AAI will diversify into airport management services when major airports pass into private hands.

In order to ring fence its future revenues, state-owned airport operator Airport Authority of India is planning to provide airport management services. The diversification has become necessary as the government is planning to lease top 25 of AAI-owned airports to private companies.

Management services of the airport includes handling of operation of the airport including air side, terminal operations and other services like parking, food and beverage outlets. AAI will also provide air traffic management and navigation services to the airports. Senior government officials said that had become necessary for diversification of revenue and maintaining a steady pool of workforce who are trained in airport operation.

As part of that AAI has signed an operation and management contract with Uttar Pradesh government for operating of five state-government owned airports- Aligarh, Azamgarh, Chitrakoot, Muirpur & Shravasti for 30 years. AAI has also signed similar agreements with Steel Authority of India (SAIL) for operating Rourkela (Odisha), Bokaro (Jharkhand) and Burnpur inWest Bengal.

Presently, these airports owned by SAIL handle non-scheduled flights operation for SAIL aircraft or VIP movement. With AAI’s management, these airports will be able to handle commercial operations.

“The state governments, PSU giants and many corporate houses own multiple airport strips which if managed well can have normal commercial flight operations. They are encouraged to tie up with AAI for this, AAI has expertise and human resource to manage such operations. Hence this can prove to be a new revenue source,” a government official said. He added that the authority is in similar discussions with the Karnataka government for Shivamogga airport which has built a new terminal to start commercial operations.

While Delhi, Mumbai, Bengaluru and Hyderabad airport were privatized earlier, last year, the government leased out six more top airports to the Adani group. Under the National monetisation Pipeline, another 25 AAI airports have been earmarked for asset monetisation by 2025.

“Since the government has planned to privatize most of the large airports, it is necessary that AAI finds new areas and places to deploy its workforce. These are highly trained people and such scope of operations and management can be well handled by them,” the official said.

After privatisation of airports, AAI employees can either choose to be employed by the new owner on terms and conditions. According to the concession agreement signed with the Adani group during privatization of six airports at Lucknow, Ahmedabad (Gujarat), Mangaluru, Jaipur, Guwahati and Thiruvananthapuram, the employees up to the level of assistant general manager will continue to be posted at respective airport for three years. Subsequently, employees have the option to join the Adani group or to return to AAI.

“Most employees return to AAI and it becomes difficult for the PSU to redeploy them,” the official quoted above said.