Building India: Infrastructure Economics
Privatising India's Airports
How India handed major airports to private operators through PPPs, what it changed for passengers and investment, and the concerns about concentration and charges.
Indian airports were once run almost entirely by the government’s Airports Authority of India. Since the mid-2000s, many major airports have moved to private operators under PPPs.
The first wave
In 2006, the Delhi and Mumbai airports were handed to private consortia (led by GMR and GVK respectively) under long-term concessions. Greenfield private airports were also built in Hyderabad and Bengaluru, opening in 2008.
Results included:
- New terminals and runways.
- Better passenger facilities.
- Large investments that the government couldn’t easily fund alone.
The second wave
In 2019 and 2020, the government leased six more airports, including Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mangaluru, to the Adani Group, which also took over Mumbai airport. Further airports have been bundled for privatisation, sometimes pairing profitable with smaller airports.
How airports earn money
- Aeronautical charges: landing fees, parking and passenger charges such as the user development fee.
- Non-aeronautical revenue: shops, restaurants, parking, advertising and real estate.
Aeronautical charges at major airports are regulated by the Airports Economic Regulatory Authority of India.
Concerns
- Concentration: one group controls several of India’s busiest airports.
- Higher charges: user development fees at some privatised airports rose, raising ticket prices.
- Monopoly power: airports face little competition locally, so regulation matters.
- Bidding: some bids were criticised for prioritising revenue over experience.
New airports
India’s number of operational airports has roughly doubled since 2014, partly due to the UDAN regional connectivity scheme. New airports such as Navi Mumbai and Noida (Jewar) are being built through PPPs.
A traveller who flew from Delhi's old terminal in 2005 and returns in 2025 finds a huge, modern airport with more gates and shops. Some of her ticket price goes toward airport charges that funded the upgrade.
Aeronautical charges at major airports are regulated, because airports have strong local monopoly power.
- Delhi and Mumbai airports were privatised in 2006; Hyderabad and Bengaluru opened as private airports in 2008.
- Six more airports were leased to the Adani Group in 2019-20.
- Airports earn from aeronautical charges and non-aeronautical revenue.
- Concentration and rising user charges are concerns.
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