SOARING TO SUCCESS
Interacting with Millennium Post, Dr Guruprasad Mohapatra, Chairperson, Airports Authority of India, talks about the rapidly expanding civil aviation sector
What is your strategy for improving experiences of flight passengers? The growth rate of India’s civil aviation sector is 16 to 17 per cent which is very high. Given this, the capacities of new airports and augmented capacities of other airports get saturated within five to six years. We have identified 25 major congested airports and prepared a separate master plan for each to improve each and every aspect— from capacity building, navigation to commercial viability and passenger amenities. We have a five-year plan for the development of airports infrastructure in this country.
What are the plans to implement the strategy with regard to finance?
We have a plan to invest Rs 17,500 crore by 2020-21. In the current financial year, Rs 2,000 crore has been invested, and we plan to add Rs 2,500 crore for 2017-18. We are removing bottlenecks and increasing our efficiency in each area. Besides managing inland aviation, we are also responsible for marine navigation up to two lakh nautical miles in Arabian Sea and Bay of Bengal.
Tell us about the financial health of AAI?
As I said already, being a PSU, we don’t go necessarily by the profit motive. Regarding surplus revenue over expenditure, only 10-12 out of total 125 operational airports under AAI are in profit. We are looking towards alternative models for revenue generation like city side development of airports, retail shops inside the airports, cargo services, and various quality services for passengers.
There are some airports made purely due to political reasons particularly in the Lok Sabha constituencies and hometowns of former ministers and politicians. What do you have to say about those?
The airports in good condition and potential air traffic will automatically be included in our Regional Connectivity Scheme (RCS) as private airlines foresee a market opportunity. There may be some airports which will have to wait. Right now there is no plan for such airports.
GMR, the concessionaire of Delhi and Mumbai Airports, is accused of charging excess amount in the name of ‘user fee’. What is your stand on this issue?
All the charges including user fees are very much regulated and determined by the Airports Economic Regulatory Authority (AERA). It follows a very structured policy for determination of all the nautical and non-nautical charges to be levied under various categories on 23 major airports of the country including Delhi and Mumbai. The final decision involves submission of the petition by the concessionaire followed by hearing from all the stakeholders and the decision is made keeping in view financial viability and consumers’ interests. So there is no chance of extra charging or overcharging. There is a well-placed mechanism for the aggrieved parties/persons to get their grievances addressed.
There are talks that the government is going for privatisation of airports after giving its approval for Jaipur and Ahmedabad airports. What are the plans of AAI to compete with private players?
It is not privatisation like Delhi and Mumbai airports. The government has approved only ‘operation and maintenance of terminal buildings’ at these two airports – Jaipur and Ahmedabad. It is utilising the expertise of private players in improving the con- sumer facilities at airports to satisfy customer expectations through outsourcing. This outsourcing is strictly confined to consumer and airport interface which includes arrival of passengers at the airport terminal, check in, waiting, public conveniences, maintenance of restrooms, shopping experiences, eating experiences, and queuing experiences, etc. Furthermore, this outsourcing is only for ten years. In the second and third years of the operation, we will assess the performance, learn lessons and go for an alternative model, if required.
What is AAI doing to improve these at other airports? Is there is any alternative model?
We are implementing a welldesigned project called DISHA (Delivering Improvements in Service and Hospitality at Airports) at ten airports in the country. This includes improvement in cleanliness, efficient utilisation of space; reduce check-in time, shopping experiences, sitting facilities, restrooms, and toilets in a way to provide five-star experience to the passengers at airports. We have developed a new model of engaging contractors which gives high priority to quality of service over cost.
It is believed that just a few airlines which applied under Regional Connectivity Scheme (RCS) have deposited money. What is the reality?
Investment from the private sector is never motivated by charity. They always look for sound business opportunities coupled with sustainable, durable and long term businesses interests. Earlier, there was no way to ask a private airline to start services for any new airport which are under the un-served and underserved category. RCS is a promotional scheme to attract private airlines to start regular services at un-served and underserved airports of the country. We are overcoming the hurdles and going to launch the scheme by mid-february or early March at some airports.
AAI, Central, Government and State Governments have come on board to provide massive tax concessions and tax benefits for RCS including subsidised fuel for aircraft, apart from no excise tax, no VAT, no service tax, free fire and police service, waiving off user charges at airports, etc. In the first phase, we have received 43 initial proposals from 11 airlines covering 190 UDAN routes. The interested airlines will have to invest only in aircraft and aircrew. We hope we will be able to attract private airlines and make the scheme a historic success.
AAI, Central, Government and State Governments have come on board to provide massive tax concessions and tax benefits for RCS including subsidised fuel for aircraft, apart from no excise tax, no VAT, no service tax, free fire and police service, waiving off user charges at airports