New privatization model to help airports take off

By Ashish Suman and Kartikeya GS, J. Sagar Associates

Airports are set to be the stage for one of India’s largest infrastructure development and expansion initiatives. This comes on the back of a dramatic rise in passenger traffic, which has been witnessing double-digit growths for record periods and is set to grow three-fold by 2037. Notably, a good part of the growth is being driven by tier-II cities. The causes of this upswing in traffic are manifold:

  • India’s fast-growing population, which is estimated to reach 1.7 billion by 2050, is projected to become the largest in the world. The United Nations estimates that over half of the total population in India will be living in urban areas by 2050.
  • Rising incomes mean that a larger share of the population has access to the aviation market. By 2036, India’s per capita income is expected to increase five-fold compared to 2006 levels, and middle-class households are set to constitute 20% of all households.
  • The steep decline in airfares and an increase in the number of airlines have lowered the gap between air and rail fares.

In the coming years, it is estimated that India may have around 190-200 operational airports – the top 31 cities may have two airports and New Delhi and Mumbai are expected to have three each. This would require a capital investment of around US$40-50 billion. Many of these airports – greenfield or brownfield developments– will be done through private involvement in their development and/or operation and maintenance.

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Ashish Suman is a partner and Kartikeya GS is a principal associate with J. Sagar Associates. Their views are personal.


J. Sagar Associates
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Contact details
Ashish Suman | Tel: +91 12 4439 0798
Kartikeya GS | Tel: +91 12 4439 0697