Tirupati Airport Privatisation Planned Under 50-Year PPP Plan

The Tirupati airport is proposed to be brought under private management under a 50-year public-private partnership (PPP) agreement. This is part of the Centre’s plan to lease 11 such facilities under the Airports Authority of India (AAI).

The airport would be tied with the Tiruchirappalli international airport, with a single private concessionaire proposed to handle their operations, management and development. The PPP appraisal committee has given in-principle approval to the civil aviation ministry’s proposal.

Tirupati airport handled 9.96 lakh passengers and recorded 12,043 aircraft movements in 2024-25, according to AAI traffic data.

Tirupati and Tiruchirappalli are among five airports proposed under the plan. The other airports are of Amritsar and Kangra-Gaggal; Varanasi, Gaya and Kushinagar; Bhubaneswar and Hubballi; and Raipur and Aurangabad. The proposal combines five major airports with six smaller airports.

The proposed concession period for all 11 airports is 50 years. Private operators are expected to invest a total of `8,622 crore, though no separate investment has been specified for the Tirupati-Tiruchirappalli bundle.

The government proposed a cap on the number of ‘bundles’ that can be awarded to a single bidder to prevent excessive concentration of airport assets and reduce risks arising from over-leveraging.

The proposal also provides for the transition of existing AAI employees. A one-year joint management period has been proposed after the airports are handed over to private operators. The concessionaire would then be required to retain 60 per cent of AAI employees for up to three years.

AAI selected the airports through a phased assessment. It initially examined 12 major airports based on passenger traffic, land availability, commercial potential, financial performance and airport-specific factors, with six recommended for leasing. It subsequently assessed 136 smaller airports for possible bundling, considering traffic potential, capital expenditure needs, geographical proximity, development potential and financial viability.

After assessing different combinations, the AAI board approved the proposal to bundle five major airports with six smaller airports at its meeting on May 23, 2022.

The PPPAC approval is only in principle. No private operator has been selected for the Tirupati airport concession. The government had earlier awarded six AAI airports under the PPP model in 2018-19.