People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 40

October 05, 2003

 Privatisation of Airports



M K Pandhe


THE decision of the government of India to privatise the Delhi and Bombay airports has dangerous implications for the self-reliant growth of civil aviation industry in India. The minister of civil aviation claimed that these airports will be developed as world class international airports by giving them on lease for 30 years.


The government of India has already approached international airports operators, international financial investors in international investment banks and advisory firms as well as Indian big business housse to bid for taking over these airports. They will be allowed to earn profits for 30 years and then hand over the administration of these airports to the government of India. The total cost or modernising the airports is estimated at Rs 7,000 crore and hence the government is supposed to approach private parties to undertake the job.


The government of India claims that it can raise only Rs 2,000 crore. Instead of privatising the airports, if the government would have taken steps to stop conception in the customs department at the airports, it could easily have raised enough funds for modernising the two airports. However, the NDA government has no political will to take such a step. Moreover, a part of the ill-gotten wealth realised by the custom officials goes to the political bosses and bureaucrats who protect the custom officials.




 The Airport Authority of India, formed in 1995, has continuously improved its performance and every year it earned good profits. During 1995-96 its profit after tax was Rs 145.16 crore, which went up to Rs 266.98 crore during 2001-02. It should be noted here that the central government invested only Rs 388.79 crore in the Airport Authority of India.

The accounts of the Airport Authority show that during 2001-02 is earned a revenue of Rs 2,244.84 crore while the total expenditure was Rs 1,767.86 crore. Thus the operating profit was Rs 476.98 crore, i e more than what the government had invested in this public sector undertaking. As on April 1, 2002, the company has accumulated Rs 2,023.49 crore as reserves and surplus.

Indian airports are handling the movement of 7 lakh aircraft every year and the traffic is increasing at the rate of 10 per cent per year. They also handle the traffic of over 5 crore passengers and 12 lakh tonnes of cargo every year. Passenger traffic is growing at the rate of 7 per cent every year while cargo traffic moves up by 16 per cent.


With such a remarkable performance of the undertaking, the step to privatise was a suicidal step on part of the government. This is meant only to help the foreign investments to use the infrastructure built by the company over a period of years to earn profit by multinational corporations (MNCs) for 30 long years. The MNCs will earn profits several times more than what they would invest in modernising these two metro airports.


The Airport Authority is today managing 46 operational airports. A major part of its profits come from the operation of metro airports while Delhi and Mumbai are the largest profits centres of this undertaking. If the metro airports are handed over to private parties, the Airport Authority would be a loss making undertaking since the traffic in other airports is not enough to make it a profit making venture.


The game of the government of India is clear. Hand over the lucrative airports to MNCs or foreign airport operators and thus make the Airport Authority a sick undertaking. This would enable the government to sell the smaller airports to Indian capitalists so that ultimately the entire airport administration is handed over to the private sector in a phased manner.


The government appointed M/s KPMG, as financial consultancy firm, to give effect to its privatisation drive while T R Kesharvam has been appointed as privatisation advisor to expedite the job of privatising these airports.




All the movements of Indian Air Force are through Indian airports and are controlled by the control tower erected in every airport. If the administration of airports is handed over to foreign companies, they will have access to all information regarding the movement of our Air Force aircraft. Foreign secret services are likely to use the private sector management to get access to all information concerning the activities of over Air Force.


The matter will be extremely serious in times of war when the movement of Indian Air Force will be known to the foreign management and that may provide information to enemy about all the movements of our Air Force aeroplanes. Thus it is extremely risky to allow foreign management of our airport in times of emergency.


Most of the countries in the world do not allow ownership of their airports to foreign companies due to the security risks involved in it. However, the NDA government is totally unconcerned about the involvement of unscrupulous foreign companies who are being made strategic partners owing our airports.


The privatisation of airports is thus against the interests of the country and the proposal of the government has to be resolutely opposed by all who have concern for protecting the national interests.




Over 20,000 employees working in the Airport Authority, led by the Airport Authorities Employees Union (a recognised union elected through secret ballot) resolutely opposed the policy of the government and gave a call for countrywide movement to resist the privatisation of airports. M K Ghosal and Santhanam, respectively the general secretary and president of the union, called upon all the employees to organise protest demonstrations at all the airports. Employees also moved to organise relay hunger strikes throughout the country, culminating in mass casual leave on September 26. At a later stage the officers association in the airports also decided to join the agitation and programme of mass casual leave.


In the beginning, the ministry of civil aviation decided to face the strike with the help of police and Central Industrial Security Force (CISF). However, seeing the complete unity of the employees and officers and the possibility of complete paralysation of all the airports, it called the union representative for talks. During the discussion, the union leaders pointed out that Indian airports could be modernised without privatisation. After a prolonged discussion, the minister of civil aviation had to appoint a committee, including the union representatives, to examine the question of privatisation and summit a report, pending which there would be no more towards privatisation. The report of the committee will be placed before the government for consideration.


Though the government of India has not given up the policy of privatisation of airports, it was forced to defer the decision for some months in the wake of united opposition by all the employees and officers. The union representatives agreed to postpone the programme of mass casual leave.


However, the Airport Authorities Employees Union made it clear that after the submission of the report of the committee if the government of India insists on its policy of privatisation of airports, the employees will have to resort to direct action programmes to oppose the policy of privatisation.


The CITU has congratulated the Airport Authority employees for their united struggle and appealed to them to continue it till the government of India is forced to withdraw the dangerous move to privatise our airports.