Airport Privatization in India: Importance and Challenges
The airport infrastructural facilities in India are very poor, and it ranks low in infrastructural
availability in the world. All the major airports in the country face passenger traffic problem
due to lack of modern facilities. The Government of India failed to make further investment
in the airports due to fund constraints. Therefore, it has opted for Private-Public Participation
(PPP) to modernize the Indian airports. The Governments decision to privatize airports has
invited enormous criticisms from airport workers. While the supporters argue that
privatization is needed for better performance of countrys economy, the airport workers
argue that privatization is a dangerous decision for the self-reliant growth of civil aviation
industry in India.India is an emerging economy and has been showing better performance on
its Gross Domestic Product (GDP) since the last few years. The role of infrastructure is
essential to the economic growth of a country. In India, Infrastructural facilities are very poor
and the country has a low rank in infrastructure availability in the world. Airports are now
considered to be an important part of the transport infrastructure of the modern world and can
have greater impact on the urban structure and development. Airport infrastructure also
supports productive activities in the economy. Modern and full facility airports will help India
in her move towards becoming one of the most powerful economies in the world. Huge
investments are required to meet high growth in air travel demand. Major airports like
Mumbai and Delhi continue to face passenger traffic problems due to lack of modern
facilities. In 2007, Mumbai and Delhi airports handled 25.2 million and 23.3 million
passengers respectively. These airports ranked the worlds 55th and 61st busiest airports in
2006. In India, passenger traffic is expected to grow at over 15% in the next five years. It is
expected to cross 145 million passengers per annum by 2010. Passenger traffic in Delhi
airport was 16.0 million during 2005-06, while it was 17.7 million in Mumbai airport for the
same period. Therefore, the government has felt the need for the development of airport
infrastructure in the country. Thus, vision 2010 proposes to create infrastructure to handle 280
million passengers by 2010. However, the government and airport authorities are not able to
support more airport projects due to fund constraints. To strengthen the economic growth,
private participation is necessary for the development of infrastructure, especially in airports.
Hence the Government of India has opted for Private-Public Participation (PPP) in airport
development. Consequently, the Indian airport industry is going through big changes. The
government has constructed many regional airports through PPP.
Air transport is an essential part of life in the modern world. Therefore, the airport operator
should be more vigilant in providing modern facilities and services for growing air
passengers and airlines from time to time. Many Indian airports face serious infrastructure
constraints. Hence, it is inevitable to modernize the airports due to the increasing number of
passengers. New modes of funds are required for modernization. In India, the government
faces fund constraints and so privatization is an alternative choice for airport development.
Private participation helps the low income countries like India to make big investments in the
airports to meet its growing air travel demand. Besides, the government believes that
operation cost is very low under private management and they can efficiently manage the
risk. Low cost airports provide a profitable environment. Supporters of airport privatization
say that private management can provide good facilities and services for passengers at
airports. But left parties and airport employees argue that privatization will lead to job loss
and increase unemployment in the country. They also fear that security handling by private
management is not safe. Therefore, it is better to monitor and handle all the airports security
issues by the government. The government should evaluate the post-privatization
performance of the airports. It helps to discuss the benefits and risks of the privatization
experiences. This evaluation also helps to understand the behavior of privatized airports when
compared to the government-owned airports.[8]
