Airport Sector Overview
The expansion of India’s airport sector is crucial to ensuring seamless connectivity for both domestic and international travellers. Airports have evolved into global growth hubs. Apart from providing basic transportation from one location to another, airports today provide enormous potential for businesses to interact and thrive. The development of airports in India is accelerating.The Government of India is leaving no stone unturned to expand the airport network covering not just in the Tier-I cities but even taking steps to construct airports in Tier-2 and Tier-3 towns and cities. The aim is to improve air connectivity as well as make it affordable for the common man. The development of the airport serves as a catalyst for the broader economic development of the area in which it is located, resulting in the creation of jobs, increased industrial activities, and promote tourism. The greenfield airport development will see an investment of ₹2.3 trillion between FY2023-30. Sandeep Sharma takes a look at the opportunities available in the airport development sector in India.
REVIVAL IN SIGHT
India’s air travel demand grew at an 11 percent compound annual growth rate (CAGR) from FY16 to FY20, owing mostly to increased domestic air travel. However, Covid-19 pandemic had a negative influence on airport business, leading in an 85% drop in international traffic and a 60% drop in domestic travel in FY21. In the year 2021, the Indian government took a number of steps to boost the Indian aviation sector, including airport privatisation, modernization, and expansion, a boost to the regional connectivity scheme UDAN, incentivizing maintenance, repair, and overhaul (MRO) operations, and the disinvestment of Air India. According to a recent Economic Survey report, the Indian aviation sector has begun to recover as a result of the rapid roll-out of the Covid-19 vaccination and the easing out of worldwide travel restrictions. India’s domestic traffic has more than doubled, from about 61 million in 2013-14 to around 137 million in 2019-20, a year-on-year increase of more than 14%.
ATTRACTING INVESTMENT
Airports are upgraded/modernized on a regular basis by the Airports Authority of India (AAI) and other Airport Developers, depending on land availability, commercial feasibility, socio-economic considerations, traffic demand, and airline willingness to operate to/from such airports. AAI has embarked on a CAPEX plan to develop/upgrade/modernize various airports across the country to meet the demand for air traffic, which includes new Greenfield airports, expansion/modification of existing terminals, new terminals, expansion/strengthening of existing runways, aprons, and Air Navigation Services (ANS) works such as control towers, technical blocks, and so on. According to the FDI Policy, 100 percent FDI is allowed in scheduled air transport services/domestic scheduled passenger airlines (automatic up to 49 percent and government routes beyond 49 percent), subject to sectoral and other requirements. The Airports Authority of India (AAI) and other airport developers have set a capital outlay target of ₹91000 crore in the next five years for expansion and renovation of existing terminals, new terminals, and runway reinforcement, among other things.
AIRPORT MONETIZATION
The Airports Authority of India (AAI) has awarded six airports, namely Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru, for Operations, Management, and Development to the highest bidder, M/s Adani Enterprises Limited (AEL), under the Public Private Partnership (PPP) mode for a lease period of 50 years in order to improve efficiency and performance, service quality, encourage greater investment, and reduce government influence. The Centre has handed over the management of 6 airports including Lucknow, Ahmedabad, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram to private parties under the PPP model. In addition, in 2006, AAI leased Delhi and Mumbai Airports to M/s Delhi International Airport Limited and M/s Mumbai International Airport Limited, respectively, for operations, management, and development under a PPP agreement for a period of 30 years. The Centre has further identified 25 airports for monetization in the next 3 years under National Monetization Pipeline. These airports include Bhubaneshwar, Varanasi, Amritsar,Trichy, Indore, Raipur, Calicut, Coimbatore, Nagpur, Patna, Madurai, Surat, Ranchi, Jodhpur, Chennai, Vijayawada, Vadodara, Bhopal, Tirupati, Hubli, Imphal, Agartala, Udaipur, Dehradun and Rajahmundry.
GREENFIELD AIRPORT DEVELOPMENT
The Government of India has so far accorded in-principle approval for setting up of 21 Greenfield Airports across the country under the Greenfield Airports Policy-2008. These airports include Mopa in Goa; Navi Mumbai, Shirdi and Sindhudurg in Maharashtra; Kalaburagi, Bijapur, Hassan and Shimoga in Karnataka; Datia (Gwalior) in Madhya Pradesh; Kushinagar and Noida (Jewar) in Uttar Pradesh; Dholera and Hirasar in Gujarat; Karaikal in Puducherry; Dagadarthi, Bhogapuram and Oravakal in Andhra Pradesh; Durgapur in West Bengal; Pakyong in Sikkim; Kannur in Kerala and Hollongi (Itanagar) in Arunachal Pradesh. Durgapur, Shirdi, Sindhudurg, Pakyong, Kannur, Kalaburagi, Oravakal, and Kushinagar are among the eight airports out of twenty one that have been operationalized.
REGIONAL CONNECTIVITY SCHEME UDAN
On October 21, 2016, the Ministry of Civil Aviation introduced the Regional Connectivity Scheme (RCS) UDAN (Ude Deshka Aam Nagrik) to promote regional air connectivity and make air travel more affordable to the general public. UDAN is a market-driven continuous scheme in which bidding rounds are held on a regular basis to cover more destinations/stations and itineraries. At the time of bidding, interested airlines estimate demand on specific routes connecting these airports and submit offers. UDAN has so far operationalized 403 routes involving 65 airports (including 8 heliports and 02 water aerodromes). Out of 948 authorised routes. Since its inception until 09.01.2022, UDAN flights have carried approximately 86.05 lakh passengers.
DIGI YATRA SCHEME
The Digi Yatra Scheme will be deployed in stages across several airports. In the initial phase, it is planned to go online in 2022 at a few select airports. For interoperability and seamless international travel, the Digi Yatra Central Eco-system is integrated to the global processes of IATA Travel Pass. Air travellers can utilise facial recognition technology to enter any airport in the country as part of the Digi Yatra project. This step is being done to encourage paperless and hassle-free flight travel.
PROJECT OPPORTUNITIES
Some of the prominent projects under the airport construction and development in India includes:
- NOIDA INTERNATIONAL AIRPORT
The project for Noida International Airport is being carried out by Noida International Airport Limited (NIAL), a joint-venture business. The state of Uttar Pradesh will own 37.5 percent of the corporation. Noida has a 37.5 percent stake, Greater Noida has a 12.5% share, and YEIDA has a 12.5% stake. The airport would be built on 1334 hectares of land in Jewar, Uttar Pradesh, under the Yamuna Expressway International Development Authority (YEIDA) designated region of Gautam Budhha Nagar. The project will be divided into four sections. According to the Concession Agreement, the first phase for 12 million passengers per year must be finished and operating by September 29, 2024, within 1095 days of the scheduled date. Noida International Airport is expected to improve the region’s overall economic development by producing jobs and expanding manufacturing and exports.
- BHOGAPURAM AIRPORT DEVELOPMENT
GMR Airports Limited (GAL), a subsidiary of GMR Infrastructure, has been given the contract to develop and operate a greenfield international airport in Bhogapuram, Andhra Pradesh’s Vizianagaram District. The project work is yet to begin due to land acquisition concerns.
- REFURBISHMENT OF SVP AIRPORT TERMINAL
At Ahmedabad airport, the international terminal is being refurbished to accommodate more domestic flights.Adani Ahmedabad International Airport Limited has recently awarded a contract to ITD Cementation for the modification and refurbishment of Terminal 1 at Ahmedabad’s Sardar Vallabhbhai Patel International Airport.
- NEW TERMINAL BLDG AT VSI AIRPORT
The Airports Authority of India (AAI) is undertaking the construction of New Integrated Terminal Building (NITB) at VSI Airport in Port Blair, Andaman & Nicobar Islands. The environment clearance was recently granted. The new terminal is being built at a cost of ₹417 crore. The new integrated terminal building will be 40,000 square metres in size. During peak hours, the terminal will be able to handle 1,200 passengers at a time. Around 83 percent of the work is completed so far. The rest of the work is likely to complete by June 2022.
- JAMNAGAR AIRPORT EXPANSION
The Jamnagar airport is now undergoing an expansion, with the existing Terminal building being increased by 2220 square metres. The expanded terminal building will include all modern conveniences, such as six check-in desks, six airline offices, two arrival conveyor belts, and 150 car parking spaces on the city side. The additional apron will provide parking for two A320/737 and one ATR-72 or one A320/737 and three ATR-72 in a power-in and power-out configuration with a GSE area of 2320 sqm, as well as an apron for a Hangar (55mx 60m) with a total size of approximately 18160 sqm.
- BIHTA AIRPORT
AAI had estimated a 108-acre land requirement for the building of a Civil Enclave at Bihta Airport in Bihar. The state government of Bihar has already turned over the land (108 acres) to AAI. However, AAI estimates that an additional 191.5 acres will be needed for runway expansion and approach light installation, as well as 8 acres for city side development to allow wide-bodied aircraft for international operations at the airport. The state government has not yet handed over the additional land at Bihta airport to AAI.
- EXPANSION OF JODHPUR AIRPORT
Airports Authority of India (AAI) is undertaking the expansion of Jodhpur airport. The project comprises the construction of New Passenger Terminal Building for Domestic Operations, New Apron, and Parking facilities at Jodhpur Airport.
- PUNE AIRPORT REVAMP
As part of Pune Airport revamp plan, the Airports Authority of India is building a new integrated terminal building, re-constructing an old terminal building, and modifying an existing extended terminal building at Lohegaon. The new Integrated Terminal Building comprises a built up area of more than 5,00,000 sq. ft, five boarding bridges, 34 Check-in Counters and In-line Baggage handling system. The swanky new terminal building will be able to handle 2300 passengers (1700 Domestic and 600 International) during peak hours. The terminal will be an energy efficient building with 4-Star GRIHA Rating. The building will be ready in 2023. AAI is also constructing a multi-level car park (ground plus three storey +2 basement floors) with 1000 cars capacity as part of the Pune airport revamp plan.
- NEW INTEGRATED TERMINAL AT AGARTALA AIRPORT
Agartala Airport, located in the capital of Tripura, is one of the major airports in the North East Region. It has the ability to handle 4C aircraft operations. Indigo, Air India, and Flybig currently operate 230 flights each week between Kolkata, Dibrugarh, Guwahati, Imphal, Shillong, Langpui, Bangalore, and Delhi. The new Integrated Terminal Building of Maharaja Bir Bikram (MBB) Airport in the state of Tripura was opened by Prime Minister Narendra Modi in January 2022. The Agartala airport, which was formerly stretched across 10,000 square metres, has now been expanded to 30,000 square metres to highlight Tripura’s cultural legacy. The Maharaja Bir Bikram Airport would be able to accommodate 30 lakh passengers per year, up from 13 lakh previously.
- EXPANSION OF IMPHAL AIRPORT
At Imphal International Airport in Manipur, AAI is building a new Integrated Terminal Building, Apron, Link Taxiways, Control Tower, and Technical Block, among other things. The new airport terminal building will be able to handle three million passengers per year, increasing peak hour passenger capacity from 500 to 1200 passengers. The cost of the enhancement project is estimated to be ₹727.48 crores. To save the environment, the airport will be an energy-efficient structure with a sewage treatment plant, control tower-cum-technical block, apron, link taxiway, solar electricity, water recycling, and associated works.
- EXPANSION OF MADURAI AIRPORT
At the Madurai airport, AAI intends to expand the existing integrated terminal building as well as construct a new ATC tower. In this case, environmental clearance was recently granted. The present terminal building will be expanded by 7,680 square metres, resulting in a total built-up area of 25,250 square metres. After the expansion, the building’s overall peak hour occupancy will increase from 700 to 2,600 peak hour passengers. The airport terminal will have an annual capacity of 4.15 million passengers per annum by 2024-25.
- TRICHY AIRPORT EXPANSION
Airports Authority of India (AAI) is undertaking the expansion of Trichy Airport in the state of Tamil Nadu. Construction of a new integrated passenger terminal building, a new apron, an ATC tower, and upgrades to airside facilities are all part of the project. Around 65 percent of the new terminal building’s development had been completed as of November 2021. By the end of 2022, the entire project is likely to complete. E-tenders were issued in February 2022 towards the Construction of Surface Car Parking and associated works at Tiruchirapalli Airport.
- COIMBATORE AIRPORT EXPANSION
Airports Authority of India (AAI) is undertaking the expansion of Coimbatore airport . AAI is undertaking the construction of new domestic departure terminal building and associated works, construction of New ATC Tower cum Technical Block and Admin Block at Coimbatore International Airport, along with the extension of the airport runway. AAI has invited e-tenders for the Resurfacing of Runway at Coimbatore Airport.
- NAVI MUMBAI INTERNATIONAL AIRPORT
In June 2021, the Maharashtra State Cabinet formally authorised Adani Airport Holdings’ (AAH) Navi Mumbai International Airport concession agreement. AAH has declared its ambitions to begin airport development work and complete it in four stages. When completed, the airport will be able to handle 90 million passengers. 88 check-in counters, two parallel runways, a multimodal transportation facility, 29 aerobridges, and nine luggage carousels are all part of the project. In December 2021, Ashoka Buildcon Limited was awarded a work order for the building of a rock fill embankment and subgrade work for the Navi Mumbai International Airport Project. In 2024, the Navi Mumbai airport is expected to commence operations.
- BAGDOGRA AIRPORT EXPANSION
Bagdogra Airport in West Bengal is being expanded by the Airports Authority of India (AAI). On 21 hectares of land, the project entails the construction of a new terminal building with a capacity of 1,000 passengers per hour. It involves the installation of elevators, safety and security systems, as well as the building of five aprons, a runway, parking facilities, a drainage system, and other infrastructural amenities.
- EXPANSION OF UDAIPUR AIRPORT
At Udaipur Airport, the Airports Authority of India (AAI) intends to develop a new integrated passenger terminal facility. Tenders for undertaking an Environmental Impact Assessment study were recently issued.
FUTURE OF AIRPORT SECTOR
According to the International Air Transport Association, India is predicted to overtake China and the United States as the world’s third-largest air passenger market in the next ten years. According to consultancy firm Praxis Global Alliance, India will require an average of 34 more airports by 2025 and around 125 airports by 2030 to handle the 350-400 million additional passengers expected by 2030. Once the economy returns back to the pre-covid levels, the demand for air travel is expected to pick-up and lead to demand for newer airports in Tier-2 and 3 cities.
*Image used in this article is for illustration only
Note: The above-mentioned article covers India’s Airport sector overview. This was first published by us in our ProjectX India | 1st March 2022 edition. Each issue of ProjectX contains information on new projects, ongoing projects, contract award, commissioned projects, and e-procurement opportunities. Buy our latest or archival issues by clicking here…
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