Centre Receives In-Principle Approval to Lease 11 AAI Airports in Five Bundles

The Centre has moved forward with its plan to introduce private-sector participation in the operations, management, and development of regional aviation infrastructure. Following extensive inter-ministerial consultations, the Public Private Partnership Appraisal Committee (PPPAC) has granted in-principle approval for leasing out 11 Airports Authority of India (AAI) airports.

According to official documents reviewed from the process, the approval was granted during the 149th meeting of the PPPAC held on August 4. The plan groups the 11 locations into five distinct bundles: Amritsar-Kangra, Varanasi-Gaya-Kushinagar, Bhubaneswar-Hubballi, Raipur-Aurangabad, and Tiruchirappalli-Tirupati.

This structuring follows months of examination by the government regarding the viability of pairing larger facilities with smaller ones. The model is designed to improve the long-term sustainability of smaller airports through cross-subsidisation from larger facilities within the same bundle.

The proposed concessions will cover the operations, management, and development of these locations over a 50-year period. AAI will serve as the sponsoring and implementing agency for all transactions.

With the in-principle approval now secured, the Ministry of Civil Aviation (MoCA) plans to initiate a market-sounding exercise. Infrastructure players and potential private-sector participants will be engaged to assess investor interest in the transaction structure. Because the bundling model is being attempted for the first time, feedback from the market will be evaluated before modifications are made and the proposal is submitted back to the PPPAC for final recommendation.

Previous leasing rounds by the union government include the 2019 initiative where six AAI airports—Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram—were awarded under 50-year public-private partnership concessions, with all facilities handed over to private operators by October 2021.

The current initiative aims to bring both private-sector capital and operational expertise into airport development while establishing a structural mechanism to support the financial viability of smaller regional facilities.

"The decision by the Public Private Partnership Appraisal Committee to bundle larger and smaller airports together represents a strategic structural shift in how regional infrastructure is managed. For private infrastructure players and investors, pairing established hubs with emerging regional facilities under a 50-year concession provides a unique risk-mitigation framework. By leveraging cross-subsidisation, the government is attempting to solve the long-term viability challenge of smaller airports while opening up structured capital deployment opportunities in the Indian aviation sector." — Dr. Shishir Gupta, Founder & CEO, StartupLanes