Airports In India: Who Owns The Runways?

Airport ownership varies across the world. In India, the state-owned Airports Authority of India (AAI) runs airports, although some are leased to private corporations. For example, the GMR Group operates the Indira Gandhi International Airport and the Rajiv Gandhi International Airport through joint ventures. The Adani Group operates several airports through a public-private partnership, and the Bengaluru International Airport is controlled by Fairfax.

Airports Authority of India (AAI)

The Airports Authority of India (AAI) is a statutory body under the ownership of the Ministry of Civil Aviation, Government of India. It is responsible for creating, upgrading, maintaining, and managing civil aviation infrastructure in India. The AAI manages a total of 137 airports, including 34 international airports, 10 customs airports, 81 domestic airports, and 23 civil enclaves at defense airfields. The AAI also has ground installations at all airports and 25 other locations to ensure aircraft operations safety.

The AAI provides Communication Navigation Surveillance/Air Traffic Management (CNS/ATM) services over the Indian airspace and adjoining oceanic areas. It covers all major air routes over the Indian landmass via 29 Radar installations at 11 locations and 700 VOR/DVOR installations co-located with Distance Measuring Equipment (DME). 52 runways are equipped with Instrument Landing System (ILS) installations and Night Landing Facilities, and an Automatic Message Switching System is in place at 15 airports.

The history of the AAI can be traced back to the formation of the International Airports Authority of India (IAAI) in 1972 to manage the country's international airports. In 1986, the National Airports Authority of India (NAAI) was established to oversee domestic airports. In April 1995, the two organizations were merged by an Act of Parliament, the Airports Authority of India Act, 1994, creating the current AAI.

The AAI board consists of a chairman and five whole-time members appointed by the central government. The Director-General of Civil Aviation is an ex-officio member of the AAI board, which also includes part-time members. The AAI is divided into five administrative regions, each headed by a Regional Executive Director (RED), with its corporate headquarters in New Delhi.

The AAI has five training establishments, including the Civil Aviation Training College (CATC) in Prayagraj, the Hyderabad Training Center (HTC) in Hyderabad, and the National Institute of Aviation Training and Management (NIATAM) in Gondia. It also operates three ATS training organizations and two Fire Training Centers (FTC) in Delhi and Kolkata.

The AAI plays a crucial role in ensuring safe and efficient airport operations in India, contributing significantly to the country's aviation industry and connectivity.

Netaji Subhas Chandra Bose International Airport

In India, most airports are owned by local, regional, or national government bodies, which then lease the airport to private corporations that oversee the airport's operation. For example, the Indira Gandhi International Airport and Rajiv Gandhi International Airport are operated by the GMR Group through joint ventures. The Airports Authority of India owns and operates the rest of the country's airports.

One of these airports is the Netaji Subhas Chandra Bose International Airport, which serves the city of Kolkata and the surrounding metropolitan area. It is the primary aviation hub for eastern and northeastern India and is located about 15 km (9.3 mi) from the city centre. The airport is also known as Kolkata Airport and was called Dum Dum Airport before being renamed in 1995 after Subhas Chandra Bose, a prominent leader of the Indian independence movement.

The airport was founded in the early 1900s as the Calcutta Aerodrome and is one of the oldest airports in India, having opened in 1924. It is spread over an area of 6.64 square kilometres (2.56 sq mi) and is the largest hub for air traffic in eastern India. It is one of four operational airports in West Bengal, along with Bagdogra International Airport in Siliguri, Cooch Behar Airport, and Kazi Nazrul Islam Airport in Durgapur.

The Netaji Subhas Chandra Bose International Airport has two runways, with the primary runway capable of handling approximately 35 flights per hour and the secondary runway capable of handling 15 flights per hour. The airport has two terminals, with the new integrated Terminal 2 handling both international and domestic destinations. Terminal 2 is an L-shaped structure with six levels, 128 check-in counters, 78 immigration counters, and twelve customs counters. It can accommodate 25 million passengers annually, compared to the previous Terminal 1's capacity of five million.

The airport is a major centre for flights to Northeast India, Bangladesh, Bhutan, Southeast Asia, and Middle Eastern cities like Dubai, Doha, and Abu Dhabi. In the 2023-24 financial year, the airport handled around 20 million passengers, making it the sixth-busiest airport in India in terms of passenger traffic.

The airport has seen several phases of expansion and modernisation to accommodate growing passenger numbers. The most recent expansion included the construction of Terminal 2 and runway expansion, with Phase 2 of the Kolkata Airport expansion plan currently underway.

Privatisation of airports

India's airport privatisation process began in September 2003 under the rule of the National Democratic Alliance government, led by Prime Minister Atal Bihari Vajpayee. The first airports to be privatised were Delhi and Mumbai, the two largest in the country.

The privatisation of airports in India is based on the public-private partnership (PPP) model. In the joint venture (JV) set up for this purpose, the Airports Authority of India (AAI) holds 26% of the stake, while the remaining 74% is held by a private company selected through a competitive bidding process.

The privatisation of Delhi and Mumbai airports has been successful, with a high rate of growth in passenger traffic. Subsequently, new Greenfield airports were developed in the private sector in Bengaluru and Hyderabad, which have also registered impressive growth in passenger traffic.

The Indian civil aviation sector is on a growth trajectory and is moving towards becoming the third-largest globally by 2025. To cope with the rapid growth in passenger traffic and the need for enhanced connectivity under the Regional Connectivity Scheme, the government has initiated a massive project to upgrade existing airports and build new ones. This will entail a total expenditure of about 2 trillion over the next ten years, with the government expecting the bulk of the investment to come from the private sector.

The government is keen to privatise 15 profitable airports operated by the AAI. However, efforts to privatise airports after Delhi, Mumbai, Bengaluru, and Hyderabad have stalled due to various reasons, including a lack of a clear vision from the government and concerns about the AAI's overwhelming control despite holding a minority stake.

In 2018, the government proposed to privatise airports in Lucknow, Ahmedabad, Chennai, Jaipur, Kolkata, Guwahati, and Pune. In February 2025, the AAI declared that a company owned by Gautam Adani had won the bids to upgrade and operate six airports in Ahmedabad, Jaipur, Thiruvananthapuram, Lucknow, Mangalore, and Guwahati.

As part of its National Monetisation Pipeline (NMP), the government has also earmarked 25 AAI airports for leasing out between 2022 and 2025. These include airports in Bhubaneswar, Varanasi, Amritsar, Trichy, Indore, Raipur, Calicut, Coimbatore, Nagpur, Patna, Madurai, Surat, Ranchi, Jodhpur, Chennai, Vijayawada, Vadodara, Bhopal, Tirupati, Hubli, Imphal, Agartala, Udaipur, Dehradun, and Rajahmundry.

The government plans to lease out the airports to improve their management and infrastructure by utilising private sector efficiency and investment.

Airport operations

In India, most airports are run by the state-owned Airports Authority of India (AAI). However, some airports are operated by private players through public-private partnerships. For example, the Adani Group operates several international airports through a public-private partnership with the AAI, where they pay a predetermined sum based on the number of passengers handled by the airports. Other airports, such as Indira Gandhi International Airport and Rajiv Gandhi International Airport, are operated by private groups like the GMR Group through joint ventures.

The Netaji Subhas Chandra Bose International Airport in Kolkata has been the most profitable airport for the AAI for two consecutive years, recording profits of INR 482.3 crore. Chennai has seen a significant swing, going from the highest loss-making airport to the second-most profitable. Calicut, which is the only government-owned international airport in Kerala, occupies the third position. Pune and Goa (Dabolim) are civil enclaves at defence airfields, with the AAI only managing the terminal, yet they remain profitable due to high demand.

As more airports in India are privatised, the government's strategy has been to allow the AAI to invest in building new airports and invite bids from private players to operate the larger airports. This approach aims to ensure a steady revenue stream for the AAI through profit-sharing and other services while bringing in private sector efficiency.

Airport revenues

Aeronautical revenue is generated through airline rents, landing fees, passenger service fees, parking fees, and hangar fees. Landing fees are calculated based on the landing weight and size of the aircraft, with most airports charging a fixed rate and an additional fee for extra weight. Passenger service fees are charged per passenger for in-flight facilities such as food, water, Wi-Fi, and entertainment. Aircraft parking fees vary depending on the airport, with John F Kennedy Airport in New York City charging $45 per hour for a 100,000-pound plane.

Non-aeronautical revenue is gained from sources other than aircraft operations, including lease revenue from compatible land-use development, non-aeronautical building leases, retail and concession sales, rental car operations, parking, and in-airport advertising. Concession revenue, which includes duty-free shops, bookstores, restaurants, and money exchange, is a significant contributor to non-aeronautical revenue. Car parking is also an increasingly important source of revenue for airports.

Non-operating revenue, while a smaller portion of overall airport revenue, includes various income streams such as those from investments and the sale of assets.

The revenue of Indian airport operators is expected to increase by 15% to 17% in the 2024-25 financial year, according to the credit rating agency ICRA. This growth is attributed to several factors, including the improvement in domestic and international passenger traffic, an increase in tariffs at major airports, and a ramp-up in non-aeronautical revenues.

For example, the Indira Gandhi International Airport in Delhi, India, generated a gross revenue of 42.5 billion Indian rupees for the financial year 2023, an increase from the previous year. However, there was a drop in revenue in 2021 due to the impact of the coronavirus pandemic, which also affected airport passenger traffic across India.

Among the profitable airports in India, the Kempegowda International Airport in Bengaluru reported a profit of Rs 528.3 crore during 2022-2023, making it the country's most profitable airport. The Cochin airport secured the second position with a profit of Rs 267.1 crore, followed by Hyderabad with Rs 32.9 crore in profits.

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