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AAI Rejects TN CM's Demand to Change Chennai Airport Operator, Cites Growth & State Issues
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CNBC TV18•24-09-2026, 13:17
AAI Rejects TN CM's Demand to Change Chennai Airport Operator, Cites Growth & State Issues
- •The Airports Authority of India (AAI) has pushed back against Tamil Nadu CM C M Joseph Vijay's demand to change Chennai airport's operator, stating passenger traffic is above pre-Covid levels and growth constraints are external.
- •AAI reports Chennai airport handled 23.01 million passengers in FY2025-26, exceeding pre-Covid levels, and existing terminals have a capacity of 30 million, projected to reach 35 million by April 2027.
- •AAI highlights Tamil Nadu's 29% VAT on Aviation Turbine Fuel (ATF) as the highest among Indian states, creating a disincentive for airlines compared to lower rates in Karnataka (18%) and Telangana (1%).
- •AAI refutes cargo growth concerns, citing 11.4% increase in full-year cargo volumes for FY2025-26 and Apple's appreciation for efficient cargo processing at Chennai.
- •AAI addresses passenger experience concerns, stating processing times are within standards and citing 96.7% domestic on-time performance, while also flagging state-level issues like road congestion and VIP vehicle parking.
Key Questions Answered
Tamil Nadu Chief Minister C M Joseph Vijay wrote to Prime Minister Narendra Modi asking to entrust Chennai airport's operation and management to an alternative operator, citing concerns over declining rankings, passenger facility issues, and slower growth compared to other airports.
The Airports Authority of India stated that Chennai airport handled 23.01 million passengers in FY2025-26, representing a 2.7% year-on-year increase and exceeding pre-Covid traffic levels of 22.54 million.
The Airports Authority of India pointed out that Tamil Nadu's 29% value-added tax on aviation turbine fuel is the highest among Indian states, creating commercial incentives for airlines to deploy capacity at Bengaluru and Hyderabad instead.
