India's Most Influential Business and Economy Magazine - An IIPM Initiative 
 Search  
  Other Sections
  
  • Home
  
  •  Cover Story
  •  B&E This Month
  •  B&E Indicators
  • B&E Special Feature
  • B-School
  • CEO Speak
  • International Column
  • Letters to the Editor
  • National Happening
  • Politics
  • Power Jobs
  • Scrutiny
 


Share |
Cover Story
 
Go to Page Number - 1   2   
COVER STORY
Indian airports: A story of unreal advances
The clamour can’t be ignored. Somebody needs to stitch together a central plan to salvage what’s left of India’s airport modernisation plans. And fast.
Issue Date - 30/03/2013
 


We happily claim that India is headed to become the third largest aviation market by 2020 after US and China. But we forget that given present facilities, we have no room for about 300 million more fliers at our airports. To cater to this rising need for infrastructure at our airports, it is important that we have a second airport ready by the time 2022 comes in cities like Delhi, Chennai, Kolkata, Chennai, Bangalore and Hyderabad, and a third in Mumbai. Non-metros too need larger, newer facilities. Obviously, Delhi and Mumbai (together these cities handle over 30% of India’s total air passengers) will be on top of the priority list of both AAI and the civil aviation ministry.

At present, the IGI airport in Delhi has a capacity of 60 million. Given the expected rise in traffic, work on the second airport should start latest by FY2018. For that to happen, land must be identified at the soonest. Mumbai airport is already functioning at saturation levels. Its capacity is 30 million while it handled 30.4 million passengers in FY2012. When modernisation work ends there, the capacity will rise to 40 million. Not enough for the long run. Putting a third airport in place should be considered at the earliest and that facility should become functional in at least 12 years from now. Chennai airport that has a capacity of 40 million (including the yet to be functional facility) is expected to get choked by 2017, therefore the city needs another airport soon. Kolkata and Hyderabad airport (whose current capacities are 24.1 million and 12 million passengers a year respectively) would also require a second airport by 2021. No land in either city has been identified as yet. Pune (annual capacity: 2.3 million passengers; traffic in FY2012: 3.2 million), Lucknow (2.4 million, 2 million), tourism dependent Goa (7.5 million, 3.4 million), Patna (0.3 million and 1 million), Calicut (3.4 million, 2.2 million), Nagpur (1.1 million, 1.4 million), Srinagar (2 million, 1.5 million), Bagdogra (0.6 million, 0.7 million), Coimbatore (1.3 million, 1.4 million), Trichy (1 million, 0.9 million), Mangalore (1.2 million, 0.9 million), Port Blair (0.4 million, 0.6 million), Jaipur (1.6 million, 3.5 million) and Ahmedabad (8 million, 4.7 million) are some cities where the airports are either handling more traffic than installed capacity or given the expectations of rise in count of air travellers, will reach saturation in another decade. Strangely, AAI has not finalised a capital expenditure plan on airports beyond 2017!


Airport facility capacity shortage is not a problem in isolation. There are more issues that compound this infrastructure bottleneck. Lack of adequate surface transportation links, limited pool of skill, lack of parking bays, shortage of runways leading to airspace congestion, are all problems that need immediate attention. Even with India’s economy growing at a moderate pace in years to come, given planned investments of foreign carriers in India (after FDI was approved in carriers recently and the entry of LCCs like AirAsia), we could expect traffic growth to rise by 10-15% until 2025. Without expansion and/or new projects, the sight across India’s airports won’t appear pretty. It is also important that AAI seriously mulls over increasing the count of transit passengers by enhancing airport infrastructure to levels that meet global standards of ‘hubs’. This will not only help increase revenues for AAI and private players, but will also ensure a smaller hole in the pockets of domestic travellers in India. [It’s no secret that private developers are charging irrational sums to domestic passengers in the name of User Development Fee and Airport Development Fee.] Imagine, last year, only 10% of international passengers at Delhi and Mumbai were transit passengers – poor in comparison to airports like Singapore’s Changi (25%), Dubai (44%) and Doha (61%). Today, this world’s ninth-largest aviation market is in need of serious reforms in airport infrastructure. A master plan to accelerate the proceedings and avoid delays in execution is needed. Unless that happens, foreign investors, carriers and domestic private money will avoid the Indian aviation sector, and we will continue to invest much less than what the sector needs. The Airport Economic Regulatory Authority (AERA) should sit down with DGCA and AAI and discuss a detailed structural capacity review. Of course, the bigger question is – who will conduct the ‘fair’ review? The CAG again?
Steven Philip Warner           

Share |
 
Back     Go to Page Number - 1   2   
 


      
Comments   
   
      
Leave your first comment

   


     Leave Comments to this story    
     
Name:  
Comments:  
Email id:  
City:  
 
 
Busines & Economy is also associated with :
©Copyright 2008, Planman Media Pvt. Ltd. An Arindam Chaudhuri Initiative. With Intellectual Support from IIPM & Malay Chaudhuri.