AAI to hive air traffic off into new subsidiary

The Airports Authority of India has decided to hive off its air traffic control operations into a separate subsidiary company. It plans to conclude the restructuring within a year.

ATC operations provide over  60 per cent of AAI revenue. The move is to ensure focus on revamp of ATC, particularly the key area of staff hiring, where there is a big shortage.

As part of the process, AAI will have a new member on its board to monitor the functioning of ATC, said a senior official. He will be called member (air navigation service provider). Currently, the job is looked after by member (operations).

There are 1,600 ATC officers across the country, which is far below the requirement. It is one reason for increasing incidents of near-collisions in the air. According to ATC sources, they require another 800 officers.

The government has plans to hire 400 retired ATC officers, from both the civil and military sides.

Hiving off ATC operations will formally bring down the revenue earning of AAI by 60 per cent. It earned Rs 4,186 crore and made a profit of Rs 687 crore in 2008-09.

ATC revenues include charges for route navigation facilities, terminal navigation, and instrument landing, collected from domestic airlines that use these services across the country's airports. Also, every time an international flight uses Indian airspace, it generates revenue for AAI.

In Europe and in the US, it is usual to have ATC operations in a separate company.

AAI is upgrading 35 non-metro airports across the country with an estimated investment of Rs 12,434 crore (Rs 124.34 billion) and is looking at various ways to raise money.

It has planned to seek five years' revenue from the government as compensation for the closure of its Bangalore and Hyderabad airports to make way for new and privately-run ones.

It is also negotiating loans with various financial organisations. Of 87 commercial airports that AAI owns and manages, only 13 make profits.