with the option to renew for another 30.

Left: A second runway and terminal at Hyderabad would boost capacity from 12 million annual passengers to 40 million

Outside influences

The involvement of foreign airport operators

has been key to the success of India’s PPP arrangements. Operators such as Zurich Airport, Siemens Project Ventures, Malaysia Airports Holding Berhad (MAHB), Fraport and Airports Company South Africa (ACSA), have worked alongside GVK and GMR and helped them to adopt a new way of thinking regarding airport operations and passenger requirements.

“Foreign operators have had two levels of impact,” says Sikander Jain, managing director, India, for consultancy firm CH2M. “When GMR and GVK came on the scene, they had no experience of airports. Having the foreign operators on board helped the management to gain credibility and confidence in day-to-day operations. For example in Mumbai Airport, ACSA came in with money to become a stakeholder and now they have a turnover that is amazing compared with what they put in. GMR and GVK no longer need foreign investors to help them run an airport; however, there are other Indian companies coming into the fray, so partnering with a company like Fraport or Zurich still makes sense.”

Privatization success

Prior to privatization, approximately 85% of India’s aviation traffic was concentrated at Mumbai and New Delhi airports, due to a lack of focus and investment elsewhere in the country. Post-privatization, the two airports now serve closer to 35-40%, with a more even distribution throughout the rest of the airport system.

“The improvement in the five PPP airports means that Indians now expect world-class infrastructure as a matter of right, rather than thinking of it as the exception to the rule,” says Raghunath. “Indian carriers, as well as foreign carriers, have benefitted because privatization has reduced capacity pressure.

“This has also had a major boost in terms of improving point-to-point services across the country and making Tier 2 cities that are at the forefront of economic growth in India part of the wider aviation system.”

Right: Indira Gandhi International in Delhi is India’s largest airport and is capable of handling up to 62 million passengers annually

From a financial perspective, the government’s PPP concession agreements have generated enough capital to fund improvement works at state-owned airports throughout the country, including Chennai and Kolkata. While Bengaluru and Hyderabad contribute revenue shares of around 4%, Mumbai and Delhi have gone on to produce revenue shares of 38.7% and 45.99% respectively. On the other hand, it has also been reported that in 2014-2015, 96 of AAI’s state-owned airports suffered a combined loss of R12bn (US$176m).

“The revenue shares being generated by the five private airports is remarkable given that AAI owns around 120 airports,” says Jain. “The decision to privatize was excellent because it infused great amounts of money into AAI, which could then carry out its own agenda for other airports that are underserved and underused, and in a way will pump money from the rich to the poor.”

Impact on the economy

The success of privatization on the Indian economy has been twofold. First, the privatized airports themselves have seen vast improvements in terms of the passenger experience and commercial opportunities, which has created immediate jobs through expansion and encouraged spending from visitors. Second, the expanded services have trickled down to the airlines, enabling them to provide more routes, which in turn brings more passengers.

“Investment in infrastructure and facilities has directly resulted in economic growth for the entire region,” says Panagiotis Poligenis, associate partner for Asia/Pacific, Lufthansa Consulting. “The private airports are achieving strong revenue growth due to a combination of increased traffic, higher aeronautical charges and the development of non-aeronautical revenues leading to increased job opportunities, as well as dividends for the government. However, the financial impact of the aviation sector in India is, in my opinion, underestimated and the regulator has to accelerate policy and regulation making in order to increase the possibilities for economic growth throughout the sector.”

Left: CIAL is developing a new International Terminal at Cochin that will be capable of handling 12 million passengers annually

What next?

The privatization of Kolkata and Chennai airports has been mooted for many years, but now appears unlikely. More likely will be the construction of greenfield airports in Navi Mumbai and Goa, built with funding from PPP agreements. Elsewhere, reports have linked Changi Airport Group (CAG) with some form of PPP agreement for Ahmedabad and Jaipur airports. The reports surfaced in December 2015 following a visit to Singapore by Indian Prime Minister Narendra Modi, where a memorandum of understanding was signed between the two parties. In other news, the Indian Ministry of Civil Aviation has approved the construction of four greenfield airports, three in the state of Andhra Pradesh and one in Gujarat. Two have been earmarked as PPP projects. However, despite all this activity there remains an air of pessimism.

“It is difficult to foresee the prioritization of projects now that the PPP list has been revised and Kolkata and Chennai have been pulled,” says Poligenis. “In addition, ongoing tender processes such as Navi Mumbai or Goa Mopa are being delayed. According to the officials, a decision will be taken by mid-2016. No doubt we will see much privatization activity in India, but it is tough to predict the next steps of the agenda.”

One positive for the development of the Indian aviation sector is that terminal expansion works, additional runways and other improvement works are plentiful and have been going ahead at state-owned airports. Equally, private sector airports have a number of improvement works scheduled for the future, most notably the construction of a second runway and terminal at Bengaluru International Airport. Additional solar capabilities are also being planned for Cochin, which is already India’s first energy-neutral airport. But despite these ongoing improvements, and the improved state of the aviation sector in general, many feel that privatization is the only way to relieve the stranglehold on the country’s transport infrastructure.

Right: Mumbai Airport’s new Terminal 2 missed several completion deadlines and took seven years to build

“It’s almost as if making money is a bad thing,” says Jain. “The government mindset is more socialist than capitalist, so making money is not necessarily a good thing for them. AAI is happy to do things from a passenger service/provision point of view, but it’s not necessarily the same as increasing revenue.”

The overall opinion seems to be that for anything to change there has to be a major change in mentality and a collective agreement to embrace the potential of privatization.

As part of its final analysis, the Ministry of Finance’s report into the PPP setup in the country states: “The success of deploying PPP as an additional policy instrument for creating infrastructure in India will depend on the change in attitudes and mindsets of all the authorities including public agencies partnering the private sector, government departments supervizing the PPPs, and auditing and legislative institutions providing oversight of the PPPs.”

This sentiment is echoed by Raghunath, who concludes, “I think the fundamental point is that the government and the private sector have to work closely together with a single agenda – not to constrain or inhibit the growth of the aviation sector. If growth is the driver, then privatization and other enabling mechanisms will naturally happen.” 

Article by Dan Symonds originally published in the March issue of Passenger Terminal World

March 9, 2016

Share. Twitter LinkedIn Facebook Email
Previous ArticleCasino and leisure resort to be built at Incheon International
Next Article No1 Lounges expands offering at London Gatwick’s South Terminal

Related Posts

Features

TSA’s new shoe policy – what’s behind the change?

July 10, 20252 Mins Read
Features

EXCLUSIVE FEATURE: How digital identity credentials are creating a new era of air travel

May 7, 20257 Mins Read
Features

EXCLUSIVE FEATURE: How effective are today’s approaches to neurodivergent airport passengers?

April 22, 202512 Mins Read
Latest News

Munich AirportAcademy partners with University of Colorado Denver

July 14, 2025

Ecuador deploys Regula document verification technology

July 14, 2025

Cambodia Airports to operate Techo Airport

July 11, 2025

Receive breaking stories and features in your inbox each week, for free


Enter your email address:


Our Social Channels
  • Facebook
  • LinkedIn
Getting in Touch
  • Sign-up for Free Weekly E-Newsletter
  • Meet the Editors
  • Contact Us
  • Media Pack
© 2025 UKi Media & Events a division of UKIP Media & Events Ltd
  • Terms and Conditions
  • Privacy Policy
  • Cookie Policy
  • Notice & Takedown Policy

Type above and press Enter to search. Press Esc to cancel.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.

CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Functional

Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.

Advertisement

Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.

Others

Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.

SAVE & ACCEPT