NEW DELHI: The Airports Authority of India’s (AAI) profitability is increasingly being driven by a small set of privatized airports, even as most of the airports it runs continue to make losses, raising questions about the sustainability of its earnings as more assets are slated for privatization.
Income from six airports operated under public-private partnership (PPP) agreements accounted for more than 30% of AAI’s net profit in the year ended March 2025, according to its annual report released in February.
At the same time, the bulk of its own network remains under strain. An estimated 91, or about 75%, of the 122 airports owned by AAI reported losses of ₹1,600 crore, while the remaining 31 airports earned a profit of ₹2,740 crore.
AAI reported total revenue of ₹20,648 crore and a net profit of ₹7,233 crore for FY25. Its revenue is about double that of ₹10,836 crore reported by GMR Airports Ltd and ₹10,224 crore by Adani Airports Ltd for the period.
However, a significant portion of AAI’s earnings came not from its own airport operations but from payments linked to assets it has already leased out.
PPP surge
AAI received ₹2,232 crore from six PPP airports–Ahmedabad, Jaipur, Lucknow, Mangaluru, Guwahati and Thiruvananthapuram–all operated by Adani Airports. These payments are classified as “under-recovery”, or compensation paid by private operators for investments AAI had made before the airports were leased out. Part of this amount includes a one-time payment, and is not expected to recur.
The under-recovery income jumped about 150% from the previous year, contributing more than 10% of AAI’s total revenue and over 30% of its net profit.
In contrast, older privatized airports such as Indira Gandhi International Airport and Chhatrapati Shivaji Maharaj International Airport saw only about a 5% rise in annual fees paid to AAI.
AAI owns and operates 122 airports, and also earns revenue from airports leased to private operators under PPP arrangements.
“AAI is effectively moving towards a landlord model as most of the airports run by it are in losses. However, lease rent and the PPP model are driving its topline and bottomline,” said Dipak Purwar, partner at Noida-based chartered accountancy firm, SDSA & Co.
A landlord model is one where AAI earns lease rentals and revenue share from private airport operators rather than running airports itself.
"The ₹2,232 crore it received as under-recovery including one-time payment from 6 of the PPP airports is contributing over 10% of the topline and over 30% of the profit. It is mentioned in the policy that payment towards regulatory asset base, a financial model used to calculate the value of infrastructure investments like airport terminal, and recovery up to commercial operation date will be recognized as revenue over the lease period," Purwar said.
Queries sent to AAI and the civil aviation ministry remained unanswered till press time.
Within AAI’s own network, profitability remains concentrated in a handful of airports. Kolkata Airport and Chennai Airport were the biggest contributors, generating profits of about ₹855 crore and ₹500 crore, respectively. Other profitable airports included Pune Airport, Patna Airport, Srinagar Airport and Bagdogra Airport.
Several others, including Kushinagar Airport, Rajkot Airport and Vijayawada Airport, continued to incur losses, while non-operational airports such as Shimla Airport and Vellore Airport added to maintenance costs.
Apart from PPP-linked income, AAI’s traditional revenue streams showed healthy growth. Air navigation services revenue rose 17% to ₹4,700 crore, airport service revenue increased nearly 30% to ₹5,482 crore, and non-aeronautical revenue grew 16% to ₹1,911 crore, driven by higher user development fees and commercial activity.
Even so, analysts say the growing reliance on PPP-related income underscores structural stress in AAI’s core operations.
“The majority of AAI’s operational network continues to show structural stress. As more airports are privatized, the authority will increasingly rely on such revenue streams to support its capital expenditure,” said Mark D. Martin, chief executive of Martin Consulting.
That dependence could deepen further. AAI is preparing to privatize 11 more airports, including profitable ones such as Amritsar, Varanasi, Bhubaneswar and Raipur, as well as seven loss-making airports including Tiruchirappalli, Kangra and Gaya.
