Beruflich Dokumente
Kultur Dokumente
International
airline & Airport
Sector
Prepared by
Centre
for
Asia
Pacific
TableofContents
INTRODUCTION .............................................................................................................. 3
TRENDS IN INTERNATIONAL PASSENGER MOVEMENTS .................................... 3
Traffic Growth & Drivers ................................................................................................ 4
Economic ...................................................................................................................... 4
International Policy Settings ........................................................................................ 5
Airline Industry Policy Settings ................................................................................... 5
Low Cost Carriers ........................................................................................................ 6
Tourism Marketing ....................................................................................................... 6
Indian v Foreign Travellers ............................................................................................. 7
Direct Transit Traffic ....................................................................................................... 8
Distribution of Traffic ..................................................................................................... 8
Organised Retail ............................................................................................................ 10
Domestic Retail ............................................................................................................. 10
AIRPORT MODERNISATION PROGRAM .................................................................. 10
Profiles of the Major Gateways ..................................................................................... 12
New Delhi .................................................................................................................. 12
Mumbai ...................................................................................................................... 14
Bangalore ................................................................................................................... 15
Hyderabad .................................................................................................................. 16
Chennai....................................................................................................................... 17
Kolkata ....................................................................................................................... 17
Modernisation of 35 Non-Metro Airports ..................................................................... 18
Planned Greenfield Airport Development ..................................................................... 20
Low Cost Airports & Terminals .................................................................................... 21
INTRODUCTION
This report was prepared to supplement the recent familiarisation tour which TFWA and
CAPA completed together, covering airports in Delhi, Mumbai, Cochin, Bangalore,
Hyderabad, Chennai and Kolkata.
The key areas of interest for airport retailers can broadly be divided into:
1) trends in international passenger movements, to understand the direction and
potential of the overall market, and:
2) developments at the level of the airports themselves, to understand the physical
environment and opportunities for retail activities.
This report is accordingly divided into two sections reflecting the above.
Traffic is becoming more widely distributed across Indias airports, with a reduction
in concentration at Delhi and Mumbai. This will generate new retail opportunities at
airports which previously had limited or no facilities.
The Indian travel market is extremely diverse, from expatriate labourers travelling to
the Gulf, to wealthy and sophisticated global travellers from the major metros. The
Organised general retail is expanding rapidly across India, which in turn is expected
to influence trends in airport retail.
International trade and foreign direct investment have been growing at rates even
faster than GDP, which combined with record corporate profitability has resulted in
strong business travel flows, both international and domestic.
Overall bilateral seat entitlements increased 123% between 2003 and 2006. The
impact of this can be seen most markedly on the UK-India market where the number
of weekly non-stop frequencies has increased from 34 in 2006 to 112 today.
At present, Jet Airways and its value based subsidiary, JetLite, are the only private
airlines which qualify for international operations. The Group has already built up
an extensive network covering Europe, North America, the Gulf, Nepal, Sri Lanka
and Southeast Asia, with imminent new destinations including Hong Kong, China,
the UAE and Pakistan.
Kingfisher Airlines, a full service domestic carrier launched services in May 2005.
Under existing regulations it would have to wait until 2010 to operate overseas.
However, within 1 month of its launch it signalled its intention to fly international
with an order for widebody aircraft, including A380s. It is currently in the process of
merging with low cost carrier, Air Deccan, which will result in Kingfisher inheriting
Air Deccans international qualification date of August 2008. The carrier has over 30
widebody aircraft on order.
As at February 2008, Indian carriers had 100 widebody aircraft on order for delivery
over the next 5 years. In addition, a number of narrowbodies may be used for
shorthaul international services to the Gulf and South/Southeast Asia. With the
losses currently being incurred on domestic routes due to poor yields and high costs,
Air India , Jet Airways and Kingfisher Airlines may look to redeploy some shorthaul
aircraft from domestic to international services.
Meanwhile, Air India Express, the low cost subsidiary of Air India, has grown its
fleet to 17 B737-800s, operating to the Gulf, Southeast Asia and a handful of
domestic routes. JetLite, the value-based subsidiary of Jet Airways operates to Nepal
and Sri Lanka and is planning to launch services shortly to the Gulf and Pakistan.
While Kingfisher is also expected to operate a lower cost subsidiary on international
routes, although its network plans are yet to be announced.
It will be important for airport retailers to segment their customer base as there are
likely to be significant differences between various demographics. Although it was
earlier frequently assumed that LCC passengers would not be important customers
for airport retailers, this is not necessarily the case. In fact there is increasing research
to suggest that LCC passengers can be very high spenders, however achieving the
appropriate product offering is important.
Tourism Marketing
The Ministry of Tourism has increased expenditure on international promotion,
including an award winning advertising campaign that has succeeded in improving
the destinations brand profile overseas.
This has been complemented by growing recognition of the quality of Indias ground
product, particularly its luxury hotels and palaces which have recently won
numerous accolades, and increased global awareness.
Indian
Residents
65.7%
63.2%
63.6%
64.1%
65.6%
Foreign
Visitors
34.3%
36.8%
36.4%
35.9%
34.4%
The slight increase in proportion of Indian residents since 2003/04 reflects the fact that
outbound departures have been growing at approximately 1-2 percentage points faster than
inbound. This may be expected to continue, at least for the next 2-3 years for the following
reasons:
The shortage of rooms has resulted in very high hotel tariffs, which has reduced
Indias competitiveness as a destination. A number of new hotels are in
development, but it will take 2-3 years before capacity catches up with demand.
North America and Europe, which account for approximately 50% of foreign visitors
to India, are expected to experience an economic slowdown in the short-term,
however India is projected to continue GDP growth of 7-8%, which should keep
outbound more buoyant than inbound.
Distribution of Traffic
In line with its policy of providing more liberal access for international services, the
government has been particularly open in the case of non-metro airports. This has been
partly due to the fact that the key metro airports are capacity constrained, but also to support
connectivity and economic development outside the key hubs.
In fact, India has offered unlimited access, on a reciprocal basis, to 18 non-metro cities for
airlines from ASEAN and SAARC countries.
The result of this more open access has been a reduction in concentration of services at Delhi
and Mumbai, with rapid growth at the other metros such as Bangalore, Chennai and
Hyderabad, but also at an increasing number of cities which previously did not have
international services eg. Varanasi, Nagpur, Jaipur, Mangalore etc.
2007/08
25.1%
23.6%
Several carriers have taken advantage of this liberalisation to offer an extensive network of
cities, with Air Arabia operating to 11 cities, and Emirates and the Singapore Airlines Group
both operating to 10 destinations.
A non-metro city, such as Ahmedabad, is now served for example by Air India, Air Arabia,
Emirates, Qatar Airways, Kuwait Airways and Singapore Airlines.
Indian Destinations served by a sample of Foreign Carriers
Air
Arabia
Ahmedabad
Air India
Express
British
Airways
Emirates
Etihad
Lufthansa
Qatar
Airways
Amritsar
Bangalore
Chennai
Coimbatore
Delhi
3
3*
3
3
3
3
3*
Hyderabad
Jaipur
Kochi
3
3
Kolkata
Mangalore
Mumbai
Nagpur
3*
3
Lucknow
3*
3*
3
3
Trichy
Trivandrum
3
3
Goa
Kozhikode
SriLankan
Airlines
3
3
Organised Retail
Indian international travellers have been recognised by overseas destinations as having a
relatively high spend per capita, with shopping regularly featuring as one of the leading
activities on vacation. This has in large part been driven by traditionally limited retail
options in India itself.
Organised retail accounts for only 2-3% of the total market. That landscape is changing
rapidly, with literally hundreds of malls under construction across the country. The 2007 AT
Kearney Global Retail Index rates India as the leading global market for retail investment
opportunities, and projects growth of 40% per annum for organised retail through to 2010.
The opportunity to shop in India may change the consumption profile for Indian travellers as
certain goods which they used to buy overseas or duty free may now be available more
conveniently at the local mall.
However, the growth of organised retail is also likely to increase the profile and awareness of
luxury brands. This trend can be seen with the imminent opening of two malls dedicated to
high end brands the Emporio Mall in New Delhi and the UB Mall in Bangalore. This
increased familiarity may in turn increase demand for these products to be available at duty
free locations at Indian airports.
Domestic Retail
In addition to tax free products, another major growth sector is expected to be general retail
at domestic airports. This is also a relatively new concept in India, options were previously
limited to books and snacks. Well-presented and designed retail environments with a wide
range of products could tap into an increasingly consumerist middle class India.
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The following chart identifies the capacity augmentation that will be required at 15 of the
leading airports in the country to meet projected demand through to 2011/12.
DOMESTIC
Mumbai
INTERNATIONAL
Delhi
8.5
31.3
22.8
5.3
14.8
9.5
Chennai
4.7
12.5
7.8
3.0
5.1
2.1
Bangalore
2.7
18.3
15.6
0.5
3.3
2.8
Kolkata
4.1
10.9
6.8
0.9
1.5
0.6
Hyderabad
2.9
11.4
8.5
0.7
3.8
3.1
Cochin
1.2
1.7
0.5
1.7
2.7
1.0
Ahmedabad
0.6
5.5
4.9
0.1
1.4
1.3
Goa
0.7
4.8
4.1
0.3
0.9
0.6
Trivandrum
0.5
0.6
0.1
1.1
1.7
0.6
Guwahati
1.1
1.7
0.6
0.3
0.02
Amritsar
0.2
0.3
0.1
0.3
2.0
1.7
Srinagar
0.4
1.4
1.0
0.03
0.03
Jaipur
0.3
1.1
0.8
Nagpur
0.7
1.0
0.3
Calicut
0.5
0.3
0.0
0.2
0.4
0.1
0.1
0.1
2.3
1.9
Recognising that the process of modernising airport infrastructure will require both funding
and expertise which it does not possess, the government is seeking private sector
participation.
In addition to the airports themselves, a critical issue sometimes overlooked, is the need to
invest significantly, both physically and in terms of human resources, in modernisation of air
traffic management systems, air safety and airport security.
Inadequate runways, parking and terminal capacity continue to result in congestion both in
the air and on the ground, adding to delays and cost of operations. Hence expansion and
modernisation of airports has become imperative for the viability of the sector.
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The airport upgrade and modernisation plan set-out by the Ministry of Civil Aviation is:
Airport
Projected Investment
Completion Date
March 2010
Mumbai (Phase I)
March 2010
Bangalore (Phase I)
March 2008
Hyderabad (Phase I)
March 2008
Chennai
2010
Kolkata
2010
35 Non-Metros
24 by 2009 / 11 by 2010
Other Non-Metros/NE
Other Greenfield
Air Traffic Management
State governments have been requested to support the airport upgrade efforts by acquiring
suitable land and clearing them of encroachments, providing utilities/services, surface
access, approval of commercial developments and provision of security arrangements.
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Under the Public Private Partnership initiative of the Government of India, DIAL was
awarded the mandate for the modernisation and redevelopment of IGI Airport after an
international competitive bid in January 2006.
DIAL took over management of Delhi Airport in May 2006 and has embarked on an
extensive modernisation programme. The airport currently has separate domestic and
international terminals and is served by two runways.
The Master Plan developed by DIAL aims to expand the facilities in a phased manner to
take care of the traffic growth over the next 30 years.
Phase I
Under the first phase of the expansion, a new interim domestic terminal will be opened with
a capacity of 10 million passengers per annum. A new Code F (A380 compatible) runway
will be completed by June 2008. In addition, the existing International Terminal (Terminal
2) is undergoing renovation process which will be complete by mid-2008.
However, the most important step in the modernisation process will be construction of a new
integrated passenger terminal (Terminal 3) which will be ready by March 2010, before the
Delhi Commonwealth Games 2010. This phase will have a total project outlay of US$2.24
billion to enable Delhi Airport to handle 37 million passengers per annum. It is expected that
the passenger traffic in Delhi will grow to 29 million by 2010.
Passenger traffic is forecast to reach 46 million passengers per annum by 2015 and 80 million
by 2025. Aircraft movements are projected to cross 380,000 annually by 2015 and reach
600,000 by 2025. Cargo volumes are also expected to increase at a steady rate and touch 2.13
million tones a year by 2025.
In later phases, another runway will be built and the existing secondary runway would be
realigned to form a fourth parallel runway to cater to the growth in traffic. The airport is
being designed with an ultimate capacity of 100 million passengers per annum.
The Aerocity adjoining the airport will feature hotels, convention centres, shopping malls
and other business and recreational facilities for travellers. As a first step, DIAL has invited
bids from leading developers of hospitality facilities for the construction of hotels within the
airport complex.
Concessions Awarded:
Duty Free:
Alpha Airports and Future Group
Advertising:
Times Innovative Media
Catering:
RFP to be issued shortly
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Fuel Farm:
Ground Handling:
Car Parking:
Mumbai
Chhatrapati Shivaji International Airport
The GVK-ACSA (Airports Company of South Africa) consortium was awarded the
concession to modernise Chhatrapati Shivaji International Airport in January 2006. The
joint venture company formed to operate the airport is Mumbai International Airport Pvt
Ltd (MIAL), and it assumed operations from May 2006.
Mumbai Airport is the busiest in the country and handled 22 million passengers (15 million
domestic and 7 million international) in the 12 months to 31 March 2007, a year-on-year
increase of almost 21%.
In October 2006, MIAL announced the Masterplan for the development of the airport. The
plan foresees an expansion of the infrastructure to be able to handle 40 million passengers
per annum and 1 million tonnes of freight. The development is scheduled to be completed in
two phases:
Interim Phase by 2008:
Refurbishment of international terminal;
Expansion of departure facilities at domestic terminal 1A;
Adding capacity to cargo facilities;
Construction of rapid exit taxiways;
Development of multi-level car park (eventually car parking spaces will be increased
from 3,600 to 12,000).
Phase 1 by 2010:
Construction of new intergrated domestic/international terminal (T2) at Sahar;
Opening a dedicated road link from Western Express Highway to T2;
Relocation of air traffic control tower to improve airside efficiency;
Construction of a new parallel taxiway;
Creation of new cargo facilities.
The official Masterplan envisages the construction of a new parallel runway. Achievement of
this plan involves a number of hurdles including the clearance of slum developments,
relocation of Air India facilities, acquisition of private land and demolition of some private
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buildings. These are complex issues and consequently MIAL is also looking at ways in
which it can maximise the capacity of the current cross-runway operation.
Concessions
The duty free retail concession was initially awarded to a JV between Aldeasa and the stateowned ITDC. However, after continued delays to the opening of retail facilities, the venture
attempted to renegotiate the contract having concluded that the original amount bid was too
high. The airport operator terminated the agreement and instead awarded the concession to
DFS. The first stores opened in March 2008.
Bangalore
Bangalore International Airport
BIAL is the owner and operator of the new Bangalore International Airport at Devanahalli,
about 32km from Bangalore city. BIAL is a public limited company comprising five
shareholders:
Siemens Project Ventures (40%)
Larsen & Toubro (17%)
Unique Zurich Airport (17%)
Airports Authority of India (13%)
Government of Karnataka through KSIDC (13%)
The new airport is located on a site of 4,000 acres and when it opens in late May 2008 will
have capacity to handle 12 million passengers per annum. Phase I of the project will cost
approximately US$480 million. It will have a terminal area of 68,631 sqm with 48 aircraft
parking bays and 9 aerobridges.
At that time of opening, the existing HAL controlled Bangalore airport is to be closed for
commercial use, as per the agreement between BIAL and the Government of India and
Government of Karnataka. However, there are currently public interest litigation cases
pending with the courts, to keep the existing airport open. This matter will be watched with
keen interest by international investors.
Twelve international airlines currently operate to Bangalore, however once the new airport
opens, this is expected to increase to twenty as a number of airlines have shown interest in
launching services. Dragonair has already announced plans to operate to the city and carriers
such as Swiss, Qatar Airways, Oman Air, Etihad Airways and Continental are considering
services. Kingfisher Airlines has announced plans to operate from Bangalore to London and
the US from late 2008.
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International traffic which hit 1.26 million passengers in 2006/07 is expected to reach 2.0
million in 2008/09. In its first year of operations BIAL is expected to handle over 11 million
domestic and international passengers.
Airport Access
The most serious problem faced by the new Bangalore Airport is access from the city. The
current road connection is heavily congested and some estimates have suggested that transfer
time could be as high as 3 hours. Improved road access and a metro rail connection are at
least 2 to 3 years away.
Concessions Awarded
Advertising:
JC Decaux
Cargo Handling:
SATS/Air India and Menzies/Bobba
Catering:
LSG SkyChefs and TajSATS
Duty Free & Retail: Nuance Group/Shoppers Stop (Intl) and Shoppers Stop (dom)
Food and beverage: HMS Host and Caf Coffee Day
Fuel Farm:
Indian Oil/Skytanking
Ground Handling:
SATS/Air India and GlobeGround
Hyderabad
Rajiv Gandhi International Airport
GMR Hyderabad International Airport Limited (GHIAL) was formed to design, finance,
build, operate and maintain a greenfield International Airport on a 5,500 acre site at
Shamshabad, located 25km from the city centre of Hyderabad to replace the existing
Begumpet Airport. The airport, which opened on 23 March 2008, is a Public Private
Partnership with the following shareholders:
GMR Infrastructure (63%)
Malaysia Airports Holding Berhad (11%)
Airports Authority of India (13%)
Government of Andhra Pradesh (13%).
The new airport has the capacity to handle 12 million passengers per annum in the initial
phase and more than 100,000 metric tonnes of cargo per annum, with a project cost of
INR24.78 billion. The ultimate design capacity for the airport is to cater to over 40 million
passengers per annum and 1 million tonnes of cargo.
Concessions Awarded
Airport Hotel:
Cargo:
Catering:
Accor (Novotel)
Menzies UK
LSG Sky Chefs and Sky Gourmet
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Duty Free:
Food and Beverage:
Fuel Farm:
Ground Handling:
Lounges:
Chennai
Meenambakam International Airport
On 18th April 2007 the PMs Committee on Infrastructure decided that the modernisation of
Chennai Airport would be conducted by the Airports Authority of India and not through a
PPP model as previously expected.
The development plan for the airport is as follows:
Expansion of domestic terminal building by 72,700 sqm to increase capacity from 6
million to 16 million passengers per annum.
The international terminal building is to be extended by 64,300 square meters to
increase capacity from 3 million to 7 million passengers per annum.
Second runway to be developed to increase runway capacity to 50 movements per
hour. This is expected to be sufficient to cater to airside requirements until 2015-16.
Total project cost is estimated at INR20.62 billion and is scheduled for completion
by June 2010.
Chennai Airport is located on a site of 1,152 acres. An additional 1,069 acres of land is
required to enable the construction of a parallel second runway.
New building activity has been frozen on this land since early 2007, however many residents
continue to remain in the area as they had earlier built new homes after being advised that
the land would not be acquired for the airport. Residents have submitted an objection with
the Madras High Court to the acquisition notice. This legal obstacle is expected to delay the
modernisation plan.
Kolkata
Netaji Subhash Chandra Bose International Airport
As was the case for Chennai, the PMs Committee on Infrastructure meeting on 18 April
2007 decided that the modernisation plan for Kolkata Airport would also be carried out by
the Airports Authority of India.
The development plan for the airport is as follows:
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The AAI will handle all airside developments itself including construction of
runways, taxiways, aprons, terminals, fire stations, control rooms, isolation bays etc.
Landside development will be carried out on a PPP basis and may include
construction of hotels, convention centres, shopping malls, food and beverage
outlets.
24 airports have been identified for immediate modernisation, with the remaining 11 being
deferred due to a shortage of land to be able to implement the proposed plans.
Details of the airports being modernised, with planned levels of airside investment and
estimated completion dates are as below:
AIRPORT
PROJECT COST
COMPLETION DATE
Agra
Completed
Agartala
Mar-2010
Agatti
Dec-2007
Ahmedabad
Amritsar
Domestic Dec-2007
International Feb-2009
Dec-2007
Aurangabad
Jul-2008
Bhopal
Mar-2009
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Bhubaneshwar
Mar-2009
Chandigarh
Mar-2009
Coimbatore
Mar-2010
Dehradun
Dec-2008
Dimapur
Dec-2009
Goa
Sep-2009
Guwahati
Dec-2009
Indore
Dec-2008
Imphal
Dec-2009
Jammu
Dec-2008
Jaipur
Oct-2007
Khajuraho
Dec-2008
Lucknow
Dec-2008
Madurai
Dec-2008
Mangalore
Dec-2008
Nagpur
Dec-2007
Patna
Mar-2010
Port Blair
Dec-2009
Pune
Mar-2009
Raipur
Dec-2009
Ranchi
Dec-2008
Rajkot
Dec-2009
Trivandrum
Trichy
Domestic Dec-2009
International Dec-2008
Sep-2007
Udaipur
Jul-2007
Vadodara
Mar-2010
Vizag
Dec-2007
Varanasi
Dec-2008
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AAI has appointed two consultants UTI Bank Limited Mumbai and Capital Fortunes
Limited Hyderabad to assist in selecting the JV partners for the landside development. The
Ministry of Civil Aviation estimates that up to INR410 billion may be invested by the private
sector in landside developments at non-metro airports over the next 4 to 5 years.
The airports from the above list for which non-availability of land may limit the development
of landside activity include: Agatti, Agra, Chandigarh, Jammu, Pune, Dehradun, Goa,
Raipur, Bhubaneshwar and Port Blair.
The tender process for Udaipur and Amritsar airports is currently in progress. Trichy, Vizag
and Coimbatore are expected to be the next airports to follow this process.
20
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across the state. Sites under consideration include: Kolhapur, Latur, Ratnagiri, Nanded,
Osmanabad, Sholapur, Karad, Sangli, Amravati, Gondia, Shirdi, Jalgaon, Akola, Naramati.
Karnataka: proposed locations for budget airports in the state include Shimoga, Gulbarga,
Hassan, Bijapur, Bellary, Karwar. The airports at Shimoga and Gulbarga will be developed
on a PPP model, and the Maytas-Vienna Airport consortium has been granted a 30 year
lease for both airports.
Tamil Nadu: the state government is considering a number of locations eg. Tuticorin and
Sriperumbudur, for redevelopment of existing/unutilised airfields as well as construction of
greenfield facilities.
Other states evaluating the low cost airport model include Andhra Pradesh, Kerala, Punjab,
Rajasthan and West Bengal.
_______________________________________________________________
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