In­dia's Boom­ing Avi­a­tion Sec­tor Will Boost CE In­dus­try

With In­dia's avi­a­tion mar­ket ex­pand­ing at a fast pace, plans are afoot to in­crease the num­ber of air­ports from the cur­rent 100 to 200 by 2035; this will open up huge busi­ness op­por­tu­ni­ties for the con­struc­tion sec­tor.


With In­dia's avi­a­tion mar­ket ex­pand­ing at a fast pace, plans are afoot to in­crease the num­ber of air­ports which will open up huge busi­ness op­por­tu­ni­ties for the con­struc­tion sec­tor

In­dia has wit­nessed a six-fold in­crease in pas­sen­gers over the past decade due to bet­ter con­nec­tiv­ity and cheaper fares. Global con­sul­tancy and re­search firm Cen­tre for Asia Pa­cific Avi­a­tion (CAPA) re­vealed in its re­cent re­port that In­dian air­ports han­dled 265 mil­lion pas­sen­gers in the do­mes­tic cir­cle in 2016, which is ex­pected to cross 300 mil­lion in 2018. Ac­cord­ing to the Direc­torate Gen­eral of Civil Avi­a­tion (DGCA), In­dia is poised to be­come the world’s third-largest mar­ket for air pas­sen­gers by 2025, and it will have 478 mil­lion fliers by 2036, re­quir­ing an in­vest­ment of $45 bil­lion.

In­fra­struc­ture deficit

Though the bur­geon­ing mid­dle-class has added to the boom in air trav­el­ling, the coun­try lacks the re­quired in­fra­struc­ture. As re­ported by CAPA, in the next five to seven years, the top 30-40 air­ports in In­dia will be per­form­ing be­yond their ca­pac­i­ties. As of now, 10 air­ports in In­dia, in­clud­ing Dehradun, Jaipur, Guwahati, Man­ga­lore, Srinagar, and Pune, are oper­at­ing much be­yond their ca­pac­ity and many more will soon cross their limit.

The avi­a­tion body pre­dicts that IGI Air­port in New Delhi and the Intl ‘Air­port in Chennai will reach their ca­pac­ity in the next five to six years. The sit­u­a­tion is likely to be­come more alarm­ing at the Ch­ha­tra­p­ati Shivaji In­ter­na­tional Air­port (CSIA) in Mum­bai, which is cur­rently func­tion­ing at 94% of its ca­pac­ity. The air­port broke its own world record when it han­dled 1000 flights both ways, on a sin­gle run­way, in 24 hours.

Pol­icy ini­tia­tives

The Air­ports Au­thor­ity of In­dia (AAI) plans to for­mu­late a new na­tional air­port de­vel­op­ment strat­egy and is fram­ing new con­ces­sion agree­ments to fa­cil­i­tate the grow­ing pas­sen­ger traf­fic. AAI is also pre­par­ing to launch mega projects for the con­struc­tion of new ter­mi­nal build­ings at 14 aero­dromes this year, in­formed AAI chair­man, Gu­ruprasad Mo­ha­p­a­tra. While out­lin­ing the lat­est ini­tia­tives for this year, he said that ‘air­ports/ter­mi­nal build­ings’ are likely to be ready at five places: Jhar­sug­uda (Odisha), Tezu (Arunachal Pradesh), Cali­cut (Kerala), Go­rakh­pur (Ut­tar Pradesh) and Paky­ong (Sikkim). Con­struc­tion of the "mega projects" of new ter­mi­nal build­ings is also be­ing taken up at Guwahati, Leh, Patna, Trichy, Vi­jayawada, Ja­balpur, Ahmed­abad, Chennai, Srinagar, Pune, Lucknow, Man­ga­lore, Dehradun, and Jaipur. AAI is also set to play a ma­jor role in ready­ing air­ports un­der the re­gional con­nec­tiv­ity scheme (Ude Desh ka Aam Na­grik) (UDAN), that seeks to make op­er­a­tional the un-served and un­der-served aero­dromes to make fly­ing more af­ford­able.

Un­der UDAN, air travel to In­dia's non­met­ros and re­mote ar­eas has be­come more af­ford­able. The con­cept has been

ex­pand­ing to var­i­ous states and putting smaller cities and far flung re­gions on the avi­a­tion radar. The Fi­nance Min­istry has al­lo­cated ₹1,014.09 crore for UDAN.

Up­com­ing Air­ports

In­dia has wit­nessed phe­nom­e­nal growth of 18 to 20% in the avi­a­tion sec­tor in the last three years. The Gov­ern­ment has launched a new ini­tia­tive of NABH Nir­man (Nex­tGen Air­ports for Bharat), wherein sys­tems and pro­cesses are be­ing geared up to en­hance air­port ca­pac­ity.

The Avi­a­tion Min­istry has ap­proved 100 new air­ports which will be built in the next 15 years at an es­ti­mated cost of ₹4 lakh crore. Among them, 70 will be at new lo­ca­tions while the rest will in­volve up­grad­ing and ex­pan­sion of the ex­ist­ing airstrips. The Avi­a­tion Min­istry has given ap­proval for new air­ports at Mopa in Goa, Navi Mum­bai, Shirdi and Sind­hudurg in Ma­ha­rash­tra, Bi­japur, Gul­barga, Hasan and Shi­moga in Kar­nataka, Kannur in Kerala, Paky­ong in Sikkim, Karaikal in Puducherry, Dholera in Gu­jarat, and Bhoga­pu­ram in Andhra Pradesh.

The Cen­ter has given in-prin­ci­ple ap­proval for the con­struc­tion of a green­field air­port near Je­war in Gau­tam Budh Na­gar on the out­skirts of Delhi. The DPR and the techno-eco­nomic fea­si­bil­ity re­port of the project, pre­pared by Price Water­house Coop­ers, en­vis­ages ac­qui­si­tion of 1,441 hectares of land in eight vil­lages. The project will be built on the PPP model in a phased man­ner, with an in­vest­ment of about ₹15,754 crore. The air­port will have two run­ways; ca­pac­ity to han­dle 70 mil­lion pas­sen­gers per an­num; and a cargo han­dling ca­pac­ity of three mil­lion met­ric tons per an­num. The Ya­muna Ex­press­way In­dus­trial De­vel­op­ment Au­thor­ity (YEIDA) is the nodal agency for this project.

The gov­ern­ment has also ap­proved a pro­posal to build new ter­mi­nals in the air­ports of Chennai, Guwahati and Lucknow at a cost of ₹5,082 crore. The new ter­mi­nal at Chennai air­port will have a ca­pac­ity to han­dle 35 mil­lion pas­sen­gers per an­num and will meet growth re­quire­ment till 2027. Stretch­ing across 3,36,000 sqm., it will in­cor­po­rate green build­ing fea­tures for achiev­ing GRIHA-4 Star rat­ing.

The ter­mi­nal at the Lucknow air­port will have an area of 88,000 sq m with a ca­pac­ity to han­dle 13.6 mil­lion pas­sen­gers a year and will cater to the growth re­quire­ments up to 2030-31 with fa­cil­i­ties to han­dle 2.6 mil­lion in­ter­na­tional and 11 mil­lion do­mes­tic pas­sen­gers. The new ter­mi­nal build­ing at Guwahati air­port will have an area of 1,02,500 sqm to han­dle a com­bined an­nual ca­pac­ity of 9 mil­lion pas­sen­gers and will cater to pas­sen­ger growth re­quire­ments up to 2026-27.

Un­der the re­gional con­nec­tiv­ity scheme, Ut­tar Pradesh got 9 out of 25 routes fi­nal­ized by the Cen­tre. Nine more op­er­a­tional air­ports will come up in Ali­garh, Aza­m­garh, Bareilly, Chi­trakoot, Jhansi, Mo­rad­abad, Myur­pur (Sonbhadra), Al­la­habad and Shravasti in 15 months.

In­no­va­tive ap­proach

The Lal Ba­hadur Shas­tri (LBS) In­ter­na­tional Air­port in Ba­bat­pur (26 km from Varanasi), will soon be­come the coun­try’s first air­port to have a na­tional high­way run­ning be­low its run­way. The un­der­pass will be de­vel­oped to en­sure ex­pan­sion of the air­port’s run­way for land­ing of big planes. This was an­nounced by NHAI project di­rec­tor (Varanasi), S B Singh. With the de­vel­op­ment of the un­der­pass, the is­sue of de­cid­ing the align­ment of NH-56, which is be­ing con­verted into a four-lane road, will be re­solved.

In an­other ma­jor de­vel­op­ment, out of 21 iden­ti­fied na­tional high­ways (NH), the In­dian Air Force has given clear­ance to 12 NHs to dou­ble up as emer­gency land­ing air­fields. Of these, 3 will con­nect to Odisha,

Jhark­hand, and Ch­hat­tis­garh - the most Maoist-af­fected ar­eas and prone to floods and cy­clones. The high­ways will en­able res­cue teams to reach the af­fected ar­eas quickly.

In fact, IAF wants the new high­ways to be built such as to also serve as run­ways for its war­planes in times of cri­sis. For the re­main­ing NHs, dis­cus­sions and tests are cur­rently un­der­way, and are likely to be cleared by the IAF.

The In­dian Air Force, after re­search and iden­ti­fi­ca­tion of lo­ca­tions for roads and por­ta­ble lo­gis­tics sup­port, has shaped up its am­bi­tious project of con­struct­ing these emer­gency airstrips in im­por­tant sec­tors, in ad­di­tion to the ex­ist­ing 53 air­fields across the coun­try. It may be re­called that in 2015, the IAF had staged a ‘Mi­rage 2000’ fighter on the Ya­muna Ex­press­way to see if the plan to use high­ways as run­ways would work or not, and days later two com­bat planes landed on an airstrip in Saifai vil­lage of Etawah district in Ut­tar Pradesh.

Air­ports add to realty ac­tiv­i­ties

The pres­ence of an air­port en­hances a city's im­age as a busi­ness des­ti­na­tion, thus in­creas­ing de­mand for res­i­den­tial and com­mer­cial real es­tate. A case in point is the up­com­ing Je­war In­ter­na­tional Air­port in Greater Noida, where Shapoorji Pal­lonji Con­struc­tion re­cently de­cided to de­velop a world-class global city. Shortly after that, the Haryana gov­ern­ment also an­nounced a Global City to be built in over 1,000 acres in Gur­gaon on the out­skirts of the IGI air­port in Delhi.

Greater com­mer­cial ac­tiv­ity in a lo­cal­ity leads to higher job gen­er­a­tion, re­sult­ing in in­creased de­mand for com­mer­cial prop­erty and rental hous­ing. Else­where in the coun­try, ex­pect­ing the ar­rival of new air­ports in their ar­eas, real es­tate de­vel­op­ers have started in­vest­ing heav­ily around these cities.

In view of the on­go­ing and up­com­ing de­vel­op­ment ac­tiv­i­ties, the out­look for In­dia's con­struc­tion equip­ment sec­tor is very pos­i­tive and its growth set to be in­cred­i­bly strong in the long-term. As if there is con­struc­tion, than def­i­nitely there would be de­mand for con­struc­tion ma­te­ri­als and equip­ment.

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