IN­NO­VA­TION TO THE FORE

Air traf­fic in In­dia jumped 26.6 per cent year-on-year in Jan­uary, which was also the 15th con­sec­u­tive month to record 20 per cent-plus an­nual growth. The In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA) ex­pects In­dia to dis­place UK as the third-largest avi

SP's Airbuz - - Table of Contents -

Paris Air Lab is a board­ing pass to the fu­ture. It’s a new space to­tally de­voted to map­ping what the aero­space sec­tor and more broadly to­mor­row’s world have in store.

Neetu Dhu­lia (SP’s): With the gov­ern­ment’s ag­gres­sive plans of re­mote and re­gional con­nec­tiv­ity, how has the role or fo­cus of the Air­ports Au­thor­ity of In­dia (AAI) changed in the re­cent years? Dr Guruprasad Mohapatra (Mohapatra): The Min­istry of Civil Avi­a­tion (MoCA) has launched the Re­gional Con­nec­tiv­ity Scheme (RCS) – UDAN – in Oc­to­ber 2016 to pro­mote re­gional air con­nec­tiv­ity in the coun­try. The fo­cus of the gov­ern­ment is to re­vive un­served and un­der­served air­ports in the coun­try and to pro­vide air con­nec­tiv­ity to re­motely lo­cated ar­eas in the coun­try. For im-

ple­men­ta­tion of RCS, AAI has been ap­pointed as the Im­ple­ment­ing agency. The role of AAI is to in­vite pro­pos­als from the var­i­ous air­line op­er­a­tors through a trans­par­ent e-bid­ding sys­tem and take nec­es­sary ac­tion for se­lec­tion of the air­line op­er­a­tors as per pro­ce­dures de­tailed in the RCS doc­u­ment. AAI is also re­spon­si­ble for col­lec­tion of RCS levy and dis­burse­ment of the Vi­a­bil­ity Gap Fund­ing (VGF) to se­lected air­line op­er­a­tors.

In ad­di­tion to the above, the Cabi­net Com­mit­tee on Eco­nomic Af­fairs has ap­proved the pro­posal for re­vival of 50 un­served/un­der­served air­ports/airstrips of the state gov­ern­ments, Air­ports Au­thor­ity of In­dia and Civil En­claves at an es­ti­mated cost of ` 4,500 crore, in three fi­nan­cial years start­ing from 2017-18. How­ever, re­vival of airstrips/air­ports will be ‘de­mand driven’, de­pend­ing upon firm com­mit­ment from air­line op­er­a­tors as well as from the state gov­ern­ments for pro­vid­ing var­i­ous con­ces­sions as air­ports will be de­vel­oped without in­sist­ing on fi­nan­cial vi­a­bil­ity. AAI will be the im­ple­ment­ing agency for de­vel­op­ment of these air­ports for which it will en­ter into a mem­o­ran­dum of un­der­stand­ing with the con­cerned state gov­ern­ments.

SP’s: Could you give de­tails of num­ber of AAI air­ports which are op­er­a­tional and how many more would be­come op­er­a­tional in 2017-18? Mohapatra: The Air­ports Au­thor­ity of In­dia owns/man­ages 126 air­ports in the coun­try, in­clud­ing 26 civil en­claves at de­fence air­ports. Out of these, 96 air­ports are op­er­a­tional and sched­ule flights ser­vices are op­er­at­ing from 72 air­ports. The list of op­er­a­tional air­ports is given in An­nex­ure-I.

An­other 24 op­er­a­tional air­ports where sched­uled op­er­a­tions can be started without any ma­jor ren­o­va­tion are shown in An­nex­ure-II.

Be­sides this fol­low­ing AAI air­ports are likely to be made op­er­a­tional by 2017-18:

Kis­hana­garh in Rajasthan

Tezu in Arunachal Pradesh

Paky­ong in Sikkim.

SP’s: What will be the ap­proach for AAI to make them op­er­a­tional, to take the PPP route or to run the air­ports your­self or mixed ap­proach, and the rea­sons for the same? Mohapatra: AAI is plan­ning to re­vive non-op­er­a­tional air­ports un­der RCS with the fi­nan­cial sup­port of MoCA/GoI and PPP model is not taken up as the same is com­mer­cially not vi­able.

SP’s: It is pre­sumed that these air­ports will be low-cost air­ports. Could you in­di­cate how much it would cost to build such air­ports? Mohapatra: The cost of such no-frill air­ports will range from ` 23 crore to ` 44 crore. We have de­signed some low-cost mod­els for such air­ports, ex­clud­ing the cost of land and lev­el­ing.

SP’s: Some of the AAI air­ports such as Chen­nai are near­ing sat­u­ra­tion, what are the plans for such air­ports? Mohapatra: Ad­vance plan­ning and ex­e­cu­tion are car­ried out for ex­pan­sion and aug­ment the ex­ist­ing ca­pac­ity. Wher­ever re­quired, land is sought from the re­spec­tive state gov­ern­ment in ad­vance.

For aug­men­ta­tion of ca­pac­ity at Chen­nai airport, the fol­low­ing pro­pos­als are planned on fast pace.

Old ter­mi­nal build­ings T-2 and T-3 are pro­posed to be re­con­structed with ul­tra­mod­ern In­te­grated Ter­mi­nal Build­ing to en­hance the to­tal pas­sen­ger han­dling ca­pac­ity from 23 mppa to 30 mppa and be­yond.

AAI has ap­pointed AECOM as project man­age­ment con­sul­tant (PMC) in Fe­bru­ary 2017 with fol­low­ing project sched­ule:

Sub­mis­sion of DPR-06.09.17

Ap­proval of PIB-6.09.17

Prepa­ra­tion of De­tailed T/S-20.09.2017Award of work-31.01.18

Straight­en­ing of ‘B’ par­al­lel taxi track with 2 nos. Rapid exit taxi­ways (RETs) is also be­ing taken up to en­hance op­er­a­tional ef­fi­ciency.

Con­struc­tion of Cer­e­mo­nial Lounge presently housed in Old Ter­mi­nal Build­ing to fa­cil­i­tate straight­en­ing of B par­al­lel tax­i­track. Fur­ther, the Min­istry is in touch with the state gov­ern­ment to ex­plore the op­tion of de­vel­op­ing an­other airport near Chen­nai.

SP’s: What are the plans of pri­vatis­ing air­ports? Pri­vati­sa­tion of air­ports in the past have helped AAI gen­er­ate ex­cep­tional rev­enues? Mohapatra: The mat­ter re­gard­ing pub­lic-pri­vate part­ner­ship ini­tia­tives at air­ports, were de­lib­er­ated at length when four air­ports at Chen­nai, Kolkata, Ahmedabad and Jaipur were con­sid­ered for op­er­a­tion, main­te­nance and de­vel­op­ment through PPP.

The ex­pe­ri­ence of PPP of Delhi and Mumbai and con­se­quent in­crease in rev­enue share to AAI which was used by AAI in de­vel­op­ment of the AAI air­ports were also dis­cussed. The pros and cons of the PPP were dis­cussed, in­clud­ing the views ex­pressed against pri­vati­sa­tion of these four air­ports by the Par­lia­men­tary Stand­ing Com­mit­tee on Trans­port. Fur­ther, the non-aero rev­enue earned by these four air­ports were also dis­cussed and the cap­i­tal in­vest­ment in upgra­da­tion of four air­ports were also con­sid­ered.

Con­sid­er­ing the above fac­tors, it was de­cided that AAI will en­sure high stan­dards of ser­vice by en­ter­ing into O&M con­tracts, ei­ther with or without the re­spon­si­bil­ity of max­imi­sa­tion of non­aero­nau­ti­cal rev­enue in the ter­mi­nal build­ing (ex­clud­ing land on

“THE AIR­PORTS AU­THOR­ITY OF IN­DIA OWNS/MAN­AGES 126 AIR­PORTS IN THE COUN­TRY, IN­CLUD­ING 26 CIVIL EN­CLAVES AT DE­FENCE AIR­PORTS”

city side or air side) at Ahmedabad and Jaipur air­ports. The city side and air side will con­tinue to be man­aged di­rectly by AAI at these air­ports. As re­gards the air­ports at Chen­nai and Kolkata are con­cerned the decision for them may be taken after gain­ing ex­pe­ri­ence from the present pro­posal.

In view of the above decision, AAI ini­ti­ated Global Bid­ding Process for O&M of se­lect ar­eas of Ahmedabad and Jaipur air­ports to re­ceive bids from renowned airport op­er­a­tors for O&M ar­range­ment and is­sued the re­quest for pro­posal for op­er­a­tion and main­te­nance of ‘se­lect ar­eas’ of Sar­dar Val­lab­h­bai Patel In­ter­na­tional Airport at Ahmedabad, Gu­jarat and Jaipur In­ter­na­tional Airport. Ac­cord­ingly, the process of award­ing O&M con­tract for se­lect area of Ahmedabad and Jaipur air­ports through open com­pet­i­tive bid­ding process is un­der process.

SP’s: Could you up­date on the cen­trally con­trolled air traf­fic flow man­age­ment C-ATFM)? What are the ben­e­fits of the sys­tem for air­line? Mohapatra: The C-ATFM sys­tem is pri­mar­ily meant to ad­dress the bal­anc­ing of ca­pac­ity against the de­mand to achieve op­ti­mum util­i­sa­tion of the ma­jor re­sources, viz., airport, airspace and air­craft at ev­ery In­dian airport where there is a ca­pac­ity con­straint. The C-ATFM sys­tem in­te­grates flight data from var­i­ous sources across the coun­try. The sys­tem is also pro­vided with up­dates on airport ca­pac­ity, weather and avail­abil­ity of airport sys­tems, etc. The sys­tem pro­cesses the air traf­fic de­mand and airport ca­pac­ity in­for­ma­tion and pro­vides in­di­ca­tions to the ATFM flow man­ager on any fu­ture air traf­fic con­ges­tions. The ATFM flow man­ager col­lab­o­rates with all stake­hold­ers like air­lines and airport op­er­a­tors and im­ple­ments ATFM reg­u­la­tions to en­sure reg­u­lated flow of traf­fic at such con­strained airport. The air­craft which are bound for the con­strained air­ports, are al­lot­ted a time for de­part­ing from a de­par­ture airport and are held on ground till the al­lot­ted time. This de­lay on ground re­duces the de­lay in air and hence greatly re­duces the fuel con­sump­tion of air­lines.

The C-ATFM sys­tem con­sists of a Cen­tral Com­mand and Con­trol Cen­tre (CCC) which will be the nodal cen­tre for ATFM im­ple­men­ta­tion in In­dia. AAI is con­duct­ing stake­hold­ers meet­ings with all air­lines, airport op­er­a­tors and the Direc­torate Gen­eral of Civil Avi­a­tion (DGCA) to ar­rive at con­sen­sus for com­mon busi­ness rules and op­er­at­ing pro­ce­dures. The first phase of ATFM op­er­a­tions are planned from May 2017. C-ATFM will pro­vide huge ben­e­fits to the air­lines in form of: Re­duced fuel burn Re­duced cost of op­er­a­tions More pre­dictabil­ity – De­lay will be known in ad­vance Trans­par­ent process of shar­ing the in­for­ma­tion Air­lines will also be a part­ner in decision mak­ing.

SP’s: What are the new non-aero rev­enue streams that air­ports should look at to shore up rev­enues and bring down costs for air­line op­er­a­tors? Mohapatra: i. Non-aero­nau­ti­cal rev­enue streams to in­crease AAI rev­enue

Master con­ces­sion­aire with rev­enue shar­ing model for food and bev­er­ages and re­tail out­lets at 12 air­ports, in­clud­ing Am­rit­sar, Goa, Guwahati, Luc­know, Srinagar, Trichi, Bhubaneswar, Raipur, In­dore and Cali­cut have al­ready been de­signed on ap­prox­i­mately 15,042 square me­tres area, which will gen­er­ate march­ing ex­tra rev­enue from these cat­e­gories. RFP for these fa­cil­i­ties have al­ready been in­vited.

New for­mu­la­tions on ad­ver­tise­ment li­cence have been de­signed with busi­ness friendly terms and con­di­tions. New ten­der with this im­proved modal­i­ties has been ini­ti­ated, which may re­sult in im­proved am­biance at air­ports and en­hanced rev­enue.

Li­cences for new fa­cil­i­ties, namely duty paid liquor out­let, vend­ing ma­chine, duty free su­per mar­ket, duty free fash­ion ac­ces­sories and ex­tra bag­gage han­dling li­cences have been ini­ti­ated with larger space and with rev­enue share model.

Value as­sess­ment for re­main­ing air­ports is un­der process and will gen­er­ate ad­di­tional rev­enue from air­ports hav­ing less than 0.5 mil­lion pas­sen­ger per an­num.

Ef­forts are be­ing made to achieve tar­get of 27 per cent non­traf­fic rev­enue for the year 2016-17, as di­rected by NITI Aayog, against the ex­ist­ing 16-17 per cent.

ii. To bring down cost for air­lines Fi­nan­cial per­for­mance of air­lines de­pends on nu­mer­ous pa­ram­e­ters, which is be­yond the do­main of airport op­er­a­tor. The ma­jor­ity of the op­er­a­tive cost is con­trolled and man­aged by air­lines. Airport re­lated fi­nan­cial im­pact on air­lines is gov­erned by the Air­ports Eco­nomic Reg­u­la­tory Au­thor­ity (AERA) reg­u­la­tions and in­struc­tions/guide­lines of MoCA.

AAI’s en­deav­our is to in­crease/op­ti­mise the non-aero­nau­ti­cal rev­enue gen­er­a­tion, thereby min­imis­ing the fi­nan­cial load to the air­lines/pas­sen­gers. Other fac­tors to bring down the cost for air­lines per­tains to the con­cerned air­lines, which is an in­de­pen­dent en­tity.

SP’s: What role AAI play in help­ing gen­eral avi­a­tion and busi­ness avi­a­tion op­er­a­tors and also cargo, seg­ments which nor­mally get ne­glected? Mohapatra: Gen­eral and busi­ness avi­a­tion: The In­dian avi­a­tion sec­tor is an open, lib­eral and in­vest­ment-friendly sec­tor. “En­try

“EF­FORTS ARE BE­ING MADE TO ACHIEVE TAR­GET OF 27 PER CENT NON-TRAF­FIC REV­ENUE AS DI­RECTED BY NITI AAYOG”

of low-cost car­ri­ers, higher house­hold in­comes, strong eco­nomic growth, in­creased for­eign di­rect in­vest­ment (FDI) in­flows, surg­ing tourist in­flow, in­creased cargo move­ment, sus­tained busi­ness growth and sup­port­ing gov­ern­ment poli­cies are the ma­jor driv­ers for the growth of the avi­a­tion sec­tor in In­dia.”

The MoCA frames na­tional poli­cies and pro­grammes for the de­vel­op­ment and reg­u­la­tion of civil avi­a­tion in the coun­try; de­vis­ing and im­ple­ment­ing schemes for or­derly growth and ex­pan­sion of civil air trans­port; and over­see­ing the pro­vi­sion of airport fa­cil­i­ties, air traf­fic ser­vices and car­riage of pas­sen­gers and goods by air.

The re­spon­si­bil­ity of de­vel­op­ing, fi­nanc­ing, op­er­at­ing and main­tain­ing all gov­ern­ment air­ports in the coun­try rests with the AAI, which was es­tab­lished in 1994 un­der the Air­ports Au­thor­ity Act. AAI has also en­tered into op­er­a­tions man­age­ment and de­vel­op­ment agree­ments with Delhi and Mumbai and also with green field air­ports, viz Ben­galuru, Hyderabad and Cochin in­ter­na­tional air­ports.

The in­tro­duc­tion of low-cost air­lines, cou­pled with ris­ing dis­pos­able in­comes in the coun­try, has re­sulted in sub­stan­tial growth in do­mes­tic pas­sen­ger traf­fic. Some of the poli­cies and pro­mo­tions be­ing of­fered by In­dian Gov­ern­ment to the civil avi­a­tion sec­tor are: Do­mes­tic air­lines are al­lowed to fly over­seas and forge part­ner­ships with for­eign car­ri­ers, while for­eign car­ri­ers, in turn, have been in­ter­lin­ing with do­mes­tic air­lines to ac­cess sec­ondary des­ti­na­tion(s). AAI, within the frame­work of MoCA and its re­cently in­tro­duced Na­tional Civil Avi­a­tion Pol­icy 2016 (NCAP), ex­tends in­clu­sive help­ing arms to all kind of gen­eral avi­a­tion (GA) in­clud­ing all civil­ian fly­ing, busi­ness travel, agri­cul­tural avi­a­tion, flight train­ing, aerial fire­fight­ing, med­i­cal trans­port, aerial map­ping, pipe­line pa­trol, aerial law en­force­ment, sight­see­ing, search and res­cue, per­sonal travel, recre­ational fly­ing, busi­ness use of air­planes and he­li­copters, etc. Sim­i­larly, to the busi­ness avi­a­tion, where the air trans­port op­tion tai­lored to the spe­cific needs of com­pany ex­ec­u­tives for ef­fi­cient, pro­duc­tive and se­cure busi­ness travel to ac­com­mo­date sched­ules and reach des­ti­na­tions not com­pat­i­ble with the lim­i­ta­tions set by com­mer­cial air­line itin­er­ar­ies. Air Cargo Seg­ment: With more and more high-den­sity traf­fic air­ports go­ing into the hands of pri­vate play­ers, AAI is now fo­cus­ing on the cargo seg­ment to boost its rev­enues and ven­tur­ing into the new area of do­mes­tic cargo op­er­a­tions with an ob­jec­tive to cre­ate the ba­sic in­fra­struc­ture at its air­ports which have po­ten­tial for air cargo growth. As part of this, AAI plans to op­ti­mally utilise its old re­dun­dant/un-utilised do­mes­tic pas­sen­ger ter­mi­nals by con­vert­ing them into cargo fa­cil­i­ties after car­ry­ing out the nec­es­sary mod­i­fi­ca­tions.

There has been tremen­dous growth of air cargo at metro/non­metro air­ports with con­sid­er­able scope for im­prove­ment in the ba­sic in­fra­struc­ture to tap the po­ten­tial, ad­ding that “do­mes­tic cargo grew by 8.8 per cent and in­ter­na­tional by 10.5 per cent last year”.

AAI has iden­ti­fied 24 do­mes­tic air­ports across five re­gions, in­clud­ing three civil en­claves, to de­velop such in­te­grated fa­cil­i­ties. AAI is re­quired to ex­plore new av­enues for rev­enue gen­er­a­tion to main­tain its po­si­tion as a Mini-Ratna cat­e­gory-1 en­tity and it is also look­ing to in­ten­sify ef­forts to at­tain Navratna sta­tus.

AAI is ex­pect­ing to wean away from rail and road trans­port after the air cargo op­er­a­tions take off in full swing. These fa­cil­i­ties have al­ready com­menced at 18 AAI air­ports till date. There are plans to repli­cate the same model at other air­ports as well, be­sides the 24 which have been iden­ti­fied based on cargo po­ten­tial.

In ad­di­tion to above, AAI has been un­der­tak­ing the in­ter­na­tional cargo han­dling op­er­a­tions at Chen­nai, Kolkata, Luc­know, Coim­bat­ore, Trichy, Am­rit­sar, Guwahati, In­dore and Man­ga­lore air­ports, and de­part­men­tally at Tri­van­drum, Varanasi, Bag­do­gra, Bhubaneswar, Cali­cut, Visakha­p­at­nam, Jaipur, Ahmedabad, and Goa air­ports through O&M model and plan­ning to com­mis­sion sim­i­lar op­er­a­tions at Au­rangabad, Madu­rai and Pune air­ports.

In order to give spe­cial fo­cus to cargo, AAI has re­cently formed a 100 per cent owned sub­sidiary of AAI namely AAI Cargo Lo­gis­tics and Al­lied Ser­vices Com­pany Lim­ited (AAICLAS). The sub­sidiary com­pany came into ex­is­tence in Au­gust 2016 and will, hence­forth, un­der­take all cargo and ground han­dling re­lated ac­tiv­i­ties at AAI man­aged air­ports. The com­pany will also fo­cus on air cargo han­dling and al­lied ser­vices, ware­hous­ing and con­tract lo­gis­tics and air cargo road feeder and air freight sta­tions. The for­ma­tion of AAICLAS has given an im­pe­tus to the air cargo de­vel­op­ment ac­tiv­i­ties at AAI air­ports with a fresh out­look and fo­cused at­ten­tion.

AAI has al­ways been in the fore­front and pi­o­neer in cre­at­ing state-of-the air cargo in­fra­struc­ture and cargo fa­cil­i­ties for pro­mo­tion of air cargo in­ter-alia al­ways in the ser­vice of the na­tion to fa­cil­i­tate re­gional de­vel­op­ment of AAI air­ports on pan-In­dia ba­sis.

SP’s: Please tell us some of the ma­jor ini­tia­tives you have ini­ti­ated as Chair­man-cum- Man­ag­ing Di­rec­tor and what is your vi­sion for AAI? Mohapatra: Keep­ing in view the resur­gence of air traf­fic in the coun­try and to meet the grow­ing de­mand, the fo­cus will be to­wards aug­men­ta­tion of ca­pac­ity in air space and the air­ports both at air side and city side. The road map and the ac­tion plan for de­vel­op­ment of airport and ANS in­fra­struc­ture to aug­ment ca­pac­ity are in place. AAI have made an ac­tion plan for cre­ation of in­fra­struc­ture by in­vest­ing ` 17,800 crore for the next five years.

The projects will take off in phased man­ner as per the plans. It is our en­deavor to see In­dia at the pin­na­cle of avi­a­tion in­dus­try both in terms of size of the in­dus­try and with re­spect to qual­ity of air ser­vices and the cus­tomer sat­is­fac­tion. We have ini­ti­ated sev­eral im­prove­ment pro­grammes at the airport to sig­nif­i­cantly en­hance pas­sen­ger ex­pe­ri­ence at par with global stan­dards. My en­deav­our is to make AAI the world leader in the field of airport op­er­a­tion and Air Nav­i­ga­tion Ser­vices (ANS) and one of the ma­jor player in the avi­a­tion world within Asia-Pa­cific re­gion. The aim is to­wards cre­at­ing an in­te­grated ecosys­tem with sup­port of Gov­ern­ment of In­dia to make fly­ing af­ford­able for the masses with traf­fic touch­ing 50 crore do­mes­tic pas­sen­gers, 20 crore in­ter­na­tional pas­sen­gers and 10 mil­lion tonnes cargo per an­num by 2027.

AAI is adopt­ing mea­sures to pro­vide en­vi­ron­ment friendly sus­tain­able air­ports and op­er­a­tions at the air­ports through green ini­tia­tives in ANS like C-ATFM, im­ple­men­ta­tion of RNAV-ATS routes in en route phase, Im­ple­men­ta­tion of ap­proach pro­ce­dures with GNSS such as Baro-V, GAGAN-based LPV pro­ce­dures that fa­cil­i­tates lesser fuel burn thereby help­ing lesser car­bon emis­sions. Use of so­lar green en­ergy is be­ing en­cour­aged. Sev­eral so­lar power plants have been op­er­a­tionalised and are in pipe­line to pro­vide green en­ergy. AAI fur­ther plans to im­prove the fi­nan­cial vi­a­bil­ity of the air­ports at Tier-II and Tier-III cities for which we plan to im­prove the non-aero­nau­ti­cal rev­enue through com­mer­cial ac­tiv­i­ties in the ter­mi­nal and city side.

Fur­ther AAI will pro­vide lo­gis­ti­cal and tech­ni­cal sup­port to the state gov­ern­ments for bring­ing up green­field air­ports and will re­vive/op­er­a­tionalise AAI/state gov­ern­ment air­ports un­der RCS.

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