Going Global: Airport Infra Offers Huge Business Vistas

Jetairways

Having witnessed a whopping $9 billion investment in the past decade, Indian aviation sector is awaiting a further investment booster worth $30 billion, meant mainly catering to the targeted 350 million flyers per annum by the turn of the decade. Aviation experts are currently busy coping up with the severe capacity constraints confronting big ticket airports across metros and are shaping them up with facilities matching world standards. That apart, AAI has earmarked a staggering sum of Rs.25,000 crore of which Rs.12,000 crore is being invested on building state-of-the-art airports in tier-II and tier-III cities to push regional connectivity and the rest will go for providing ultramodern facilities including cargo handling, multi-level parking, hotels and creating related infrastructure in city side areas across airports in smaller cities on PPP module. Reports Jeet Singh.

Big Ticket Airports

The Indira Gandhi International Airport in Delhi, which is turning a game changer in the country’s aviation history, on completion will have a sprawling complex with an ultimate facility for over 100 million passengers per annum. The Terminal-3 of the airport built by Delhi International Airport Limited (DIAL), which was opened to air traffic recently, has been blended with the expertise of global experts including, Parsons Brinckerhoff of USA as its project management consultant, McDolnald of UK as principle designer and architect, while Indian engineering and construction giant Larsen and Toubro was the engineering procurement and construction contractor and Airbiz of Australia as airport planner and Wood Head also from Australia was the interior designer. In its entirety, the Delhi airport currently ranks 4th best in the world in its category and has been named as the best improved airport in the Asia Pacific Region by Airport Council International (ACI).

Delhi Airport

The terminal T-3 of the DIAL has been built at an investment of Rs.12,000 crore with 78 aerobridges and 168 counters, automated baggage handling and security facilities by agencies including GMR Infrastructure, Fraport and AAI and the project has in fact proved a triumph and an ideal example of PPP partnership providing facilities for over 34 million both outbound and inbound passengers every year. Not just this, the GMR built and managed Hyderabad international airport has received an award as the best airport in the five to fifteen million traffic handling capacity. Alongside, for the airport the government is working out strategies to manage capital inflow ensuring positive fiscal regime for airlines and empowering them to address tax related concerns and effecting groundbreaking changes to give ultramodern facelifts to ground handling, licensing, airspace management, investments in CNS and ATM technologies, apart from imparting hit-tech training to air traffic controllers (ATCs) across metro airports.

Delhi Airport

Coping Capacity Crunch

The metro airports across the country are facing severe capacity crunch and the airport operators are currently busy eliminating the bottlenecks. The Mumbai Airport operator, GVK-led consortium has recently roped in UK-based air traffic services provider NATS to work out modalities and suggest ways to decongest the country’s second busiest airport. NATS, which is known for pushing productivity and operational efficiency, is currently managing air navigation services at Heathrow Airport, the busiest airport in the world. It has been given the mandate to eliminate bottlenecks blocking capacity addition and suggest measures for capacity augmentation that can be achieved by improving air traffic procedures and making changes to physical infrastructure. Due to the looming bottlenecks, many Indian carriers have revisited their expansion plans and re-routed network strategies because of the inability of airport operator to provide slots for more flights from the city.

Mumbai Airport

Tackling the capacity crunch, the government has recently decided to set up a world class airport at Navi Mumbai at an investment of Rs.9,970 crore and the first phase of the airport would be completed by 2015. Now, Mumbai is becoming the first city in the country to have two operational airports with a combined capacity to handle 50 million passengers per annum by 2015. The Phase-1 of the new airport will handle 20 million flyers and it would subsequently be expanded to handle 40 million passengers over a period of time. The project, which would be built on public private partnership with the private sector holding 74% equity while AAI and the state government’s City & Industrial Development Corporation (CIDCO) holding 13% each.

Similarly, Calcutta International Airport, which also faced similar capacity constraints, is also undergoing upgradation and the new terminal, which is currently being built on war footing, is also getting ready to become operational in the next couple of months. Though the integrated terminal will be ready by October this year, but some test runs will be carried out there initially before it is made fully operational, Airport Director, B. P. Sharma said. For eliminating capacity crunch, an additional space of 600 sq m has been created for setting up two additional security check counters and the move will help reduce the check in time for passengers. In addition, there will be online X ray at the integrated terminal complex for the benefit of passengers.

Likewise, the GVK Group, which built the Bangalore International Airport, (BIAL) is expanding the Terminal-1 of the airport to accommodate Airbus A380 for which the company is doubling its capacity on the passengers’ terminal. The GVK Group, which has 29% stake in BIAL, has undertaken the expansion addressing the growth in passengers’ traffic and concerns over its infrastructure and design and is fulfilling the requirements after that the larger expansion of Terminal-2 would be taken up very shortly. The entire airport project is expected to be completed by 2014 and would be able to handle annual passenger traffic of 17 million per annum.

That apart, for decongesting metro airports, the AAI has recently decided to waive off night parking charges for aircrafts at its non metro airports to increase the usage of certain recently upgraded airports in Jaipur and Lucknow. The strategy apart from decongesting the metro airports is for pushing regional connectivity as small towns including Patna, Nagpur, Dibrugarh and Lucknow have recorded over 72% growth in domestic traveling and big airlines are increasingly looking for small cities for market share and introducing low cost carriers (LCC) to tap the market.

Airports Touching Completion

The expansion and giving fresh look to Chennai airport is currently going on at a feverish pace as over 1,000 workers from different states across north India are working at the construction site. The AAI, the implementing agency of the project expects the expanded airport would be ready during second half of 2011. The three separate improvement projects, which are currently underway at the airport include the expansion of the runway and apron capacity of the airport. The runway, which is 6,840 feet long will be extended to 1.03 km, including the bridge over the Adyar  and parallel taxi track. The international terminal building is being extended by 59,300 sq m to cater to an additional four million passengers a year. In addition, a new domestic building is being built on an area of 67,700 sq m to cater to 10 million passengers per annum. The entire project is being executed at a whopping investment worth Rs.2,015 crore.

Likewise, the first phase of the Greenfield Airport project near Durgapur in West Bengal, involving an investment of Rs.600 crore, has been completed. The airport complex, which is a part of the maiden aerotropolis in the country, is all set for commissioning early next year. For building the project, Bengal Airport Project Limited (BAPL) has entered into joint venture agreement with the state government to build the aerotropolis in which Changi Airports International of Singapore has 26% stake. Apart from airport, the project will also house a township, an industrial zone including an IT park and a solar valley that will house units to manufacture solar power equipment. The joint venture partners have conducted a route development study for the proposed airport and BAPL has prepared a report and held negotiations with airliners including Air India, Jet Airways, Kingfisher and IndiGo and secured a favorable response. Similarly, another airport project is also getting finishing touches at Andal in West Bengal it is also being built by the same company and the contract has been awarded to the Simplex infrastructure. The 4C project is designed to handle aircraft including airbus and Boeing on an initial runway of 2,800m and it would subsequently be extended to 3,300 m to accommodated wider bodies aircrafts.

In addition, the AAI in a joint venture is also building the Chandigarh International airport and an agreement has been signed between AAI, the Greater Mohali Area Development Authority of Punjab and Haryana Urban Development Authority (HUDA) and the project is expected to be commissioned by 2012-13. The airport will have a new terminal building catering to the domestic and international traffic. This airport will have a great cargo traffic potential generated by scores of districts of Punjab, Haryana and Baddi industrial belt of Himachal Pradesh.

The Punjab government is also setting up a greenfield International Airport in Ludhiana entailing Rs.17,500cr investment. The project is also being built in the private sector by Bengal Aerotropolis and has Changi International Airport of Singapore as its partner. It is coming up on an area of 3,000 acres in the nature of an Aerotropolis, a modern age concept of a township oriented airport matching Singapore Frankfurt model and is all set to don the tag of the first greenfield international airport in North India. The project has also been lauded as the biggest infrastructure development venture in Punjab.

Regions on Air Radar

In an attempt to provide top class connectivity across the country, the Ministry of Civil Aviation has earmarked Rs.12,000 crore to develop 40 top class airports in tier II and tier III cities and has also permitted the cash starved Airport Authority of India (AAI) to engage private players in building ultramodern facilities in city side areas of airports in smaller cities at an investment of Rs.12,434 crore. The nodal agency is contemplating to set up facilities including creating infrastructure for cargo operation, shopping centers, hotels, car parking to mobilize funds for the modernization of these airports.

The agency has targeted to build these facilities at 35 non metro airports on a combined land parcels of about 300 to 400 acres. However, the maintenance of the terminal buildings will not be a part of the city side development as it has already been done in cases of Delhi and Mumbai airports. The planned facilities will fetch funds to the tune of 200 to Rs.300 crore per annum to AAI and for the first phase of the project the authority has targeted airports in cities including Jaipur, Lucknow and Ahmedabad. To begin with, the AAI will give land to about 10 airports on a 30-year lease on an upfront payment and the remaining part of rentals would be charged in a staggered manner and the tenders and project awarding process for these airports is all set to start very shortly. Similar process for the remaining airports would be completed within next one year. In addition, the non metro airports which have been identified at locations including Kanur in Kerala, Mopa in Goa while Kolkata and Chennai are being taken up as mega projects for modernization. Other airports include Goa, Jammu, Bhopal and Kushinagar in Uttar Pradesh and Mangalore. While airside works at nine smaller airports including Trichy, Trivendrum, Udaipur, Ahmedabad and Jaipur have been completed.

The Himachal Pradesh government is set up its first international airport at an investment of Rs.1,000 crore in Solan district of the state on a public private partnership model. Solan, which is apart from an ideal tourist spot, is also located in the proximity of the Baddi industrial belt besides being very close to Chandigarh. In addition, the Airport Authority of India is setting up a Greenfield airport at Sriperumbudur, a fast growing township, on the outskirts of Chennai and has already identified about 4,820 acres of land for the purpose. The state government is willing to set up the airport along the Chennai-Bangalore national highway. In this context, Chennai is all set to join the growing number of cities like Goa and Mumbai with two airports each. Apart from the Navi Mumbai, there are innumerable opportunities in the regional airports in Maharashtra and authorities are planning new airports in areas including Shirdi, Pune, Solarpur Amravati, Gadchiroli and Dhulia. Over a period of time, these regional airports will get connected with the main big ticket airports thereby pushing the regional connectivity considerably.

Global Glance

According to available trends, the global airlines aviation business has almost touched $15 billion for 2010, up from $8.9 billion estimated earlier. This was largely due to a tangible growth in third quarter earnings in the Far East and also in the US and Europe. Indicating that the grip of global economic turmoil on air traffic firms is disappearing fast and the growth rate is expected at the rate of 18.6% and 30% respectively in passenger and cargo traffic in West Asia and North Africa in 2010 as compared to global growth rates of 8.5 percent and 24%. Growth estimates for the next four years for domestic and international aircrafts movement is 14 and 13% respectively and the domestic passenger growth has also been targeted at 20% while figure has been put at 16% for the international passenger growth.

NBMCW February 2011

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