India requires $40-b investment in airports: CAPA

India is about a face a severe crisis as planned investments in upcoming and existing airports is only a fraction of the $40 billion investment that is required, a recent report said.

In a report on ‘India’s airport capacity crisis’ released on Wednesday, Centre for Asia Pacific Aviation (CAPA) estimates that on the basis of its current growth forecasts, planning for a second airport in Delhi needs to commence immediately.

According to the report, Delhi Airport is estimated to have the potential to handle up to 90 million passengers when fully developed. On current growth forecasts, Delhi is expected to be saturated by FY2023, hence planning for a second airport needs to commence immediately.

Similarly, Chennai airport may not be able to grow beyond 18 million passengers (CAPA estimates) due to airside challenges. If so, the airport could be closed to new services by fiscal year 2018, the report said.

CAPA estimates that airports in both Bengaluru and Hyderabad will reach saturation by fiscal year 2026.

“We need second airports functional when current airports reach 70-80 per cent of their structural capacity,” said Kapil Kaul, CEO South Asia at CAPA.

According to the report, India’s airport capex pipeline of around $4.9 billion is completely inadequate to meet the kind of expansion required. Emerging markets such as China plan to invest $130 billion in airports over the next 10-15 years, while the UAE has airport capex plans of $46 billion, the report said.

Turning its attention to airports in non-metro cities, the report says that States that face particularly serious challenges include Tamil Nadu, Gujarat, Bihar, Madhya Pradesh and Uttar Pradesh. The report points out that among the 30 largest non-metro airports operated by Airports Authority of India, 40 per cent are already estimated to be operating over their design capacity.

The report says that Jammu, Pune, Kozhikode, Mangaluru and Tiruchi are among the airports that will reach saturation immediately, while Thiruvananthapuram and Madurai airports will face saturation in fiscal year 2017. Despite significant improvements in the management of India’s airspace in recent years, the CAPA India report highlights the fact that a completely new approach is required, if air navigation services are to keep pace with projected growth.

The absence of planning, according to the report, is clearly reflected in the fact that the 12th Five Year Plan envisaged ₹70,000 crore (approximately $11 billion at the current exchange rate) of investment in airports.

However, CAPA estimates that the actual capex during this period is unlikely to cross $3 billion. “India is dangerously under-prepared to develop the airport capacity it desperately needs,” the report said.

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