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Will second Mumbai airport skid on oil?

Earlier this week, Jet Airways pulled out one of its flights from the Mumbai-Nagpur sector. Lalatendu Mishra
Hindustan Times | By Lalatendu Mishra, Mumbai
UPDATED ON JUL 08, 2008 12:48 AM IST

Earlier this week, Jet Airways pulled out one of its flights from the Mumbai-Nagpur sector. As global crude oil prices crossed the $140-a-barrel mark and passenger traffic recorded a sharp drop because of rising airfares — in June, the airfare went up twice, by nearly by 20 per cent – 150 flights across the country have been cut officially from July 1.

But unofficially, airlines have been suspending flight operations on unviable domestic routes for three months now. At Mumbai airport, India’s busiest, there were 1,735 no operations in June and 1,259 no operations in May. In April, the figure was 681.

These are figures procured by the Hindustan Times from sources in the Air Traffic Control, which handles flight movements. When a scheduled flight does not depart or arrive, it is referred to as ‘no operation’; these are different from cancelled flights, which have to be announced by the airlines.

“Whatever the figures, they reflect current realities,” said a spokesman of Mumbai International Airport Ltd (MIAL), which manages the airport.

So what then happens to the state’s urgent plans to build a new airport for Mumbai? The slow growth in air passenger numbers — 10 per cent in 2007 against 35 per cent in 2006 — and flight cuts do not bode well for the new airport, said a retired civil aviation ministry official who is now a consultant.

“Mumbai needs a second airport for the long term, but there is no pressing need as the demand-supply scenario has changed since the projections were made three years ago,” said a Delhi-based civil aviation expert, on condition of anonymity.

Projections made in 2005-06 — when air travel was at its peak and the sector expected to grow by 35 per cent a year — estimated that Mumbai airport would be saturated by 2013. From 25 million passengers in 2007, commuter traffic was projected to touch 40 million in 2013, making the airport in Navi Mumbai urgent.

But as oil prices spiral towards $170 a barrel and inflation pinches the middle-class, more flight cuts are expected.

Flights are going empty, and Naresh Goyal, chairman of Jet Airways, has been quoted as saying that airlines need to cut 30 per cent of their existing flights. If oil prices continue to go upward, the growth could be negative, said Kapil Kaul, CEO (India), Centre for Asia Pacific Aviation.

There is no doubt in Kaul’s mind, however, of the need for a second airport in Mumbai in the long-term. “Without a second airport, Mumbai will lose its relevance. This is the right time to think of infrastructure growth,” he said.

MIAL’s spokesman agreed: “The long-term outlook for Indian aviation is positive, and in that context the need for the Navi Mumbai airport continues to be relevant.”

Neelam Mathews, contributing editor of Avian Week, a global aviation magazine, suggests that the government should change the business model of the Navi Mumbai airport so that it will benefit both the hard-hit aviation industry and the fliers. “Rather than having a swanky airport with a billion- dollar private investment, the government can build basic infrastructure with a runway to handle private and cargo planes,” she said.

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