Aviation Infrastructure In India: Overhaul Strategy Is What Centre Must Do

In 2016, India witnessed 23% growth in domestic air travel demand, the highest in the world. From 131 million in 2016, the total passenger traffic at airports is expected to reach 378 million by 2026. As a result, six cities with metro airports will require additional capacity in the next 5-7 years. Around 25 of the 126 airports operated by the Airports Authority of India (AAI) have reached saturation point, particularly tier-II airports. To match the rising demand, India would need to triple its airport capacity over the next decade, requiring an estimated capital expenditure of Rs 2.4 lakh crore.

Over the past decade, the government has collaborated with the private sector, and delivered positive results. The four major airports (Delhi, Mumbai, Bengaluru and Hyderabad) which were transitioned to the PPP model have gained global recognition for their standards. However, the government’s recent privatisation plans have not taken-off as desired. It had invited bids for the privatisation of four major airports in 2014 after coming to power, but had to scrap the plan within a year due to aggressive deadlines and several breaches. Though it went ahead with the O&M privatisation of Ahmedabad and Jaipur airports, the contracts have not been awarded to date. Read More…

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