AAI, Pawan Hans to be listed on bourses

AI privatisation not ruled out but, for now, efforts will be made for a turnaround

The aviation ministry on Monday said it would list the Airports Authority of India (AAI) and Pawan Hans Helicopter Ltd on the stock exchanges to improve efficiency and transparency.

Not ruling out privatisation of Air India, the ministry added an expert committee would set a road map for the bleeding state-owned airline to "achieve its full potential".

The announcements by Civil Aviation Minister Ashok Gajapathi Raju were part of the aviation policy unveiled on Monday. The government has sought views from the public on the draft policy, which is likely to be finalised in January.

"Listing improves transparency and efficiency. AAI will be corporatised, and then listed. The listing of Pawan Hans will also be undertaken with the same objective," Raju said. (HIGH FLYERS)

While the minister did not provide a schedule, V Somasundaran, the aviation secretary, said: "We hope to complete the process in six months. We have to discuss with the department of disinvestment."

The idea of listing AAI was mooted in 2009 and consultants KPMG had valued it at $4.5 billion for the United Progressive Alliance government. However, AAI found this valuation low and instead suggested $17.9 billion. Its profits have soared on hefty fees from joint ventures that operate the Delhi, Mumbai, Bengaluru and Hyderabad airports. "If it (Air India) could be listed, I would be the happiest person. All these suggestions have emerged. We don't want to open a Pandora's box. We will have to take a conscious decision as it is a delicate matter," Raju said.

The draft aviation policy has plans for modernisation of four airports - those in Kolkata, Chennai, Ahmedabad and Jaipur. Management contracts will be awarded for a fee to private operators at Kolkata and Chennai, and the Jaipur and Ahmedabad airports will be developed under public-private partnership. The draft policy, for the first time, has recognised helicopter aviation as a separate category. Pawan Hans, a joint venture between the government and ONGC, is crucially dependent on services to the oil company, though it also caters to state governments. The company has pulled itself back from the brink with a profit of around Rs 11 crore in 2012-13.

AAI's fees from the Delhi and Mumbai airports have more than doubled from Rs 1,035 crore in 2010-11 to Rs 2,673 crore in 2013-14. The share of these fees in AAI's revenue increased from 20 per cent to 33 per cent during this period. Without cash flowing in from public-private partnerships, AAI would have been in the red. This money has helped it modernise the Kolkata and Chennai airports, as well as other smaller ones, on its own.

AAI holds a 26 per cent stake each in Delhi International Airport Ltd and Mumbai International Airport Ltd, which pay as fees to AAI 45.99 per cent and 38.7 per cent of their revenues, respectively. From the Bengaluru and Hyderabad airports, AAI receives four per cent of their annual revenue as fees. In 2012-13, these two airports together made a profit after tax of only Rs 227 crore, a 10th of what they paid AAI.

In 2012-13, AAI invested Rs 1,800 crore in developing airport infrastructure. That was less than the fee it received for the Delhi and Mumbai airports. The government reduced Budget support for modernisation of airports in the Northeast to Rs 42 crore in 2013-14.