GURUGRAM, India, 4 January 2019: India’s aviation market is experiencing fast expansion that according to the International Air Transport Association (IATA), will probably reach 487 million passengers (based on trips) by 2036.
While it is an enviable position to be in, there is just one roadblock in this unprecedented growth – the country’s airports are currently straining to meet rising demand.
With an increase in footfalls and the airside capacity squeezed, the Indian airport infrastructure has creaked under pressure and a steadfast build-up in airport capacity is what the country needs urgently.
The airports at four metro cities in the country – New Delhi, Mumbai, Hyderabad and Bengaluru – cater to nearly 55% of the country’s total air traffic and are operating at near-full capacity.
India’s top 10 airports handled 232 million passengers in 2018 in comparison to just 124 million in 2013.
This feverish growth in domestic aviation in the country over the last several years brings forth the need for more airports in the country. To handle the steep rise of the passenger influx, an investment of INR 300 billion (USD4.28 billion) would be required to expand their capacity by 2021.
The current airport capacity in India is up to a maximum of 317 million passengers and the year’s traffic is expected to be around 300 million.
The statistics revealed by the Centre for Aviation’s (CAPA) cautions that by 2022, India could exceed its maximum structural capacity. In fact, it could happen even earlier if we witness a faster growth rate of more than 10%.
According to CAPA, to create an additional capacity of around 500 to 600 million passengers, India will need around 55 more airports by 2030, which will require an investment of around USD36 billion to USD45 billion.
To meet demand the construction of 18 airports has already been given by the government in order to reduce the load on the major airports and provide connectivity to the smaller towns.
India, recently, achieved a milestone with its 100th airport becoming operational in Sikkim. One of the 18 approved airport projects; Pakyong Airport in Sikkim has been built in inhospitable terrain, at a height of 4,500 feet, at an estimated cost of Rs350 crore (USD50 million).
Another upcoming airport is the Mopa Airport in Goa, which is being developed by GMR after winning the bid on a public-private partnership basis with the state government.
In addition to this, the passenger facilities such as the terminal building at the existing Dabolim Airport will also be improved. The Navi Mumbai International Airport is another major airport aimed at easing air traffic congestion at Chhatrapati Shivaji Airport that is being developed by the GVK. The other under-construction airports include Karaikal in Puducherry, Bijapur, Gulbarga, Hasan and Shimoga in Karnataka, Kannur in Kerala, Dholera in Gujarat, Sindhudurg in Maharashtra and Bhogapuram in Andhra Pradesh.
Over the next 15 years, the government plans to establish around 100 more airports as was highlighted by the Minister of State for Civil Aviation, Jayant Sinha, recently. Among the suggested 100 airports, 30 airports will be secondary airports or an expansion of the existing ones while the remaining 70 airports will be at new locations.
The government is focusing on taking 15 to 20 years view on airport infrastructure development. In the budget for FY 2019, the government announced a NextGen Airports for Bharat (NABH) Nirman scheme to expand airport capacities to more than five times.
However, the question remains how will India finance the required expansion?
The Civil Aviation Minister, Jayant Sinha had said in an interview that the bulk of the investment would come from the private sector.
According to Neeladrinath Sarangi, Senior Manager at CAPA India, “The government’s plan to build 100 more airports is an ambitious target as when you look at the track record of execution, historically it has been very difficult to develop infrastructure on a scale and at a pace that has been envisioned here. Starting from capital investment, land acquisition, getting approvals, all of that will take time.”
Moreover, “The experience of private airport developers is somewhat mixed. They have developed very good airport infrastructure, but not all of them have made significant returns. So in terms of the financing side, getting private interest will not be very easy,” he added.
(Source: Frankfinn Aviation Services Pvt Ltd)