The buzz in the air is building up

If you thought domestic flying is all about discount deals and competitive pricing, here’s some more good news for you that’s coming right up from the ground.

Unknown to many, infrastructure development is taking place at airports across the country. Recently, Pakyong airport in Sikkim became the first greenfield airport to be inaugurated in the country (a greenfield airport is a new airport at a new site as compared to re-development of a brownfield, or existing, airport, as was done in Delhi and Mumbai in 2006).

This will be followed by Kannur airport in Kerala in the first week of October. Further, the contract for the second airport in Mumbai has been awarded to GVK’s Mumbai International Airport Ltd. And almost 71 per cent of the people whose land was needed for the Jewar airport on the outskirts of Delhi have given their consent.

According to Biji Eapen, National President of IATA Agents Association of India (IAAI), once Kannur Airport becomes operational, Kerala will have four international airports. He adds that perhaps Kerala should be ranked in the Guinness records for having the most international airports within a 465-km distance.

Work at the Navi Mumbai International airport seems to be moving at a fast pace, with fundamental measures, like novation, the land transfer agreement and financial closure, having been completed by July 15, according to senior officials at City and Industrial Development Corporation (CIDCO). After a visit to the site and discussions with the State government, Secretary, Civil Aviation, RN Choubey told newspersons that they were hopeful of being able to receive the first flight in 2021 at the new airport.

In neighbouring Goa, the GMR Group is working to get the MOPA airport up and running. In the first phase, which is scheduled to become operational in September 2020, the airport will be able to handle 4.4 million passengers a year. Post the bifurcation of Andhra Pradesh, existing terminals at Tirupati, Vijayawada and Visakhapatnam have been upgraded and new ones, such as the greenfield Orvakal airport near Kurnool, are in advanced stages of development. A fresh contract has been signed to award Dagadarthi airport near Nellore, and Kadapa airport has been slightly upgraded. The Airports Authority of India (AAI) is also expected to take up expansion of Tirupati and Kadapa airports.

Much-needed expansion

There is no denying that such expansion in airport infrastructure is much needed. The aviation industry has seen double-digit growth over the last 50 months. The new airports are expected to ease congestion at airports, especially in metros like Delhi and Mumbai, and lead to fewer flights getting delayed. They are also expected to add new areas to India’s aviation map.

According to Harsh Jagnani, Sector Head and Vice-President – Corporate Ratings, ICRA Ltd, the airport infrastructure sector in the country is increasingly under pressure from the strong growth in traffic since fiscal 2014. ICRA estimates that during fiscal 2014-2018, passenger traffic grew by 83 per cent and aircraft traffic grew by 51 per cent, even though capacity additions were moderate.

“Our estimate is that the country will need to nearly treble its airports capacity (terminal building capacity) in the next 10 years,” Jagnani says.

Santosh Hiredesai, Research Analyst, SBI Cap Securities, offers a slightly different perspective when he points out that the current double-digit growth in the domestic market is led by some of the non-metro airports that still offer some capacity.

“The constrained ones, like Mumbai, Pune and Goa, are growing in low single digits for now,” he says.

Losing battle

The key question is whether the airport development that is taking place is enough. Aviation watchers say that, on an average, it takes up to seven years to get an airport up and running. They may have a point as the foundation stone for the Pakyong airport was laid close to nine years ago and the first flight will land there on October 4.

The Centre for Asia Pacific Aviation (CAPA) points outs that experience with airports such as Navi Mumbai and Sriperumbudur shows that greenfield airport development can, in reality, take 15-20 years in India.

One can get proof of how this happens on the ground in airports like Navi Mumbai. About 90 per cent of the project land has been transferred to the GVK Group for developing the project but on the remaining 10 per cent of the land, about 1,900 of the total 3,000 families are yet to be relocated.

CIDCO has awarded pre-project work of ₹3,000 crore to three contractors. The work includes raising the height of the whole site up to 5.5 metres, diverting a local river, levelling a local hill and shifting high-tension power lines. However, due to the unique topography of the site, its height will have to be increased by a further 2.5 metres and this work will have to be carried out by GVK.

So what are the solutions till such time that the airports under development become functional?

Eapen emphasises the need for well-conceived development plans prior to locating new airports.

The new locations should be well-connected and serviced under the urban expansion scheme and the ticket process should be adequate to meet the local market conditions. Otherwise, rapid urbanisation will lead to uncertainty amongst the airlines and airport operators, he cautions.

Hiredesai feels one way of sorting out the problem could be improving airport navigation facilities and air traffic control systems at airports.

A case in point is the Mumbai airport which, despite its constraints, is one of the most efficiently run airports, even by global standards.

But he is quick to add that while these solutions can help improve capacity, there is a limit on how much one can optimise them.

Jagnani adds that till such time as new capacity is added, capacities can be improved by undertaking some design modifications, de-bottlenecking initiatives and utilising available free space at existing airports.

To ensure that slow airport development does not hamper the growth of the sector and given the fact that India will require a massive increase in airport capacity over the coming decades, CAPA has suggested the establishment of an independent Airports Commission of India, which will be responsible for preparing a strategic vision for the airport system, supported by a national masterplan.

The plan envisages that ‘AAI of the Future’ be a holding company that is majority owned by the Central government with shares in various strategic business units — airport management, airport maintenance, design and planning, airport IT, engineering and construction and real estate development.

“Each subsidiary will be run by its own management team which, in most cases, will be spearheaded by a Chief Executive Officer and may induct specialist strategic partners,” CAPA says.

With inputs from Ashwini Phadnis

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