Stuck on the tarmac
Plans to modernise airport facilities and infrastructure have to be implemented on a war footing if India’s aviation sector is to avoid a crash landing, writes HS Bhatia.Updated: Apr 11, 2007, 06:38 IST
Since 1986, when Delhi’s Indira Gandhi International Airport (IGIA) was commissioned, the process of development and the restructuring of India’s aviation sector has been painfully slow. In 2000, this came to a virtual stand-still. Subsequently, the service level of airports and of the two national carriers, Air-India and the then Indian Airlines, dipped to an abysmal level.
Indian decision-makers paid no heed to international agencies like the International Civil Aviation Organisation (ICAO) and the International Air Transport Association (IATA) making projections in the 1970s about Asia and the Pacific Region capturing almost 43 per cent of the market share of global air transport in the 1980s — compared to the 34 per cent share then. This meant airports and airlines in the region had to go in for massive expansions. Countries like Malaysia, Hong Kong, Thailand, Dubai and Australia embarked on large-scale development with extraordinary capital investments to cash in on the coming aviation boom. They emerged as international airport hubs, with traffic volumes growing thrice to four times that of Indian airports.
During the last five years, India’s metro airports have started experiencing intense pressure due to unprecedented growth of air traffic. Recent figures point to a growth of 36 per cent for domestic traffic and 16 per cent for international traffic during 1996-97 compared to the same period in 1995-96. India’s airports, fully owned by the government, got entangled in time-consuming red tape that has resulted in infrastructure continuing to be desperately inadequate, causing considerable congestion and inconvenience to air travellers. Air-India and Indian, too, have not been able to cope with the growth due to the run-down condition of their fleets along with a small number of fast-ageing aircraft unable to meet the demand for longer hours of sustained flying.
In 2006, two private groups, GMR and GVK, were finally selected for the development of Delhi and Mumbai airports. These two groups prepared very ambitious development plans with an estimated cost of about Rs 15,000 crore for the modernisation of the two major airports that carry almost 75 per cent of the total air traffic. The modernisation of 45 non-metro airports at about Rs 7,000 crore was also put on track. Delhi and Mumbai airports were given the go-ahead for development with the Public-Private Participation (PPP) financing model.
If we take into account all the development envisaged in the aviation sector — airports, air traffic management, AI and Indian’s fleet augmentation — the estimated cost works out to be a staggering figure of $ 2.3-2.4 trillion. While the GMR and GVR proposals for development and management of the two major airports went under the government scanner, the hostile bids of the two groups, offering a fabulous share of 42-44 per cent of their annual turnover to the Airport Authority of India (AAI) were looked at with suspicion. It was feared that an offer of this nature was likely to inflate the cost of services at airports sky high, which in turn could adversely effect the growth of our air traffic and tourism.
In order to ensure fair play and a level-playing field to the investors, it was considered appropriate that the government put in place a high-powered regulatory mechanism for monitoring and controlling the quantum and phasing of investment. Such a mechanism exists in almost all big airports around the world. One also assumed the government to have by now appointed independent engineers for the two projects.
Another issue of concern is the unhealthy competition between ‘normal fare’ and ‘non-frill’ airlines. Special attention is also needed for the price of aviation turbine fuel (ATF) that is almost 30 per cent higher in India than the international price, thereby affecting the cost of air transport in India adversely. Adding to the list of priorities are facilities for senior citizens in airports, safe transportation between the city and the airport, the need for convenient car parking facilities, hostels for the working women at airports, metro connections, cooperation between the neighbouring countries for better efficiency and more capacity in each other’s airspace, consolidating the merger of Air-India and Indian, to have a reasonably large fleet, code sharing by airlines for improved load factor, safety and security in the air and on the ground.
There is a strong political will in favour of modernising aviation facilities in the country, combined with a popular desire for ‘things to improve’. Together, these can provide the elusive big push to the aviation sector. India has to cash in on this desire and economic necessity for our aviation sector to regain its status with international travellers around the world.
HS Bhatia is a former Member (Engineering), International Airports Authority of India