The Hindu Business Line : Addressing ground realities of budget air-travel

With the setting-up of low-cost terminals budget airlines, which now use terminals of conventional airlines, will be able to cut operation costs which is essential for their success.

ACCORDING to reports the Civil Aviation Ministry is planning to set up a separate terminal for low-cost carriers at the Delhi airport, and at the Mumbai terminal efforts are on to create more space for these carriers by shifting operations of small aircraft to the Juhu airstrip.

This is not surprising. The success of Air Deccan, the pioneer of no-frills aviation in India, has prompted several players including the state-owned Air-India get on the bandwagon.

According to the Centre for Asia Pacific Aviation, about 10 new low-cost airlines are to start operations in the country in the next couple of years. The mushrooming of low-cost carriers is bound to throw-up new challenges.

The logical next step to the no-frills revolution is the setting up of low-cost terminals. Low-cost terminals are essential to ensure the low-cost operation which is most crucial for the success of these airlines. These terminals are essential for the operational feasibility of these airlines.

Since cost is a major factor in budget travel, the terminals have to be built by the government to help such carriers undertake and sustain cost effective operations.

Low-cost carriers will not need top-notch facilities, such as the aerobridge or catered meals, that are taken for granted in air travel. Low-cost terminals will have no fancy architecture, no escalators or stairs, no business lounges, only self-service check-ins, and will generally involve a short walk between check-in and the aircraft.

This new category of purpose-built terminals will result in cheaper passenger charges, which in turn will mean cheaper tickets (if the benefits of low charges are passed on to the passengers), and greater profits.

While a low-cost terminal should be efficient and clean, it will be different from present terminals in terms of its physical attributes.

According to experts, a low-cost terminal need only have the physical attributes similar to that of bus terminals in developed countries. Ground services are critical to the turn-around period, which has to be minimum, and therefore the utilisation of the aircraft has to be key.

The decision to have low-cost terminals is not always without controversy. In Malaysia, for instance, Air Asia is not only a success story but also a role model for the Asian market and yet the country dragged its feet on the proposal to have a low-cost terminal.

This was because of an intense debate on whether to re-open the Sultan Abdul Aziz Shah airport at Subang for setting up the terminal.

Air Asia had requested the government to do away with the "one-airport policy" and set up a dedicated budget airline hub at Subang. But its bigger rival, Malaysian Airline System Bhd, in which the government has an 85 per cent stake, objected stating that a Subang hub could hurt the main airport. So Malaysia has decided to locate it's low-cost terminal at KL International Airport itself.

In Indonesia, the local airport authority in Bali has opposed the setting up of special terminals for low-cost carriers. All airlines, whether low-cost or not, will be required to follow the same rules for operations to and from the Bali airport.

Singapore, of course, is going ahead with its plan to have a separate terminal for low-cost carriers. The island-nation's S$15-billion facility promises a no-frills style of service synonymous with budget airlines.

Singapore, Asia's sixth biggest air hub, has two airport terminals and is building a third. The proposed low-cost terminal will be in addition to the three. In Europe, new budget terminals are being proposed at Bari, Italy, and Geneva, Switzerland.

British Airways and BMI British Midland pulled out of Belfast a few years ago; bmibaby, a low-cost carrier, established its second UK base at Cardiff while easyJet, another low-cost carrier, concentrates on Luton. Ryanair has set up a hub at Stockholm Skavasta.

TBI, which also owns airports at other places, is trying to convince the budget airlines to expand their services to these airports.

In fact, the sheer expense of building new terminals for network carriers at a terrific cost (the proposed Terminal 5 at Heathrow is estimated to cost £4 billion, and at home the Indian government is mulling over a massive Rs 50,000 crore scheme to upgrade and modernise the existing major airports to cope with the projected increase in traffic) have left the no-frills carriers wondering why they should be so elaborate.

The environmentalists complain that the spread of low-cost carriers and construction of more terminals will cause huge pollution and contribute to global warming.

The governments in many countries including India, even as they proclaim their commitment to reducing green-house gases, do not always seem overly concerned about the environmental consequences of air travel. They are yet to get the industry cover the environment costs.

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