Bet­ter air­port in­fra­struc­ture

The in­flux of low cost car­ri­ers in the In­dian skies has led to the need for air­ports to re­vamp their fa­cil­i­ties, as per a re­port by CAPA Global Avi­a­tion Re­search KPO (July 2015). Ex­cerpts:

Cargo Talk - - Report -

The In­dian mar­ket has shifted pre­dom­i­nantly to low-cost and it is really only Jet Air­ways and Air In­dia which con­tinue to op­er­ate with a full ser­vice cost struc­ture, even if they do re­tain jointly a 30 per cent mar­ket share of seat ca­pac­ity. As if the In­dian LCCs were prob­lem­atic enough to those FSCs the en­try of AirAsia In­dia (AirAsia In­vest­ment/Tata Sons/Te­lestra) in June 2014 really set the cat amongst the pigeons. It plans to grow its route net­work to ser­vice all In­dian met­ro­pol­i­tan cen­tres and a se­lec­tion of tier-II cities. How­ever, it has not yet made much of an im­pact on over­all seat ca­pac­ity.

AirAsia is recog­nised for hav­ing one of the low­est cost struc­tures in the world, ef­fi­cient pro­cesses and a strong brand. IndiGo (the largest in­dige­nous LCC) may there­fore face stiff com­pe­ti­tion on routes where AirAsia op­er­ates, bring­ing fur­ther pres­sure on air­ports to pro­vide ap­pro­pri­ate in­fra­struc­ture at an ap­pro­pri­ate price.

Firstly, what has hap­pened and what is planned at the ma­jor met­ro­pol­i­tan air­ports to recog­nise this shift to­wards low cost?

There are no plans for any sort of low-cost ter­mi­nals or piers at Ban­ga­lore, Hyderabad, Chennai and Kolkata air­ports. The first two of those air­ports are al­ready PPP ven­tures while the lat­ter two will now be de­vel­oped un­der ‘man­age­ment con­tract’ op­por­tu­ni­ties.

On the face of it the de­ci­sion not to build LCATs at th­ese air­ports might seem to be an odd one. LCC pen­e­tra­tion there is as fol­lows (again by seat ca­pac­ity): Ban­ga­lore 59.8%; Hyderabad 57.1%; Chennai 49%; Kolkata 64.2%. One might as­sume that the en­tire air­port in each case is now a ‘low cost’ air­port even if charges do not re­flect that, and that fur­ther in­fra­struc­ture de­vel­op­ment might be geared to­wards the re­main­ing – and any new – full ser­vice/net­work car­ri­ers.

In the cap­i­tal Delhi, a PPP since 2006 and where there are two ter­mi­nals – T1D and T3 – T1D is ef­fec­tively the low­cost ter­mi­nal. It was orig­i­nally con­structed as a tem­po­rary ter­mi­nal for all do­mes­tic ser­vices while T3 was be­ing con­structed. But it proved to be quite pop­u­lar with air­lines and pas­sen­gers. It is mod­ern, bright and airy, has a good range of re­tail, F&B and other ameni­ties and its de­sign means that it is a very short dis­tance from the check-in to the board­ing gate, from where pas­sen­gers are bussed to the air­craft.

When T3 was opened, all air­lines were meant to move there and T1D would no longer be used. But the LCCs liked T1D and felt that T3 with its lengthy piers and long walks made it less ef­fi­cient for their ground staff, im­pacted on-time per­for­mance and was less pop­u­lar with pas­sen­gers. T3 is also around 10-15 min­utes fur­ther from the city. So they re­mained there. Mean­while the full ser­vice car­ri­ers moved their do­mes­tic oper­a­tions to T3 so that they could have D-I/I-D con­nec­tions un­der one roof, apart from which T1D was be­yond ca­pac­ity…

With most of the AAI's port­fo­lio of air­ports los­ing money it was con­cluded that it would be bet­ter to ad­dress the vi­a­bil­ity in­fra­struc­ture rather than in­vest­ing in cap­i­tal in new air­ports which could be­come white ele­phants

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