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Thiruvananthapuram International Airport: Busiest airports across world are operated in private sector, says chief of IBS Software Services

Vinson Kurian Thiruvananthapuram | Updated on August 20, 2020

Airports create economic activity and high quality job opportunities. Every 10 per cent increase in air traffic is estimated to result in half a percent growth in GDP. It is not a mere coincidence that most of the busiest and successful airports in the world are operated in private sector, says VK Mathews, Executive Chairman, IBS Software Services.

Mathews welcomed the move of the Centre to bring in a private operator for operating and managing the Thiruvananthapuram International Airport. IBS Software is a leading provider of new-gen IT solutions to the global travel, transportation and logistics industry. Mathews was one of the anchor investors at Technopark, once the country’s largest technology park.

Misconceptions over biz model

There are several misconceptions about airports and their business model resulting in the uproar against their privatisation, Mathews told BusinessLine from Dubai. “It is important for us to understand the realities of airport operation and the implication of privatisation, before we take a position to oppose it. Since I have been working and involved in the aviation sector for over three decades, I thought I should share my views on the topic,” Mathews said.

An airport is a commercial and customer services enterprise and therefore not an ideal area for governments to operate in. An efficient, convenient and modern airport will increase air connectivity and promote economic development. Better the airport, more the traffic and increased earnings for the State by way of levying user fees. A private investment will bring in the necessary efficiency and focus of a private enterprise and regulatory rigor of the government.

“Several airports in the country got immensely benefited by private investment, and why not Thiruvananthapuram? We now have a great opportunity to make it India’s best. We should not miss this opportunity because of unfounded fears and concerns. Let’s together welcome the best of investments into our city and take it to the next level of growth and prosperity,” Mathews added.

Compelling global, domestic cases

Four of the top-five earning airports in the world (Heathrow, Frankfurt, Madrid and Paris) are private airports. The private airports in India (Mumbai, Delhi, Bengaluru and Hyderabad) have recorded phenomenal growth in the past years. In 2018, they won the “Best Airport in the World” awards in three respective categories of large, medium, and small airports (ACI Airport Service Quality Awards).

The Thiruvananthapuram International Airport is extremely critical to the development of the State capital region and the southern districts of Kerala. The State’s vision to develop Thiruvananthapuram as a knowledge-driven digital hub is critically dependent on Trivandrum airport and its air connectivity.

Mathews observed that the Indian aviation sector has been growing rapidly during the past several years. In fact, it has recorded consecutive double-digit growth over a 50-month period before Covid-19 set in. It is to sustain and support this rapid growth that the Civil Aviation ministry has decided to privatise six more airports, which includes Thiruvananthapurm.

‘Best thing to happen’

G Vijaya Raghavan who set up Technopark, India’s first technology park in Thiruvananthapuram in the 1990s, said he is elated to learn about the decision to hand over the international airport here to a private operator. “This is one of the best things to happen for Thiruvnanthapuram, the best that has happened to it in recent times. I definitely expect the private operator would do a much better of it than what we have seen the Airports Authority do here.”

Patrons have been put to innumerable difficulties over the past decade under its watch, Vijaya Raghavan said. This is despite the fact that the industry has complained to it over the deplorable facilities, poor levels of services and hygiene, among other things. Most importantly, it was not able attract flights into Thiruvananthapupram, he added.

“Now that a private operator has come in, it gives one the confidence that once we get past the Covid situation and things get back to normal, connectivity would much better than what it was before. This is simply because if there’s no connectivity, the operator will not be able to make money. So it has to bring in more flights.”

Getting more travellers

The private operator will have also to ensure that passengers use the airport here more, unlike the Authority which was not bothered if they shunned it and chose to travel to Kochi to catch a flight. The unconscionably high user fees, in fact one of the highest in the country at one point, had repelled them. A logical question to pose here is why not leave the airport to government hands.

“I think the government should focus on governance. Let it not try to do business; instead, allow critical infrastructure such as airport to be run by professionals. Another valid point to remember is that Adanis are also developing the Vizhinjam International Seaport here,” Vijaya Raghavan said.

For the airport and seaport to do well, there has to be substantial development around South Kerala and South Tamil Nadu. So if we have a large industrial group supporting that kind of development, that’s the best thing to happen. One other fact to bear in mind is that the airport continues to be a property of the government unlike in Kochi and Kannur where it has a token presence. “I hope the private operator takes over as fast as possible and take the state’s first international airport as one of the best in the country,” Vijaya Raghavan added.

Published on August 20, 2020

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