Government to club ‘Unenviable’ Airports

In her budget address, finance minister Nirmala Sitharaman said that during 2021-22, the government would privatize airports run by AAI from tier II and III cities. In the third phase of the privatization of airports, the government is expected to launch the process of awarding 10 airports. The Indian Airports Authority (AAI) is investigating the prospect of selling loss-making airports along with a hugely profitable one. ET Now announced for the first time in December 2020 that tentative talks on clubbing loss-making airports with profitable ones and marketing them as a basket under the proposed privatization scheme are on the cards.

“AAI is looking at providing non-profitable airports and profit-making airports as a package. We could see six to ten airports being taken over,” said Pradeep Kharola, Secretary of the Ministry of Civil Aviation on Thursday. Also, AAI has already accepted the plan of the Adani Group to take over Mumbai airport, Agarwal said.

The Gautam Adani-led consortium entered into a binding deal in September 2020 to acquire GVK Airport Developers Ltd’s debt, against which a 50.5 percent interest in Mumbai International Airport Ltd (MIAL) was pledged. The Adani Group has announced that it will acquire the joint 23.5 percent stake owned by Airport Co. of South Africa and the South African Bidvest Group in MIAL.

Air India’s divestment process is on schedule as well, Kharola said. “The deal adviser has obtained from the bidders’ expressions of interest. The deal advisor will now pursue the eligible bidders’ financial offers, he added.

The tax incentives for aircraft leasing firms to set up shop in the Gift City of Gujarat would help Indian airlines save foreign exchange costs when leasing aircraft, Kharola said.

The price limit on non-domestic flight tickets is not going to be a permanent thing, he added, adding that it will be done away with until the number of flyers rises to pre-covid levels. The government launched fare bands to make it cheaper for travelers as domestic flights resumed on 25 May after two months. The fare band is in effect until 31 March.

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