THE WIDE ANGLE. Runaway growth, not enough runways

First, the good news for India’s aviation industry: passenger volumes have almost doubled in four years and are growing at the fastest pace in the world. The bad news? India’s airport infrastructure is jammed to capacity and struggling to keep pace with the rush of passengers and planes.

One passenger on a recent 60-minute flight from Amritsar to Delhi found that even at 11 p.m., the plane had to circle overhead for an extra 30 minutes before getting landing clearance. Such stories now are becoming commonplace because the Delhi and Mumbai skies are congested from early morning to late night. And the situation’s about to get worse.

India's top airlines have placed orders for over 1,000 planes in the coming decade. Many will arrive this fiscal year. Satyan Nayar, Secretary General of the Association of Private Operators (APAO), says he expects Indian carriers to induct 125 planes in fiscal 2019 “to capitalise on strong domestic air passenger growth,” adding to the 500 planes already plying the skies for scheduled airlines.

Oil worries

Of course, the aviation boom could stall if oil prices climb to $100 a barrel or more on Midlle-East tensions. For now, the market’s holding up even as fares increase. SpiceJet just reported quarterly passenger loads of over 90 per cent and strong yields but Chairman Ajay Singh conceded he didn’t know if fuel costs will be “passable to passengers” if oil hits $100. Aviation experts, though, predict passenger growth will continue despite rising oil prices because of intense competition between the airlines.

While good for carriers, all this passenger growth is creating huge problems on the ground. CAPA (the Centre for Asia Pacific Aviation) predicts the airport system will “exceed its maximum structural capacity by FY2022” and says if new projects are delayed “this level could be breached earlier”.

The most intense pressure is being felt at the two key airports Mumbai and Delhi. Already Mumbai-Delhi is the world’s third-busiest domestic route with 47,462 flights operated between the two cities in 2017, just behind South Korea’s Seoul Gimpo-Jeju airports and Australia’s Melbourne-Sydney route. Incidentally, Mumbai and Delhi account for 37 per cent of India’s air traffic.

Mumbai’s Chhatrapati Shivaji International Airport, run by GVK, is at bursting point with its parking bays full. It’s doing a super-efficient 45-50 flights an hour, close to the world’s best rate. Mumbai has two runways but they intersect and the airport’s congested location means there’s no place for a third. Mumbai is looking at innovative solutions and trying to see if smaller and private planes can use nearby Juhu airport.

But real solutions appear to be several years away. In January, GVK tied up with Maharashtra’s Cidco to build the long-delayed Navi Mumbai Airport. Work started in April 2017 but land acquisition is still underway. Cidco’s only done a small part of crucial land-filling work. It promises Phase I will be ready by 2019 at which point the airport should be able to handle 10 million passengers. But many in industry and government believe this timetable is vastly over-optimistic and say a more realistic estimate may be around five years. CAPA reckons it will take even longer.

The situation is considerably better in Delhi but it will still be tight for a few years. Unlike Mumbai, Delhi has growth space but even here passenger numbers have surpassed all expectations. Delhi Airport handled 66 million passengers in FY 2017-18, almost its capacity levels. If this growth pace continues, even after expansion the airport will hit full capacity of 100 million by 2024-25.

Delhi International Airport Ltd (DIAL) is moving into high gear to tackle the expected mega-rush. It’s had to get airlines to move, unwillingly, from one terminal to another. It has also hired design and development consultant AECOM to work out preliminary designs and is pulling in expressions of interest for expanding Terminals 1 and 3.

Work on a new runway is also about to begin and should take three years. Other corollary projects, such as approach roads, are also being built. The Capital, at least, has answers visible in the foreseeable future. At another end of Delhi, work has commenced on Jewar Airport. Says Nayar: “The first phase of Jewar Airport, with two operational runways, will be operational by middle-2022.”

Head south to Bengaluru where the skies and terminals are also badly congested. In the last fiscal year, a record 26.9 million passengers took off or landed, a year-on-year jump of 17.6 per cent and way beyond the airport’s 20-million capacity. Says Bangalore International Airport chief executive Hari Marar: “We’re currently operating at about 30 per cent beyond capacity through augmented capacity initiatives”.

He adds, “given the prevailing economic environment, Bangalore Airport is likely to witness a three-fold increase in passenger movement over the next decade”. It's the same story in Hyderabad, Chennai, Kolkata and Kochi which are all approaching maximum capacity.

Hyderabad handled 18.3 million passengers last year, a 20-per-cent leap from the year before. Kolkata, too, has experienced nearly 20 per cent year-on-year growth. If current growth continues, Chennai will hit saturation by 2020 and Kolkata by 2021.

The government is also working hard to bring smaller Indian towns and cities onto the country’s aviation map. Its UDAN scheme is taking off after initial hiccups. Alliance Air is running 19 routes and SpiceJet is running another half-dozen. The scheme is expected to get a further boost later this year when IndiGo begins inducting more ATRs and SpiceJet brings in Bombardier Q400s specifically for less-crowded routes. Already Mumbai has eight slots for UDAN flights.

This all poses the central question of whether domestic companies alone can handle the boom. India will need to construct an extra 500-600 million of passenger capacity by 2030, requiring 55 new airports (on top of 100 currently), 150-200,000 acres and crucially $36 billion-to-$45 billion dollars in investment.

CAPA says: “Foreign capital will be needed but big companies abroad haven’t shown much interest despite vast growth potential, mainly because they don’t find the terms attractive”. GMR is currently building Mopa Airport in North Goa. No foreign companies bid for Jaipur and Ahmedabad airports.

The government’s hoping to woo foreign companies with innovative new financial platforms and has already permitted 100 per cent foreign investment in brownfield airports. CAPA suggests creation of a national airports commission with “world-class” airport planning expertise to develop an airports master plan with a 20-30 year horizon.

At the end of the day, it doesn’t need a crystal ball to predict the air traveller’s lot in the next few years is going to be about delays — both at crowded terminals and in the skies. Airlines may find they have to stall new inductions and fly planes to smaller airports because there are no parking slots at the biggest ones. The fact is planning has been almost non-existent and travellers will pay the price.

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