Impact assessment of airport economic regulation and privatization on Indian airports’ performance

Abstract

The economic regulation in airport infrastructure in India was implemented after privatization which resulted into the adoption of different regulatory approaches for private and public airports. In the first cycle of revision of airport charges by Airport Economic Regulatory Authority (AERA) was undertaken in 2012, the prices has been increased more than four-fold with the result that Indian airports has come in the category of costliest airports of the world i.e. consumer has not been benefited as has happened in case of competitive industry such as telecommunication. Also the high traffic growth of Indian aviation sector, which started after introduction of low cost airlines in 2003-04, was adversely affected by steep hike in prices by private airport operators. However, the aviation has been benefited out of privatization in terms of creation of adequate capacity and quality of world class infrastructure