‘Privatization of Air Navigation Services could happen in next 12-18 months

By Livemint

The privatization of of Air Navigation Services (ANS), which is controlled by the state-owned Airports Authority of India (AAI), could be carried out in the next 12-18 months, and lead to better efficiency and optimization, V Somasundaram, former Member (ANS) at AAI said on Thursday.

Speaking at a webinar organized by aviation consultantancy CAPA India, Somasundaram said that optimization of ANS requires integration from airport operators, airlines, military and civil society.

“The delay in the corporatization of ANS is probably because the AAI doesn’t want to remove one of its major arms (from itself),” he added.

Air Navigation Services include air traffic services, communication, navigation, surveillance services, meteorological services for air navigation; and aeronautical information services provided for the smooth running of airline and airport operations.

While many major economies like the United Kingdom (UK), Canada, Germany and Italy have either privatized their ANS or operate under the PPP (public private partnership) model, this is still controlled by the AAI in India.

At present, ANS comprise about 26% of AAI’s revenue. According to the latest data, ANS contributed to about ₹3,702.2 crore of AAI’s revenue during 2018-19, while airport services contributed to about ₹4,491.6 crore to the total topline of ₹14,133 crore annual revenue for the state-owned company.

“The roadmap for the corporatization of ANS must commence now, especially as COVID has provided a growth pause permitting a rethink and redesign of national assets to proceed with less pressure from daily fire fighting,” CAPA India said in a presentation.

“The potential impact on the AAI’s balance sheet is largely due to the AAI’s inability to realize commercial value from its assets. This is not a valid reason to justify delaying corporatization,” it added.

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