Airports January 2016 PDF

AIRPORTS
JANUARY 2016 For updated information, please visit www.ibef.org 1

AIRPORTS
Executive Summary.3
Advantage India... 5
Market Overview & Trends........ 7
Porter Five Forces Analysis ...20
Strategies Adopted.. 22
Growth Drivers......... 24
Opportunities.....36
Success Stories.... 38
Useful Information.........................41

AIRPORTS
EXECUTIVE SUMMARY (1/2)
CAGR: 41.02%
421
By 2020, passenger traffic at
Third largest aviation market by Indian airports is expected to
2020 increase to 421 million from
106.45
106.45 million in 2016*
2016* 2020
million
475.43
CAGR: 12.79% The travel & tourism industry is
Travel & tourism to be forecast to grow 12.79 per cent
contributing USD475.43 billion
to USD475.43 billion in 2025
to GDP by 2025
142.65 from USD142.65 billion in 2015
2015 2025E
USD billion Spending on business travel is
estimated to increase to
192.83
97.20 USD36.53 billion in 2025 from
19.34 36.53
Business & leisure travel to USD19.34 billion in 2015, while
boost growth that on leisure travel is forecast
2015 2025E
to rise to USD192.83 billion in
Leisure Travel & Tourism spending (in USD Billion)
2025 from USD97.20 billion in
Business Travel & Tourism spending (in USD Billion) 2015
Source: World Travel and Tourism Council, Airport Authority of India, TechSci Research
JANUARY 2016 *-Data is for April-September 2015; E - Estimated 3
For updated information, please visit www.ibef.org
AIRPORTS
EXECUTIVE SUMMARY (2/2)
900 Working population (aged

CAGR: 0.6%
between 15 and 64 years) is
By 2030, Indias working
estimated to increase from 825
population to be thrice the total 825 million in 2015 to 900 million by
population in the US
2030, almost three times the
US population
2015 2030
million
Indias middle income population

CAGR: 10.8%
267 is expected to increase from 160
By 2016, Indias middle income million (over 50 per cent of the
class to be triple the total 160 total population in the US) in
population in Germany 2011 to 267 million by 2016
equivalent to over three-times
Germanys population
2011 2016
million
Source: World Travel and Tourism Council, Asian Development Bank, TechSci Research

AIRPORTS
ADVANTAGE INDIA
JANUARY 2016
AIRPORTS
ADVANTAGE INDIA
Robust demand
FY00
Growing
Rising demand
working group and widening
Opportunities in MRO FY16*
middle class demography is Growth in aviation accentuating
expected to boost demand demand for MRO facilities
No of No of
operational India plans to increase the number Expenditure in MRO accounts for operational
airports: 50 of airports to 250 by 2030 to cater 13-15 per cent of total revenues; it airports: 90
to growing leisure and business is the second-highest expense after
travel fuel cost
Freight traffic also likely to go up as By 2020, the MRO industry is likely

trade with the rest of the world to grow over USD1.5 billion from
increases USD0.5 billion currently
Advantage
India Policy support
Increasing investments The government has been encouraging
Investments totaling USD12.1 private sector participation
billion in the airport sector are likely
to be made during the Twelfth Five
Year Plan (2012-17); of these, Tax incentives for developers;
private investments are expected to liberalisation of the aviation sector
total USD9.3 billion Open Sky Policy
Growing private sector participation Government has allowed 49 per cent FDI
through the Public - Private in aviation for foreign carriers, while
Partnership (PPP) route NRIs are allowed to pick up 100 per
cent equity in airlines
Source: Ministry of Civil Aviation, MRO India, TechSci Research

Notes: FDI Foreign Direct Investment, MRO Maintenance, Repair and Overhaul; FY Indian Financial Year (April March); *-Data is
till September 2015
AIRPORTS
MARKET OVERVIEW AND TRENDS
JANUARY 2016
AIRPORTS
EVOLUTION OF THE INDIAN AVIATION SECTOR
India is the ninth largest civil aviation market in the world
India ranks fourth1 in domestic passenger volumes (80.16 million2) as of FY16*
Indias civil aviation market is set to become the worlds third3 largest by 2020 and expected to be the largest by 2030
Scheduled airlines: distance

flown (mn km) 199 889.29 (FY154)
Non-scheduled airlines in
39 122 (FY15)
operation
Number of aircrafts 225 1,649 (FY14)
Passenger handling
capacity at airports 66 million 270 million (FY14)
Number of airports 50 125 (FY15)

2000
Source: Airports Authority of India, Ministry of Statistics and

Programme Implementation, Ministry of Civil Aviation, TechSci Research
Notes: 1 India ranks after US, China and Japan, 2 Data for FY16, 3 India ranks after the US and China,
4 Data is for Financial Year; FY Indian Financial Year (April March), mn km Million Kilometers
* - Data is for April-September 2015
AIRPORTS
INDIA HAS 464 AIRPORTS AND AIRSTRIPS, OF WHICH 125 AIRPORTS ARE OWNED BY AAI
Non-operational Domestic airports

AAI managed (9) (66)
(125)
Airports and
airstrips in India Customs airports
Operational (90) (7)
(464)
Non-AAI airports
and airstrips
(339)
Civil enclaves International (17)
(26)
Activity in AAI
Aircraft Movement 20.80% 79.20% airports - shares (%) Airports Authority of India (AAI) was
FY16* Established in 1994 under the Airports
Authority Act
Passenger Traffic 24.70% 75.30% Responsible for developing, financing,
operating, and maintaining all government
airports
Basic facts The Aircraft Act (1934) governs remaining
Freight Traffic 61.74% 38.26% airports
0 0.2 0.4 0.6 0.8 1 1.2

Source: Airports Authority of India, TechSci Research
International Domestic
Notes: AAI Airports Authority of India, JV Joint Venture,
FY Indian Financial Year (April March)

AIRPORTS
SIX MAJOR AIRLINES OPERATE IN THE COUNTRY
Spicejet
92.00% Market share: 11.6%
Passenger load traffic: 93.2%
90.00% Indigo
Market share: 38.40%
88.00%
Passanger Load Factor
86.00% GoAir
Market share: 8.70%
84.00%
82.00% Jet Airways

Market share: 21.90%
80.00% Jetlite*
Market share: 4.30%
Air India
78.00%
Market share: 15.8%
76.00%
-5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
Market Share
Note: Market Share as on August15 and Load Data for the month of
August15 as published by Directorate General of Civil Aviation
* - Data is for April15
AIRPORTS
THE SIX MAJOR AIRPORTS IN THE COUNTRY
Delhi
Passenger traffic handled in
FY15: 40.9 million;
FY16*: 22.8 million
Kolkata
FY15: 10.9 million;
FY16*: 5.97 million
Mumbai
Passenger traffic handled in;
FY15: 36.6 million;
FY16*: 20.4 million
Hyderabad
FY15: 10.4 million
Bengaluru FY16*: 6.0 million
FY15: 15.4 million;
FY16*: 23.5 million
Chennai
FY15: 14.3 million;
FY16*: 7.6 million
Source: AAI, TechSci Research

Note: FY Indian Financial Year (April March)
* - Data is till September 2015

AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (1/2)
Total passenger traffic stood at a 106.45 million in FY16* Passenger traffic in FY16*
Passenger traffic increased by 12.47 per cent in FY15 200 35.00%

180 30.00%
160 25.00%
Growth in passenger traffic has been strong since the new 140
millennium, especially with rising incomes and low-cost 20.00%
120
aviation; passenger traffic expanded at a CAGR of 3.8 per 15.00%
100
cent over FY0616* 10.00%
80
60 5.00%
116.87
108.88
123.76
143.43
162.31
169.03
106.45
0.00%
73.35
96.49
159.4
190.1
40
20 -5.00%
0 -10.00%
Passenger Traffic Growth rate
Source: Association of Private Airport Operator, TechSci

Research, Notes: CAGR Compound Annual Growth Rate,

AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (2/2)
Domestic passenger traffic expanded at a CAGR of 4.6 per Growth in domestic passenger traffic has been robust
cent over FY0616*; by FY17 domestic passenger traffic is
expected to touch 209 million 200 50.00%
180
40.00%
160
International passenger traffic posted a CAGR of 1.6 per 30.00%
140
139.3
cent over FY06-16* and is set to touch 60 million by FY17
122.41
120
121.51
116.37
20.00%
105.52
100
89.39
10.00%
87.06
Growth in passenger traffic set to remain strong in future 80
80.16
77.3
70.62
60
22 50.98
0.00%
40
12th Plan Period -10.00%
51
47
43
41
38
20
34
32
30
26
26
60 0 -20.00%
11th Plan Period

41 International Domestic
10th Plan Period
209 Growth-International(%) Growth-Domestic(%)
26
122
14 During FY15, domestic passenger traffic increased by
71
13.80 per cent compared to 5.19 per cent in FY14
26
FY02 FY07 FY12 FY17E During FY15, international passenger traffic increased
International Passenger Throughput International (million) by 8.97 per cent compared to 8.34 per cent in FY14
Domestic Passenger Throughput Domestic (million)
Source: Airports Authority of India, Ministry of Civil Aviation, TechSci Research

Notes: YoY Year on Year, FY Indian Financial Year (April March)
AIRPORTS
FREIGHT TRAFFIC GREW AT A CAGR OF 6.2 PER CENT DURING FY06 TO FY14 (1/2)
Total freight traffic registered a CAGR of 6.7 per cent over International freight traffic was 61.8 per cent of
FY06-15 the total in FY16*
Domestic freight traffic increased at a CAGR of 0.6 per cent 3000 30.00%
over FY06-16* while international freight traffic rose 5.9 per
cent over FY06-15 25.00%
2500
20.00%
In FY16*, domestic freight traffic was 0.51 million tonnes,
986
2000
852
while international freight traffic was at 0.83 million tonnes
812
840
15.00%
784
689
During FY15, domestic freight traffic at 0.98 million 1500 10.00%
568
552
530
increased by 17.38 per cent while international freight traffic
484
515
at 1.5 million increased by 7.08 per cent compared to FY14. 5.00%
1000
1542
1496
1468
1440
1407
0.00%
1271
1149
1147
By 2023, total freight traffic is expected to touch 4.14 million
1023
832.00
920
tonnes growing at a CAGR of 7.27% between FY2016-23. 500
-5.00%
In addition, International freight traffic is expected to grow at
a CAGR of 7.13% while Domestic freight traffic is expected 0 -10.00%
to grow at a CAGR 7.50% between FY2016-23.
International('000 Tonnes) Domestic ('000 Tonnes)

Growth-International(%) Growth-Domestic(%)

- Data is for April-September 2015

AIRPORTS
AND IS POISED TO GROW FURTHER (2/2)
Freight traffic is expected to be five times the current level Freight traffic (million tonnes)
by the end of the next two decades. It is expected to be 11.4
million tonnes by 2032 3 25%
2.5 20%
Growth in import and export in India will be the key driver for
growth in freight traffic as 30 per cent of total trade is 15%
2
undertaken via airways 10%
1.5
5%
1
0%
0.5 -5%
1.55
1.72
1.96
2.35
2.28
2.19
2.28
2.53
1.35
1.4
1.7
0 -10%
Freight Traffic(Million tonnes) Growth

*- Data is for April-September 2015

AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (1/2)
Total aircraft movement recorded a CAGR of 5.1 per cent Total aircraft movement (million)
over FY07-15
1.8 25.00%
Both international and domestic aircraft movement have 1.6 20.00%
nearly doubled over this period 1.4
15.00%
1.2
1 10.00%
In FY15, total aircraft movement increased by 4.5 per cent 0.8 5.00%
to 1.6 million 0.6
0.00%
0.87
0.4
1.08
1.31
1.31
1.33
1.39
1.54
1.48
1.54
1.61
In FY16*, total aircraft movement stood at 0.87 million 0.2 -5.00%
0 -10.00%
Total Aircraft Movement Growth
Source: Association of Private Airport Operators,

Airports Authority of India, TechSci Research
Notes: CAGR Compound Annual Growth Rate
*- Data is for April-September 2015

AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (2/2)
Domestic aircraft movement increased at a CAGR of 4.86 Aircraft movement growth

per cent over FY07-15 while international aircraft movement 1800 25.00%
expanded 6.07 per cent (CAGR) over the same period 1600 20.00%
1400
In FY15, domestic aircraft movement increased by 4.94 per 1200 15.00%
cent, while international aircraft movement expanded by 1000 10.00%
3.02 per cent 800 5.00%
600
During FY15, the total number of domestic aircraft 0.00%
400
movement increased to 1.3 million, an increase of 4.94 per -5.00%
200
cent compared to FY14
0 -10.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*
During FY15, the total number of international aircraft
International('000) Domestic('000)
movement increased to 0.35 million, an increase of 3.02 per
cent from FY14 Growth-Domestic(%) Growth-International(%)
In FY16*, domestic aircraft movement stood at 0.689

Source: Association of Private Airport Operators, TechSci Research
million, while international aircraft movement stood at 0.181 Notes: YoY Year on Year; FY Indian Financial Year (April March)
million *-Data is for April-September 2015

AIRPORTS
AAI DOMINATES, BUT PRIVATE SECTOR PARTICIPATION IS RISING
Until 2013, AAI was the only major player involved in developing and upgrading airports in India
Post liberalisation, private sector participation in the sector has been increasing
Private sector investment is expected to increase to USD9.3 billion during the Twelfth Five Year Plan from USD5.5 billion in
the previous plan
Development of Hyderabad International Airport; modernisation

of Delhi International Airport
Modernisation of Mumbai International Airport
Development of Bengaluru International Airport

Major private
sector players
Development of Simoga and Gulbarga airports in Karnataka
Note: AAI Airports Authority of India

AIRPORTS
NOTABLE TRENDS IN THE AIRPORTS SECTOR
Currently, five international airports have been completed successfully under PPP mode
Investment made by the private sector during the Twelfth Five Year Plan (201217) is
Rising private expected to increase by 69.1 per cent to USD9.3 billion over that during the Eleventh Five
participation and Year Plan
Investments Four existing airports and two greenfield projects will be offered on PPP basis which is
expected to attract investments from private players
Greater use of non- Rising business activity leading to higher demand for non-scheduled airlines
scheduled airlines 122 operators with combined fleet of 406 aircrafts in FY15
Increasing use of development fees by airport developers and operators

User development fees Airport Development Fee: Delhi, Mumbai airports to fund expansion
User Development Fee: Hyderabad, Bengaluru airports for maintenance
Indian airports are emulating the SEZ-aerotropolis model to enhance revenues; focus on
Focus on non- revenues from retail, advertising, vehicle parking, etc.
aeronautical revenue Absence of complementary meals in low-cost airlines have boosted the food and
beverages retail segment at airports
Source: DGCA

AIRPORTS
PORTER FIVE FORCES ANALYSIS
JANUARY 2016
AIRPORTS
PORTERS FIVE FORCES ANALYSIS
Competitive Rivalry*
Competition among major players is very high, especially in LCCs (Low cost
carrier) section because the airlines compete for the middle income group
customers and passengers of air-conditioning segment of railways. This group Threat of New
has low brand loyalty and is highly price sensitive Entrants
Competition might intensify further in LCC segment with Air Asia India being (Low)
granted DGCAs operator license
Threat of New Entrants* Substitute Products*
Threat remains low because of the Threat remains low in this sector Bargaining Competitive Substitute
nature of the industry (Regulatory also as no other means of Power of Rivalry Products
hurdles, Capital-intensive) transport is as swift, and Customers (High) (Low)
Air Asia India has been granted convenient as airlines (Low)
DGCA approval (Price War) It saves time
Bargaining Power of Suppliers* Bargaining Power of Customers*

Bargaining
Power of
Bargaining power of suppliers Bargaining power of customers
Suppliers
remain high as there are only few remains low as the demand for low
fuel and aircraft suppliers cost air travel is quite high (High)
Talent pool of pilots, engineers and The costs of switching airplanes
other staff is also limited and services offered hardly differ
with each other
Source: Central Asia-Pacific Aviation, TechSci Research
Note: *(Notes w.r.t airlines)

AIRPORTS
STRATEGIES ADOPTED
JANUARY 2016
AIRPORTS
STRATEGIES ADOPTED*
LCC segment is poised to grow, led by plans of induction of an additional 20 aircrafts on domestic
routes by the second half of FY14
Expansion of CAPA
Expansion Further, rise of LCCs was also supported by the exit of Kingfisher, which created a void
Capacity will also increase with new terminals coming up in Mumbai, Bengaluru, Chennai and
Kolkata
Indian carriers to double their fleet capacity by 2020 to around 800 aircrafts
Indian LCCS are looking forward to increase their ancillary services, without tampering their
business models. This includes services like lounge access, priority boarding, customer loyalty
Ancillary services
memberships and customer meals
Both Indigo and GoAir are eyeing a larger share of corporate market
Indian LCCs are expected to increase their regional, international (Asia-pacific, Middle East)
operations
Indian LCCs are looking forward to increase their low cost products on routes which will take up to
Increasing operations four hours (shorter international routes)
This will allow deleveraging of domestic fleet, increasing aircraft utilisation and improving commercial
performance
Chennai, with its strategic location in South India has a strong potential to become a hub, with
connecting flights to Gulf and across South East Asia
Although India is heavily characterised by LCCs, there is shortage of low cost airports. Government
Governments push has plans to develop around 100 low cost airports, which will significantly lower the operating costs
NIAMAR (National Institute of Aviation Management and Research) has been developed to bridge
the supply gap of aviation personnel
Source: Central Asia-Pacific Aviation, TechSci Research
Note: *(Notes w.r.t airlines), LCC Low Cost Carrier
AIRPORTS
GROWTH DRIVERS
JANUARY 2016
AIRPORTS
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS
Increasing
Growing
Growing demand
demand Policy support
Strong investments
government
support
AAI driving large
Greater modernisation,
Expanding middle
government focus development
income group and
on infrastructure projects; expansion
working population
and upgradation of
existing airports;
Inviting Resulting in development of
Rising domestic low-cost airports
Increasing
and foreign
liberalisation,
tourists and Increasing private
Open Sky Policy
travellers sector
participation,
increasing
greenfield projects
Strong growth in Policy sops, FDI
external trade encouragement Strong projected
demand making
returns attractive

AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (1/2)
GDP growth and per capita income
Rising per capita income and growing working
population 10,000 12
10
Per capita income is expected to increase at a CAGR 8,000
of 13.5 per cent during 2005-2015 8
6,000
The population belonging to the working age group 6
4,000
(1564 years), at 65.7 per cent of the total population 4
2,260
2,509
2,789
2,914
3,141
3,457
4,686
4,948
6,796
7,411
8,027
currently, is expected to grow; this indicates the 2,000 2
employee base and the frequency of business travel
0 0
are expected to increase
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Gross domestic product based on purchasing power parity (PPP)

per capita GDP (in USD)
Real GDP Growth Rate (%)
Source: IMF, World Travel and Tourism Council, TechSci Research

Note: E - IMF estimates

AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (2/2)
Travel and tourism spending (USD billion)
Rising domestic and foreign tourists
Improving tourism infrastructure 120
96.01
90.16
Successful ad campaigns abroad
100 CAGR: 10.85%
77.87
The share of travel & tourism in Indias GDP showed
69.3
68.7
7.5 per cent growth in 2015; and is expected to grow 80
60.9
by 7.3 per cent per annum by 2015-2025E
48.7
46.2
60
42.1
CAGR: (1.81%)
More business travellers as well
26.4
25.5
20.80
24.4
19.10
40
22.3
17.78
22.1
18.6
India is one of the fastest growing economies
20
Business travel & tourism spending decline by CAGR
1.81% between 2007-15. 0
Emergence of business hubs like Mumbai (Finance), 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bengaluru (IT), Chennai (IT), Delhi (Manufacturing, IT) Leisure Travel & Tourism Spending( In USD Bn)
Business travel market grew to USD28.8 billion in Business Travel & Tourism Spending(In USD Bn)
2015 from USD24.9 billion in 2014, making India the
10th largest business travel market in the world in Source: World Travel and Tourism Council,
2015. Make in India, Global Business Travel Association, TechSci Research
Notes: IT Information Technology, F Forecast

AIRPORTS
MORE PASSENGERS AND RISING TRADE AIDING HIGHER AIRCRAFT MOVEMENT
Growing trade benefits of freight movement Rising exports and imports (USD billion)
Over FY09-15,
600
489.32
490.74
450.20
447.52
Indias exports expanded at a CAGR of 8.93
369.77
per cent to USD309.5 billion in FY15. 500
314.41
309.56
305.96
303.69
300.40
288.37
Imports registered a CAGR of 6.68 per cent
249.82
400
which has reached to USD447.52 billion in
185.29
178.75
FY15 300
In FY16*, Indias imports and exports were 200

USD1.02 billion and USD2.13 billion
2.13
1.02
respectively 100
Growing trade augurs well for airports as they handle 0

about 30 per cent of Indias total trade (by value) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16*
Exports Imports
FDI in aviation and
Increasing airline
liberalised aviation
operators Source: Ministry of Commerce, TechSci Research
policy
Notes: CAGR Compound Annual Growth Rate,
*-Data is for April-August 2015
Higher aircraft
movement
Growth in passenger
Rise in freight traffic
traffic

AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (1/2)
Government of India (GOI) envisions airport infrastructure investment of USD11.4 billion

Greater focus on under the Twelfth Five Year Plan (2012-17)
infrastructure The Ministry of Civil Aviation has approved annual planned outlay of USD1.6 billion for
FY14 for the development of airport infrastructure
With the opening of the airport sector to private participation, six airports across major
cities are being developed under the PPP model
Liberalisation, Open
Currently, 60 per cent of airport traffic is handled under the PPP model, while the
Sky Policy remaining 40 per cent is managed by the AAI
Increased traffic rights under bilateral agreements with foreign countries
100 per cent FDI under automatic route for greenfield projects
Encouragement to FDI 100 per cent FDI for existing airports is also possible with an approval from FIPB
Approval of 49 per cent FDI in aviation for foreign carriers
Notes: India currently has bilateral air service agreements with 104 countries. These include Brazil, 27 members of the EU, and
China. In 2008 traffic rights were been enhanced with Mexico, Saudi Arabia, Netherlands, Qatar, Iran, Japan and Turkey,
FDI Foreign Direct Investment, FIPB Foreign Investment Promotion Board

AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (2/2)
100 per cent tax exemption for airport projects for a period of 10 years
Taxes and duties Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers are exempted
completely from customs and countervailing duties
In the Union Budget for FY13, the Finance Minister has proposed budgetary support worth
USD58.3 million to AAI to develop airport infrastructure in the North-Eastern states of India
At the same time, the aviation regulator DGCA has been allocated USD12.5 million for its
development plan
Budgetary support In the Union Budget for FY15, Finance Minister has said that there are 7 airports under
construction which includes Guwahati, Dibrugarh, Silchar, Agartala, Shillong, Imphal, and
Dimapur. India also plans to build 200 low-cost airports in the next 20 years to connect
tier-II and tier-III cities in the country
In the Union Budget for FY16, budgetary support of USD13.27 million has been allocated
to the Civil Aviation Sector out of which USD3.65 million has been attributed towards
Pakyong, Sikkim project
Source: Ministry of Civil Aviation
Notes: AAI Airports Authority of India,
DGCA Directorate General of Civil Aviation,

AIRPORTS
AAI LEADS THE WAY IN AIRPORTS INFRASTRUCTURE INVESTMENT
The AAI aims to bring around 250 airports under operation across the country by 2020
Metro airports
The AAI has developed and upgraded over 23 metro airports in the last five years
The Airports Authority of India (AAI) is planning to spend USD1.3 billion on non-metro
projects over the five years (201317); it is mainly focusing on the modernisation and up
gradation of airports; New airports at Itanagar, Kohima and Gangtok are also planned
Non-metro airports The Government of Andhra Pradesh plans to develop greenfield airports in six cities
(Nizamabad, Nellore, Kurnool, Ramagundam, Tadepalligudem, and Kothagudem) under
the PPP model
Upfront subsidy has been proposed through which non-metro airports would be funded by
imposing 2 per cent levy on both domestic and international airfares
Over 30 airport development projects are under progress across various regions in
Northeast India
Northeast India AAI plans to develop over 20 airports in tier II and III cities in next five years
The AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and
Dibrugarh as intra-regional hubs
Source: TechSci Research

AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (1/2)
Recourse to the Public Private Partnership (PPP) model has boosted private sector investments in airports
PPP route for five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) most noteworthy
On December 31, 2014, Government of India decided to transfer four existing airports (Chennai, Kolkata, Ahmedabad and
Jaipur) and two greenfield airport projects(at Navi Mumbai and Goa) into PPP model in order to attract investments from
private players.
Increasing share of private sector in equity component of major airports
74 per cent private share holding in IGI Airport (Delhi) - owned majorly by GMR (54 per cent),
Fraport AG (10 per cent), Eraman Malaysia (10 per cent); rest of the shares owned by
Airports Authority of India
74 per cent private shareholding in CSI Airport (Mumbai) - owned majorly by GVK (50.5 per
cent), Bid Services Division (Mauritius) Limited (13.5 per cent), ACSA Global (10 per cent);
rest of the shares owned by Airports Authority of India
74 per cent private shareholding in RGI Airport (Hyderabad) - owned majorly by GMR (63 per
cent), Malaysia Airports Holdings Berhad (11 per cent); rest of the shares owned by
Government of India (13 per cent) and Government of Andhra Pradesh (13 per cent)
74 per cent shareholding in Kempagowda International Airport (Bengaluru) owned majorly
by Siemens Project Ventures, Germany (40 per cent), Unique (Flughafen Zurich AG) Zurich
Airport, Switzerland (17 per cent), Larsen & Tourbo, India (17 per cent); rest of the shares
owned by Airports Authority of India (13 per cent) and KSIIDC, which is an agency owned by
the state of Karnataka, India (13 per cent)

Note: KSIIDC Karnataka State Industrial and Infrastructure Development Corporation Ltd.
AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (2/2)
Bijapur Airport
Delhi PPP format likely to
(Modernisation, Terminal 3 continue
Terminal 3) construction in Shimoga Airport
Delhi completed in
Mumbai 2010 15 greenfield
(Modernisation) projects with Hassan Airport
Participation in private sector
international participation has
airport projects been approved
Terminal 3 - Total in May 2015 Gulbarga Airport
Hyderabad
cost
USD2.7 billion Mopa Airport, Navi
(including Terminal 3 Mumbai Airport, Shirdi
Bengaluru USD5.8 billion of and Sindhudurg
and 1- D) investments likely; Airports, Kannur and
Aranmula Airports,
Durgapur Airport,
USD6.1 million of
Dabra Airport,
investments has Pakyong Airport,
been approved for Karaikal Airport and
Shimoga Airport in Kushinagar Airport
July 2015

AIRPORTS
SUCCESSFUL PPP AIRPORTS IN INDIA
Presently India has five PPP airports each at Mumbai, Delhi, Cochin, Hyderabad and Bengaluru, which together handle over
60 per cent of countrys air traffic
Government of India has approved 15 greenfield PPP projects which are expected to increase the air traffic in India. These
projects would be setup in Goa, Navi Mumbai, Maharashtra, Bijapur, Gulbarga, Karnataka, Kerala, West Bengal, Madhya
Pradesh, Sikkim, Puducherry and Uttar Pradesh.
Type of project/
Name of airport Operator Revenue sharing
PPP structure
Chhatrapati Shivaji Mumbai International Airport Ltd 38.7 per cent of gross revenue to be
Brownfield/BOOT
International Airport (MIAL) shared with AAI
Indira Gandhi Delhi International Airport Ltd 45.9 per cent of gross revenue to be
Brownfield/BOOT
International Airport (DIAL) shared with AAI
Rajiv Gandhi GMR Hyderabad International Concession fees - 4 per cent of

Greenfield/BOOT
International Airport Airport Ltd (GHIAL) gross revenue to be shared with AAI
Bengaluru Bengaluru International Airport Concession fees 4 per cent of

Greenfield/BOOT
International Airport Ltd (BIAL) gross revenue to be shared with AAI
Payment of dividend to the
Cochin Cochin International Airport Ltd Greenfield/BOO Government towards their 26 per
International Airport (CIAL) cent of equity capital
Source: Association of Private Airport Operators, TechSci Research

Notes: BOOT - Build Own Operate Transfer; BOO - Build Own Operate

AIRPORTS
FOREIGN PLAYERS ARE SHOWING INCREASING INTEREST IN THE SECTOR
Major foreign players Airport Stake (%) Description
Airports Company South Mumbai International

10 Operates and owns nine airports in South Africa
Africa Global Airport Pvt Ltd
Delhi International Airport Operates and manages 5 international gateways,

10
Pvt Ltd 16 domestic airports, to 18 short take-off and
Malaysia Airports Holdings landing ports (Short Take-off and Landing ports)
Berhad Hyderabad International that serves the rural and remote areas in
11
Airport Pvt Ltd Malaysia
Global airport operator that offers airport

Frankfurt Airport Services Delhi International Airport management services including terminal and
10
Worldwide Pvt Ltd traffic management, baggage and cargo
handling, and aviation ground handling
AirAsia is a Malaysian low-cost carrier. It has

formed a joint venture AirAsia (India) Pvt Ltd with
Joint venture with Tata Tata Sons (30 per cent stake) and Arun Bhatia
AirAsia 49
sons and Arun Bhatia via Telestra Tradeplace (21 per cent stake) in
March 2013. Tata Sons planning to raise its
stake to 41.06% as on August 14, 2015

AIRPORTS
OPPORTUNITIES
JANUARY 2016
AIRPORTS
OPPORTUNITIES
Policy support and demand Huge potential to develop Leverage on non-

growth unlocking large India as an MRO hub aeronautical revenues,
investment potential improved technology
The Indian Aviation sector likely to The Indian Aviation Industry aims to Airport developers can now
see investments totalling USD12.1 boost MRO business in India, which draw on wider revenue
billion during the Twelfth Five Year is currently worth US500 million and opportunities such as retail,
Plan is estimated to grow over US1.5 advertising and vehicle
billion by 2020 parking
Of the total investment, USD9.3
billion is expected to come from the Indian airline companies spend over Future operators will benefit
private sector 1315 per cent of their revenues on from greater operational
maintenance, which is the second- efficiency due to satellite
Success of PPP formats will raise highest cost component after fuel based navigation systems like
investment in existing and Project Gagan which is in
greenfield airports Inauguration of MRO facility at development phase
Hyderabad in May 29, 2015 by Air
Private sector participation in six India Engineering Services Limited
existing airports operated by AAI is (AIESL) which is a 100% owned
likely to increase investment subsidiary of Air India
opportunities for airport sector
Notes: Project Gagan is directed towards transitioning from a ground-based navigation system to a satellite-based one. AAI and ISRO are
jointly working on this. A Space Based Augmentation System (SABS) will be operational by 2013,
MRO Maintenance, Repair and Overhaul

AIRPORTS
SUCCESS STORIES
JANUARY 2016
AIRPORTS
IGI INTERNATIONAL AIRPORT, DELHI - A COMPELLING SUCCESS STORY
Awarded at the Skytrax World Airport Awards 2015 for the Best Airport in Central Asia region and for the Best Airport
Staff. Also, they were felicitated with the prestigious Golden Peacock National Quality Award 2015 for their continuous
efforts in building a culture across IGI Airport
Ranked first in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers) up
from second in 2012
Delhi International Airport Ltd became the first in the world to receive the ISO 22301:2012 certification for its robust business
continuity management system
Phase I Final
Facts and features
Passenger Traffic: 41.0 mn (FY15) 100 million (by 2020)
Passenger handling
34 million (60 million as on October
Aircraft movement: 0.3 mn (FY15) capacity per annum 2013)
Cargo: 0.7 mn tonnes (FY15)
Terminal 3 Area (acres) 1,907 5,106
Retail space: 0.2 mn sq feet

Apron area: 6.7 mn sq feet Operational status Completed on Mar-2010 Ongoing 20-year project
Multi level car park: 4,300 cars/day
(mn: million; sq: square)
Phase 1 of modernisation of IGI International Airport (at a cost of INR86 billion) involved
renovation of terminals 1A, 1B, 1C and Terminal 2. It also included construction of a
new domestic terminal along with an integrated passenger terminal (Terminal 3)
Source: Delhi International Airport Ltd, Association of Private Airport Operators,

Airports Authority of India, TechSci Research;
Note: ACI Airports Council International
AIRPORTS
CSI INTERNATIONAL AIRPORT, MUMBAI - HARNESSING THE POWER OF PPP
During the World Travel Awards, 2015, CSI International Airport, Mumbais GVK Lounge at Terminal 2 has been felicitated
with Asias Leading Airport Lounge Award. Also, the Architizer A+ Award for the Best Architectural Structures in the
World was bagged by CSI International Airport in the Transportation-Airports category, 2015
Ranked fifth in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers)
Plans to increase the handling capacity at the airport from 36 to 48 flights/hr and to increase the passenger capacity to 40
million annually
Facts and features Modernisation of the Mumbai International Airport will

entail investments worth USD1.3 billion over a period of
In FY15, CSI handled
20 years
Passenger traffic: 36.6 million Government of India to provide USD1.1 billion
Parts of the project completed till now:
Cargo movement: 0.7 million tonnes
Phase I (2008): New airport lounges, retail outlets,
duty-free shops, temporary cargo facilities, and
Passenger handling 40 million multilevel car parks
capacity per annum
Phase II (2010): Involved construction of a new
terminal at Sahar, a parallel runway, and new
Cargo handling capacity
1.5 million tonnes cargo facilities
per annum
Source: Airports Authority of India, Mumbai International Airport Ltd, TechSci

Research
Note: ACI Airports Council International

AIRPORTS
USEFUL INFORMATION
JANUARY 2016
AIRPORTS
INDUSTRY ASSOCIATIONS
Airports Authority of India (AAI)

Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24632950
Directorate General of Civil Aviation (DGCA)

Aurbindo Marg, Opp. Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24622495
Fax: 91 11 24629221
E-mail: dri@dgca.nic.in, dfa@dgca.nic.in

AIRPORTS
GLOSSARY
AAI: Airports Authority of India
ACI: Airport Council International
CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
FY: Indian Financial Year (April to March)
So FY10 implies April 2009 to March 2010
GOI: Government of India
INR: Indian Rupee
MRO: Maintenance, Repair and Overhaul
PPP: It could denote two things (mentioned in the presentation accordingly)
Purchasing Power Parity (used in calculating per-capita GDP slide 12, GROWTH DRIVERS)
Public Private Partnership (a type of joint venture between the public and private sectors)

AIRPORTS
EXCHANGE RATES
Exchange rates (Fiscal Year) Exchange rates (Calendar Year)
Year INR equivalent of one USD Year INR equivalent of one USD
200405 44.81 2005 43.98

200506 44.14
2006 45.18
200607 45.14
2007 41.34
200708 40.27
2008 43.62
200809 46.14
200910 47.42 2009 48.42
201011 45.62 2010 45.72
201112 46.88 2011 46.85

201213 54.31
2012 53.46
201314 60.28
2013 58.44
2014-15 61.06 2014 61.03
2015-16(Expected) 61.06 2015(Expected) 63.72

Source: Reserve bank of India,
Average for the year
AIRPORTS
DISCLAIMER
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been prepared by TechSci Research in consultation with IBEF.
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This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of TechSci Research and IBEFs knowledge and
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AIRPORTS

JANUARY 2016 For updated information, please visit www.ibef.org 1

JANUARY 2016 For updated information, please visit www.ibef.org 2

900 Working population (aged

Indias middle income population

JANUARY 2016 For updated information, please visit www.ibef.org 4

Freight traffic also likely to go up as By 2020, the MRO industry is likely

Source: Ministry of Civil Aviation, MRO India, TechSci Research

MARKET OVERVIEW AND TRENDS

India is the ninth largest civil aviation market in the world

India ranks fourth1 in domestic passenger volumes (80.16 million2) as of FY16*

Scheduled airlines: distance

Number of aircrafts 225 1,649 (FY14)

Number of airports 50 125 (FY15)

Source: Airports Authority of India, Ministry of Statistics and

Non-operational Domestic airports

0 0.2 0.4 0.6 0.8 1 1.2

JANUARY 2016 For updated information, please visit www.ibef.org 9

82.00% Jet Airways

Source: AAI, TechSci Research

JANUARY 2016 For updated information, please visit www.ibef.org 11

Passenger traffic increased by 12.47 per cent in FY15 200 35.00%

Passenger Traffic Growth rate

Source: Association of Private Airport Operator, TechSci

JANUARY 2016 For updated information, please visit www.ibef.org 12

11th Plan Period

Source: Airports Authority of India, Ministry of Civil Aviation, TechSci Research

International('000 Tonnes) Domestic ('000 Tonnes)

Source: Airports Authority of India, TechSci Research

JANUARY 2016 For updated information, please visit www.ibef.org 14

Freight Traffic(Million tonnes) Growth

Source: Airports Authority of India, TechSci Research

JANUARY 2016 For updated information, please visit www.ibef.org 15

Total Aircraft Movement Growth

Source: Association of Private Airport Operators,

JANUARY 2016 For updated information, please visit www.ibef.org 16

Domestic aircraft movement increased at a CAGR of 4.86 Aircraft movement growth

In FY16*, domestic aircraft movement stood at 0.689

JANUARY 2016 For updated information, please visit www.ibef.org 17

Development of Hyderabad International Airport; modernisation

Modernisation of Mumbai International Airport

Development of Bengaluru International Airport

Development of Bengaluru International Airport

Development of Simoga and Gulbarga airports in Karnataka

Note: AAI Airports Authority of India

JANUARY 2016 For updated information, please visit www.ibef.org 18

Increasing use of development fees by airport developers and operators

JANUARY 2016 For updated information, please visit www.ibef.org 19

PORTER FIVE FORCES ANALYSIS

Threat of New Entrants* Substitute Products*

Bargaining Power of Suppliers* Bargaining Power of Customers*

JANUARY 2016 For updated information, please visit www.ibef.org 21

JANUARY 2016 For updated information, please visit www.ibef.org 25

Gross domestic product based on purchasing power parity (PPP)

Source: IMF, World Travel and Tourism Council, TechSci Research

JANUARY 2016 For updated information, please visit www.ibef.org 26

Improving tourism infrastructure 120

JANUARY 2016 For updated information, please visit www.ibef.org 27

In FY16*, Indias imports and exports were 200

Growing trade augurs well for airports as they handle 0

JANUARY 2016 For updated information, please visit www.ibef.org 28

Government of India (GOI) envisions airport infrastructure investment of USD11.4 billion

JANUARY 2016 For updated information, please visit www.ibef.org 29