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AIRPORTS AUTHORITY OF INDIA
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CORPORATE PLAN
2017-26
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MISSION
“To be the foundation of an enduring Indian aviation network, providing
high quality, safe and customer-oriented airport and air navigation services,
thereby acting as a catalyst for economic growth in the areas we serve”.
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VISION
AAI's Vision till 2026 is:
“To be the principal aviation services provider in the country, AAI shall
adopt and facilitate the use of contemporary air navigation services;
upgrade and develop airport infrastructure;
support improving air connectivity at unserved and under-served airports;
have a restructured organization;
focus on profitable operations at major airports through continuing
efforts on cost reduction and enhancing non-aeronautical revenue.”
Contents
Foreword by Chairman, AAI 12
Preface by Member Planning, AAI 14
1. Introduction 17
1.1. Background 17
1.2. Corporate Plan 2017-26: The Context 17
1.3. Objective and Approach 18
1.4. This Document 19
2. Internal Assessment 21
2.1. AAI’s Mandate and Services Provided 21
2.2. Resource Assessment 26
2.3. AAI’s Performance 31
2.4. Summary of Internal Assessment 39
3. External Assessment 41
3.1 PEST Framework 41
3.2. Summary of External Assessment 53
4. Market Assessment 55
4.1. Existing Market Constituents 56
4.2. Allied Services 68
4.3. Understanding and Managing Customer Expectations 77
5. SWOT Analysis 81
5.1. Key Strengths 81
5.2. Key Weaknesses 83
5.3. Major Opportunities 84
5.4. Major Threats 85
5.5. Summarizing the SWOT 86
6. Setting the Vision and Mission 89
6.1. Setting the Mission Statement 89
6.2. Setting the Vision Statement 90
7. Corporate Agenda: Priorities, Action Areas and Strategies 95
7.1. Introduction 95
7.2. Framework 95
7.3. Priorities for AAI 96
7.4. Action Areas for the Plan Period 99
7.5. Strategies 100
8. Corporate Plan Monitoring and Review 119
8.1. Corporate Plan Monitoring and Review 119
8.2. Summary 123
Amritsar Airport
1. Introduction
1.1. Background Indian airspace extending beyond
The Airports Authority of India (AAI) was the territorial limits of the country,
constituted by an Act of Parliament and as accepted by International Civil
came into being on 1st April 1995 by Aviation Organization (ICAO).
merging the erstwhile National Airports ¾¾ Provision of visual aids.
Authority (NAA) and International ¾¾ Provision of communication and
Airports Authority of India (IAAI). navigation aids, viz., instrument
The merger brought into existence a landing system (ILS), doppler VHF
single organization entrusted with the omni directional range (DVOR),
responsibility for creating, upgrading, radar etc.
maintaining, and managing civil 1.2. Corporate Plan 2017-26:
aviation infrastructure both on the The Context
ground and in air space in the country. As mentioned above, since its inception
AAI manages 125 airports, which in 1995, the Airports Authority of India
include 21 international airports (3 civil (AAI) has been at the helm of affairs in
enclaves), 8 customs airports (4 civil the development of airport infrastructure
enclaves), 77 domestic airports, and and management and control of airport
19 domestic civil enclaves at defence operations and air navigation services
airfields and provides air navigation in India. Over the past two decades, AAI
services for over 2.8 million square has been at the forefront of modernizing
nautical miles of air space. In terms of and developing airside & terminal side
administrative control, AAI has divided infrastructure, air navigation services,
its airports under five regions, namely and improving its services at airports
Northern, Eastern, Western, Southern to deliver a better travel experience
and the North-East. to passengers. These measures have
AAI’s functions are as follows1: resulted in improved air safety and
¾¾ Design, development, operation and passenger satisfaction as is reflected in
maintenance of international and passenger experience survey results.
domestic airports and civil enclaves. There have been remarkable changes
¾¾ Construction, modification and in the Indian aviation sector since the
management of passenger terminals. inception of the AAI. Various policy
¾¾ Development and management of measures in the late 1990s, such as
cargo terminals at international and the repeal of the Air Corporation Act,
domestic airports. Open Skies Policy & and the promotion
¾¾ Provision of passenger facilities and of foreign direct investment in aviation
information systems at the passenger and airport infrastructure allowed the
terminals at airports. flow of private investments in aviation in
¾¾ Expansion and strengthening of the form of the emergence and active
operational areas, viz., runways, participation of new airlines. Other
aprons, taxiway, etc. factors such as economic growth and the
¾¾ Control and management of the influx of foreign tourists also supported
1
http://www.aai.aero
Multiple
Internet External Market Management Secondery
Assessment Assessment Assessment Research
Workshops
Aspirations of
SWOT Management other Airport
Aspirations Authorities
Mission
Vision
Strategies
Indore Airport
2. Internal Assessment
The internal assessment undertaken as itself, data from other/secondary sources, and
part of preparation of this Corporate Plan from interaction and consultation within the
document has focused on three key aspects organisation and with stakeholders outside the
– understanding of the mandate and services organisation.
delivered by AAI, analysing resources available The focus of this assessment was to identify
with AAI to discharge its mandate, and analysing AAI’s potential strengths / areas of comparative
AAI’s performance on certain parameters. To advantage as well as potential weaknesses /
do so, AAI has used primary data collected by areas of vulnerability.
Mandate and
Services
Under this head, an
assessment of the
current service portfolio
has been undertaken
- airport services; ATC/
CNS services; cargo
operations
Resources Performance
Under this head, an Under this head,
assessment of resources the financial
has been undertaken and operational
- physical resources, performance of
manpower and AAI over the past
organizational few years has been
resources analysed
2.1. AAI’s Mandate and Services Provided are summarized along with the extent
As per the provisions of the AAI Act, the to which AAI is currently providing these
gamut of services to be provided by AAI services.
Over the years, AAI has gained significant expertise in planning, designing and
developing airports. AAI has successfully completed the modernization of airports in
both tier I and tier II cities. AAI’s expertise in development works have been used by
other government enterprises like Air India, Bureau of Civil Aviation security (BCAS),
Border Security Forces (BSF), Defence Research and Development Organisation
(DRDO), etc., in the form of deposit works.
Mumbai, New Delhi • The upgrade of automation systems to (Auto Track-Ill) with new air
traffic controller assistance features such as arrival manager, depar-
ture manager etc. at Mumbai and New Delhi airports
• Advanced surface movement ground control systems (ASMGCS)
to improve efficient handling of aerodrome traffic (at Mumbai and
New Delhi airports)
• Automatic dependent surveillance to enhance the surveillance of
suitably equipped aircraft over the entire flight information region (at
Mumbai and New Delhi airports)
Hyderabad, • Advanced integrated automation systems that integrate state-of-the-
Bangalore art radars, flight data processors, air situation display, advanced
surface movement ground radars, have been installed by SELEX
Integreti for providing effective air traffic management
Chennai, Kolkata • An ATS modernization project is underway for replacing old radars,
surveillance systems by the latest state-of-the-art technology on par
with Mumbai/Delhi to provide a common platform for integration of
entire systems over Indian airspace, which will effectively increase air
traffic capacity and bring synergy in ATS operations
Nagpur/ Vara- • Integration of radar with flight data processors has been completed
nasi/ Ahmedabad/ by Electronics Corporation of India (ECIL) in collaboration with AAI
Trivandrum/ for providing indigenous automation solutions for effective air traffic
Mangalore management within the designated airspace
• Initiatives to enhance the standards of ATS
Mumbai, Chennai • Established a number of ATS connector routes in airspace to facili-
tate performance based navigation (PBN) operations
Delhi, Mumbai, • Introduced PBN, standard instrument departures (SIDs) and standard
Ahmedabad and terminal arrival routes (STARs) to reduce delays to aircraft
Chennai
Source: AAI website5
Source: http://www.aai.aero/public_notices/aaisite_test/airtraffic_management.jsp
5
19
20
15
12
9 8
10 7 7
6 6 5
4 3 4
2 2
1 0 0 1 1 0 0 0 0 0 0 0 0 0 0
0
Domestic International Custom Domestic International Custom
Operational Non-Operational
Exhibit 7: Average terminal capacity utilization for AAI and other airports
100%
90%
80%
70%
60%
50%
40% 70% 69% 81% 78% 68% 66% 92% 86%
30%
20%
10%
0%
AAI JV/Pvt./SG Delhi (DIAL) Mumbai
(MIAL)
7
A comparative analysis with other airports in the country shows that some of these airports are operating at higher
utilization levels.
Chairman
AAI revenues
31%
8000
5,879
Revenue
6000 4% 11%
4,273 4%
21%
9%
4000 4% 13% 27%
17%
10% 22%
2000 24%
36% 24%
36%
0
2008 2012 2016
Others Cargo Airport Lease Non-Aero Aero ANS
1%
4000 4% 18%
2,469 23%
3000 2,469
2% 26%
2000 22% 10%
49%
1000 29%
46%
37%
0
2008 2012 2016
Gross expenses Finance Costs
Administrative & Other expenses Depreciation
Operating expenses Employee Benefits
Exhibit 13: Expected funding sources for proposed capital expenditure over 2016-20
in INR Crore
Ahmedabad
Bagdogra
Chandigarh
Chennai
Goa
Guwahati
Juhu
Kolkatta
Leh
Lucknow
Portblair
Pune
Tiruchirapalli
Source: AAI
250
Passengers in millions
200
150
100
50
0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Bhopal Airport
Ahmedabad Airport
Technology
EXTERNAL
ASSESSMENT
Economic
& NCAP
Industrial Policy &
growth Regulatory
Tariff
Regulation
Economic
Mysore Kotaw
Pantnagar Salem
Pondicherry Shimla
Porbander Sholapur
Surat
Shillong
Source: AAI
3.1.1.7. Safety and Security Regulation procedures by, in the case of India, the
In India, safety standards for airport DGCA, through its “universal safety
operations are set by the Directorate oversight audit programme”.
General of Civil Aviation (DGCA) on the The Bureau of Civil Aviation Security
basis of the standards, recommended (BCAS) is another regulatory agency
practices and procedures (SARP) whose main responsibility is to lay
developed by the International down standards and measures in
Civil Aviation Organization (ICAO). respect of the security of civil flights at
DGCA acts as the regulating agency international and domestic airports in
responsible for adopting the standards India. BCAS’s functions include laying
set by ICAO and incorporating down aviation security standards
recommended practices and in accordance with the Chicago
procedures shared by ICAO. Convention of ICAO for airport
AAI needs to adhere to the safety operators, airlines operators, and
standards and regulations laid down their security agencies responsible
by the DGCA. Further, ICAO regularly for implementing AVSEC measures.
monitors safety trends and indicators It also monitors the implementation
and audits the implementation of its of security rules and regulations and
standard, recommended practices and carries out surveys of security needs.
Exhibit 20: Growth in domestic air passenger traffic and India’s economy
Traffic growth maps GDP growth closely
12% 40.00%
10% 30.00%
8%
20.00%
6%
10.00%
4%
2% 0.00%
0% -10.00%
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
80000 150
60000
100
40000
50
20000
0 0
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
80000 250
200
60000
150
40000
100
20000 50
0 0
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Private Final consumption expenditure (INR billion), LHS
Passenger traffic (in millions), RHS
15% 40.00%
30.00%
10%
20.00%
10.00%
5%
0.00%
0% -10.00%
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Manufacturing Disposable
11.3% Industry Personal
6.0 % Income
2015-20
2015-20 Rs
10.8%
Services 11.0% GDP per
Industry capita (PPP 2015-20
2015-20 basis)
Japan plans to introduce biometric data – a photo of a passenger’s face and fingerprint
information – with a mobile unit to reduce queuing at immigration counters at airports. It
will first be used at Kansai International Airport in Osaka, Naha Airport in Okinawa and
Takamatsu Airport in Kagawa Prefecture.
13
Source: “Smart Airports: Transforming Passenger Experience To Thrive in the New Economy”, July 2009, Cisco
Internet Business Solutions Group (IBSG)
Trivandrum Airport
• Inflight catering
• International consulting
oppurtunities
Area of
Business
Step 4
Step 3
Assessment
of
competition
Step 2
Assessment of
required infrastructure
growth in future
Step 1
Drivers of growth
and projected
growth in traffic
Studying current
market trends
35.00%
Air Deccan 31.44%
30.00% starts
operations Discontinuation
of Kingfisher
25.00%
23.71%
21.25%
20.00%
17.62%
15.90%
15.00% 9/11
Crises 13.16%
10.00%
7.67% Global economic
meltdown
5.00%
0.00%
-1.79%
-5.00%
-4.86% -6.85%
-10.00%
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
200
150
100
50
0
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
Domestic International
4.1.1.2. Drivers of growth and projected economic growth and domestic traffic
growth in traffic growth.
Economic growth has been one of the Increase in passenger traffic has
key drivers of growth in passenger also been encouraged by changes
traffic in India. Over the last 15 years, in the aviation landscape in India.
the Indian economy has grown at a After liberalization of India’s aviation
CAGR of 13.4% and the passenger sector in the early 1990s, several
traffic has grown at a CAGR of private airlines emerged and began
14.2%. As can be seen in Exhibit 26, operations in India. The year 2003
there is a positive correlation between heralded the phase of low cost airlines
200 160
140
Domestic pax traffic (millions)
120
100 80
60
50 40
20
0 0
1998
2001
2004
2007
2010
2013
2016
Passenger traffic Passenger traffic
Source: International Monetary Fund (IMF) reports, DGCA annual air transport reports
with Air Deccan starting operations Given the number of new airlines
that year. With a number of other either beginning or planning to begin
airlines operating on this model, LCCs operations on the LCC model, the
have steadily gained market share14 predominance of LCCs is expected to
and, in 2015, had a market share of continue in the future. An Airbus study
63% vis-à-vis 13% in 2005. projects that the number of people
Organisation for Economic Co- flying in India will increase from 1 in
operation and Development (OECD) 20 Indians in 2014 to 1 in 4 Indians
estimates that the Indian economy will in 2032.
grow at a CAGR of ~6% for the next According to passenger traffic
twenty years. According to a report by projections by AAI, the passenger
India Brand Equity Foundation (IBEF), traffic at AAI airports will increase from
business travel in India is expected to about 93 million to approximately
increase 3-fold to US $60.4 billion, 279 million between 2015 -16 and
spending on leisure travel is expected 2025-26, growing at a CAGR of about
to increase 2.3 times to US $224.6 11.65%. During the same period,
billion and the overall domestic travel the number of overall passengers
and tourism industry is expected to will grow from 224 million to 591
increase 2.8 times to US $349 billion million. A comparison of growth at
by 2024.15 AAI airports with respect to the overall
passenger growth in India is presented
in Exhibit 27.
DGCA data
14
Source: IBEF
15
700
600
Domestic pax traffic (in millions)
500
400
269 289 311
251
300
213 233
195
200 178
163
131 149
183 207 223 240 259 279
100 162
127 144
93 113
0
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
2022-2023
2023-2024
2024-2025
2025-2026
AAI Airports JVC Airports
Source: AAI
Apart from AAI, a number of other mark or if the airline industry is faced
agencies have carried out long term with challenges such as a sudden
passenger forecasts. According to spike in aviation turbine fuel (ATF)
the report prepared by the National prices, low economic growth, high
Transport Development Policy competition etc. As traffic projections
Committee (NTDPC) 2013, total are used to plan capacity expansion,
air passenger traffic is expected to a mechanism for a periodic review of
increase to 655 million, by 2030-31 a traffic projections must form part of the
CAGR of ~10%. According to the long review mechanism of the Corporate
term forecast of Centre for Asia Pacific Plan to ensure the alignment of
Aviation (CAPA), total air passenger planned capacity expansions to
traffic is projected to be 781 million revised traffic projections. The
passengers by the year 2034-35, exercise must especially focus on
growing at a CAGR of 7.32%. traffic forecast around key demand
It, however, needs to be borne and growth centres.
in mind that actual traffic growth 4.1.1.3. Assessment of required airport
may differ from the projections if infrastructure in future
underlying assumptions regarding
To keep pace with growing passenger
the overall growth rate are off the
traffic demand, AAI has drawn up
A number of new green field airport vision and positioning to exploit this
projects are already in the planning growth opportunity.
phase – Navi Mumbai in Maharashtra, 4.1.1.4. Assessment of competition
Bhogapuram in Andhra Pradesh,
Dholera in Gujarat and Mopa in Goa The inauguration of Cochin
etc. Besides, it is projected that new International Airport in 1999 heralded
airports will be required in major cities the era of private sector participation
such as Delhi, Chennai, Kolkata, etc. in airports development / operations
in the Indian airports sector. The
As can be seen from the table above, Airports Authority of India Act was
apart from the planned developments amended in 2003 to allow for public-
by AAI over the next 5 years, green private partnerships (PPPs) in airports.
field airports will need to be developed This was followed by the Delhi and
over the next 10 to 15 years. This could Mumbai airports being bid out by AAI
prove either an opportunity or threat on a PPP basis in 2006. Following this,
for AAI, depending on AAI’s strategic
Government
aims to develop
more than 100
operational
Initiatives taken by airports. Private
state government participation
• Five small airports envisaged on a
by Maharashtra large scale
• 3 small airports
by Karnataka
• Large airports
on PPP basis by
Kerala
Development of
Greenfield airports
in Hyderabad and
Bangalore
Modernization
of Delhi and
Mumbai airports
Development of
airport at Cochin
— First private
airport operator
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
PPP AAI
Source: AAI
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
4.1.2.2.
Drivers of cargo traffic and attached to them such as perishable
projected growth in traffic items, high value fashion textiles, gems
As in the case of passenger traffic, & jewellery, etc. In India, as shown in
economic growth has a major impact Exhibit 33, the projected growth in
on the growth of air cargo. Strong export demand for auto components,
economic growth favours increase in pharmaceuticals and processed food
industrial activity, which has a positive exports as well as growth in domestic
impact on the air cargo business. e-commerce, textile and electronics
industries augur well for the air cargo
Typically, air cargo constitutes low industry over the next ten years.
volume, high value products or
products with significant time value
Total
Air-cargo
e
35% 24% 11%
39% share 2014-20 2012-20 2014-21
Domestic
E-commerce Electronics Textile
Industry Industry production
According to AAI estimates, all India to the Airbus Global Market Forecast
air cargo traffic is expected to increase (2011), the express industry in India
to 3.6 MMT by 2020-21; of this, is expected to demand 110 small jet
domestic freight, which contributes freighter aircraft (which can carry a
about 40% share of the traffic, is payload of 10 to 30 tons) by 2029,
expected to reach 1.4 MMT at a which is 15.4% of the global small jet
CAGR of 6.9%. International freight is freighter aircraft demand.
expected to grow at a CAGR of 5.9% The e-commerce industry is expected
to reach 2.16 MMT. NTDPC’s forecast, to contribute to driving the domestic
however, is more optimistic. The cargo / express cargo market.
report16 projects total freight volume The significance of e-commerce
at around 4.9 MMT by 2020-21. can be gauged by the fact that the
The express cargo industry in India is e-commerce market in India was
also likely to contribute to the growth estimated at USD 17 billion for the year
in domestic cargo traffic. According 2014. According to a report on the
Working Group on Civil Aviation Sector, National Transport Development Policy Committee, June 2013
16
Source: NTDPC
http://www.assocham.org/upload/event/recent/event_1113/Background_Paper_Future_of_e-Commerce_web.pdf
17
18
“IATA Air Passenger Forecast Shows Dip in Long-Term Demand”, Nov 26, 2015, IATA official website
Bargaining power
of suppliers: Low
Technical expertise is
Bargaining power
AAI’s strength but AAI of customers: Low
currently faces manpower Bargaining power limited
shortage . In some by project budgets
projects, collaborate with specified by government
regional experts organizations
AAI has a vast pool of talent, which 4.2.3. Maintenance, repair and overhaul
has experience in various airport (MRO)
functions from air traffic management
4.2.3.1. Current market trends
to designing and developing civil
structures. AAI’s adoption of advanced The current MRO market of
technology in ANS compared to Indian carriers is estimated to be
countries in South Asia and the approximately INR 500 crore (USD
Association of Southeast Asian Nations 750 - 800 million). While the market
(ASEAN) gives it an edge in offering for MRO is large, there are only a few
consulting services in the region. In the MRO service providers, the key service
past, AAI has carried out development providers’ being Air India Engineering
works in North and Sub-Saharan Services Limited (AIESL), Air India
Africa, in Libya, Algeria and Tanzania. Nagpur Mihan SEZ, Air Works India
Both Asia and Africa are fast growing Pvt. Limited, Cochin International
aviation markets and AAI will explore Aviation Services Ltd and MAS-GMR
the possibility of offering its services in Aero Technic Ltd (MGAT). Exhibit 37
these regions. gives the location of key MRO service
providers in India.
Air India
Engineering
Services Ltd.
(AIESL)
Nagpur
MAS-GMR Aero
Air Works Technic Ltd. (MGAT)
India Mumbai and AIESL
Engineering Hyderabad
Pvt. Ltd.
Bengaluru
Kochi
Cochin International
Aviation Services
One of the key challenges for the fleet. Further there are new entrants
MRO industry in India has been the expected to enter the Indian airline
high tax on such services. Further, industry. Given this, the Indian MRO
there are other challenges that the market is expected to grow further.
industry faces such as problems faced Based on estimates made by Boeing,
in the import of key components and the MRO market is expected to grow
problems arising from the movement at a CAGR of about 7% to reach USD
of experts. 1.2 billion by 2020.
While in the past, steps have been The Government of India, in the Union
taken to boost investment in the MRO budget for 2016-17, has provided
business in India, only a very small the following incentives to promote
percentage – 10% – of the overall investment in the MRO business in
MRO requirement of Indian airlines is India:
met by service providers in India. ¾¾ Tools and tool-kits used by the
On account of such challenges, MRO have been exempted from
approximately ninety percent of customs duty
expenses on MRO by Indian carriers ¾¾ The procedure for availing of
are being spent outside India, mainly exemption from customs duty have
in Sri Lanka, Singapore, Malaysia and been simplified
the UAE.
¾¾ The restriction of one year for
4.2.3.2. Future outlook utilization of duty free parts have
With growing air traffic, Indian been extended to three years.
airlines are expected to expand their
NCAP, 2016
• Three Ground Handling Agencies (GHA) including Air India’s subsidiary/JV should
operate at all major airports as defined in the AERA Act 2008.
• Non-major airports are exempted from minimum number of ground handlers. Airport
operator will decide on the numbers, based on the traffic output, airside and terminal
building capacity.
In case of third party ground handling, Air India’s subsidiary/JV will match the lowest royalty/
revenue offered by the other ground handlers. All domestic scheduled airline operators
including helicopter operators will be free to carry out self-handling at all airports
Barriers to entry:
High Threat from
Long standing Substitution:
relationships with various High
local authorities/airlines. Technology upgradation
Also, need for high could reduce scope for
capex, technical skills &
Intensity of GHS
manpower training competition:
High
Presence of multiple
third-party GHAs, self-
handling by airlines
Threat from
Substitution
Barriers to entry: High
Low LCC are opting for direct
Low capital investment procurement of snack
Intensity of and beverages
requirement
competition: Restaurant options
High available for passengers
The market is very at the terminal
competitive and
fragmented ~ more than
10 players in the market
already
The assessment indicated that AAI growth will remain a key factor for
does not have any specific established AAI to retain / expand its market.
strength in providing such services in Retention of and an increase in the
a highly competitive, characterised customer base will require meeting
by the presence of several leading their expectations through high quality
international service providers. service at airports.
4.3. Understanding and managing Accordingly, in this Corporate Plan
customer expectations period, concerted efforts to understand
and manage customer expectations
As discussed above, there is strong
will be needed.AAI has already
market potential for AAI to grow in
adopted the practice of measuring
its existing business and possibly
customer satisfaction at its airports
provide new services at AAI airports.
through the ASQ surveys undertaken
In this competitive and fast changing
at 11 AAI airports and the Customer
market, retention of customers and
Satisfaction Index (CSI) satisfaction
Source: AAI
5.1.2. Network of airports across the for cross-border initiatives like Indian
country Ocean Strategic Partnership for
In terms of the number of airports being Reduced Emission (INSPIRE).
operated, AAI is the largest airport 5.1.4.
Consistent profitability and
operator in the country. Currently it financial resources
owns/operates 125 airports in the AAI has been a consistent profit
country and manages approximately making public sector entity. The
41% of the total passenger traffic. financial strength of AAI is evident
This network of airports is a significant from the cash reserves it had at the end
strength for AAI and can be leveraged of FY 15. AAI has also paid dividends
to explore opportunities in extending to the Government of India in the past
value propositions for its different years. The revenue between FY 07 to
customers. FY 15 grew at a CAGR of 13 per cent,
5.1.3. Expertise in providing air while profit before tax has grown at
navigation services around ten percent.
AAI has monopoly in providing air 5.1.5. Experienced Manpower
navigation and traffic management AAI has professionals with diverse
services in the country, excluding the experience in the fields of airport
airspace identified for military use. planning, engineering and
Over the years AAI has developed development, airport operations, etc.
significant expertise in providing It also has experienced manpower
these services including developing in other areas such as air navigation
and adopting contemporary services, cargo terminal development
technology systems such as GAGAN. and operations etc. Such diverse
The organization’s competency in experience provides AAI the strength
navigation services is well recognized to expand its current business, within
in the South Asia region. AAI has won India and in foreign territories.
the prestigious Jane’s ATC Award21
21
Reference - http://www.aai.aero/misc/IT_Airport28513.pdf
FY 15-16
Pax (in million) Gross Revenue Share of
non-aeronautical
Hyderabad – GMR 12.39 6,155 (INR mn)* 32.79%
5.2.2. Low growth of cargo business 5.2.3. Manpower shortage and training
Cargo revenues22 for AAI have been Manpower shortage is currently at
stagnant since 2007 and are less 40% of the sanctioned positions at AAI.
than two percent of total revenue. Interactions with various departments,
While cargo operations at Delhi and including Planning, Engineering,
Mumbai airports have increased Operations, Commercial, Air
significantly over the last few years, AAI navigation, Corporate Planning &
has not been able to expand its cargo Management Services (CP&MS) etc.,
business. Less than one-fifth of its suggested that the shortage has
total cargo handling capacity is being affected the performance of various
utilized at four out of nine terminals departments and is becoming a
operated by AAI. Based on interaction constraint for future growth. Further,
with stakeholders, it is understood that there are currently no formalized
lack of marketing to potential users is training programmes for various
one key reason for low cargo volumes. departments including planning,
Other reasons include weak customer operations etc.
responsiveness, lack of flexibility with
cargo department etc.
22
Cargo revenues from operating revenue and expenditure data provided by AAI
23
Marketing function has been recently established by AAI, this is focus on promoting AAI’s services to airlines and
other potential business partners.
24
AAI Profit and Loss Account for year 2015-16
25
http://aera.gov.in/upload/order/566abbbd4c46ffinalorder11122015430opti.pdf
Strength
• Large land holdings
• Network of airports across the country
• Expertise in providing air navigation services
• Consistent profitability and strong financial resources
• Experienced manpower
Weakness
• Low share of non-aeronautical revenue
• Stagnant growth of cargo business
• Manpower shortage and training
• Limited focus on MIS
• Limited focus on Marketing
Threat
• Reliance on revenue beyond the control of AAI
• Obligation to implement RCS
• Competition from other airport developers
• Stricter environment and safety norms
Opportunities
• Enhancing non-aeronautical services at passenger terminals
• Expanding the cargo business
• Monetizing land assets
• Adoption of state-of-art technology
• Marketing initiatives to improve engagement with customers
• International opportunities for consulting and other services
Coimbatore Airport
26
Gerry Johnson and Kevan Scholes: Exploring Corporate
Strategy Text and Cases, seventh edition.
The last column identifies the key key themes need to be considered
themes emerging from the various while reframing the vision statement
interactions and workshops. These for AAI for this plan period.
FIU upgradation
Providing of value added Provision of value added services such as meet and greet etc. at AAI airports
services
Emphasizing environmental Energy efficiency
sustainability and safety
Develop “green airports”
International consulting
Phase Description
ATFM for six metro airports i.e. Delhi, Mumbai, Chennai, Kolkata, Bengaluru
and Hyderabad
• ATFM will be provided for strategic and pre-tactical demand predictions to
determine period of demand vis-à-vis available capacity
• Centralized Air Traffic Flow Management (C-ATFM) will provide capabilities to
model and implement Traffic Management Initiatives (TMIs) to smooth demand to
available capacity via Ground Delay Programs
• For period of significant, unexpected capacity reductions, Ground Stop TMIs will
be modelled and implemented
• CATFM will provide updated demand prediction to monitor traffic management
Phase 1 initiatives (TMI) performance.
• Aircraft operators are provided capabilities to perform schedule management
adjustments to optimize their operations consistent the available capacity determined
by AAI and the constraints of the TMI
Phase 3
Integration with international ATFM according to ICAO regional ATFM plan of Asia
Pacific region:
• The evolution of C-ATFM system in the third phase will be planned to harmonize with
recommendations of Air Traffic Flow Management Steering Group (ATFMSG).
28
Air Traffic Flow Management in India, Strategic Plan for Air Navigation Services 2014- 2018
Interactions
with airlines
to understand
their plans
Inputs
from all
departments
Forecasts of
traffic growth
over the next
few years,
considering
the changes in
environment
Marketing
AAI airports
to airlines,
retailers and
passengers
Joint
marketing Design
promotions
customized
with tourism
department, marketing
industry campaigns
chambers
Airport
Infromal Management
Communication and
Operations
Corporate Corporate
Communication Communication
Airport
Promotion Construction
Projects
Customer
Services Promotion
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Source: Leigh Fisher Survey and analysis of 160 airports worldwide, as of January 2013.
Airport blog / Updated with entries that provide general commentary, Airports own blog or discussion
Microblog descriptions of organized events or content such as forum /
photos or video for readers
Twitter
Online service, platform or site that allows users to
exchange small elements of content such as short
sentences or links
Community Online platforms or sites allowing users to share multi- YouTube, Instagram, Scribd,
media such as photos, music, videos or presentations
Hybrid – The Airport Low to medium risk for the The airport operator builds the facilities and leases the
builds the facility but airport operator O&M to a private player
outsources O&M
Implemented in India at GHIAL (at operation commence-
ment), and at DIAL & MIAL airport through an special
purpose vehicle (SPV) in which the airport operator shares
ownership with partner companies. Implemented Interna-
tionally at South Africa , London and Jeddah
Fully in-sourced – High risk for the airport Development on this model needs detailed viability as-
Airport builds, oper- operator sessment as, apart from capex risk, capabilities in O&M
ates and maintains also need to be considered.
the facility on its own
Implemented Internationally at Tulsa and Tucson Airports
• Based on airport
throughput
• Based on passenger
profile and
Identify requirements
airports for
providing
value added
services
• Study the value
added services being
provided at airports
globally
• Based on passenger
profile, shortlist
services to be
Identify provided
value added
services to be
provided • Implement value
added services at
airports in a phased
manner
• If required, appoint
third-party agency to
provide such services
Provide and train staff
services at
select airports
• Automated electrical power demand and lighting & climate control to reduce
Technology energy consumption at airports
interventions at • ICT-based building management systems to improve operations
airports
7.5.6.2. Develop “green airports” the action plan will be to reduce the
In future, AAI shall design and plan carbon footprint at AAI airports and
terminals in a way that they meet adopt measures to lower the levels
the Green Rating for Integrated of air, water and noise pollution.
Habitat Assessment (GRIHA) or green Measures shown in Exhibit 58 will be
building requirements and achieve a implemented.
rating of GRIHA 4. In this plan period,
Reducing COX, SOX and NOX emissions Promote the use of efficient fuels like compressed natural gas for
from vehicular traffic on airside vehicles on the apron
Comply with restrictions on age of vehicles, as set by state pollution
control boards to reduce COx emission
Introduce new technology like fuel cell for vehicles
Design efficient vehicle movement area on airside to reduce
congestion and hence emissions
Preventing spillage of fuel and other Operationalize a spill management procedure at all airports to pre-
chemicals vent and manage spillage caused by oil, toxic heavy metals, etc.
Maintain a record of all the spills on the apron and measures taken
to mitigate the associated risks
Source equipment to efficiently handle major spills
Monitoring air and water quality Install air and water quality monitoring units within the airport
Install air and water quality monitoring units outside the airport pe-
rimeter, within 2KM of the airport
Operationalize a mechanism to mitigate any ground water pollution
caused by the spillage of chemical or untreated sewage into ground
water
Long-term measures to reduce aircraft Introduce a noise mitigation plan for airports with night time
pollution operations
Prepare a plan to incentivize aircraft to use fuel efficient engines
SMS implementation Level 4 • The final level of SMS maturity is the continuous improvement
(Continuous Improvement, Continued level. Processes have been in place and their performance and
Assurance) effectiveness have been verified.
• The complete Safety Assurance (SA) process, including
continuous monitoring and the remaining features of the other
SRM and SA processes are functioning.
• A major objective of a successful SMS is to attain and
maintain this continuous improvement status for the life of the
organization.
Terminal redesign; enhancing the retail Terminal redesign – AAI has appointed consultants to assess the
/ F&B capture at the airports and new terminal redesigning exercise at some of its airports to enhance their
offerings retail / F&B capture. In this plan period, more airports are likely cov-
ered under a similar exercise.
Enhancing the product mix – In this plan period, AAI can under-
take passenger profiling and record passenger expectations in terms
of retail / F&B capture at the airport. Based on passenger expecta-
tions, the product mix provided at airports can be reconsidered /
changed.
New offerings – Further, in this plan period, new offerings such
as retail kiosks may be provided at select airports. Retail kiosks can
be used for areas that are too small to accommodate retail outlets.
Retail kiosks can be used to sell essential items, e.g., cosmetics or
electronics etc.
JV Model – JV with real estate developer for development and/or operations Medium
Development model – AAI takes full responsibility for the development and opera- High
tion of city-side developments
Identification
Market Market Entry
of airports for
assessment Model
MRO
Implementation Air India Ltd, MRO in GMR’s GHIAL with Ma- Malaysia Aerospace Engi-
Mihan SEZ (which has laysia Aerospace Engi- neering exited the venture
Examples connectivity to Nagpur neering SDN established with GHAIL taking over
Airport) MAS GMR Aerospace the balance 44.61% stake
Engineering Company in 2014
Limited (MGAE) which
started operations in 2011
at an SEZ near Hyderabad
International Airport
Government-to-Government route (G2G) The second mode is to explore G2G route to create opportunities in
route consulting – leveraging the relationships of the Government of India
with other countries and identifying opportunities for AAI to provide
consulting services.
Developing standalone airport brands Potential measures to create standalone airport brands
• Identify airports that AAI wants to develop a brand for
• Identify and communicate specific services that customers should
associate with each airport
• Differentiate services and products according to the needs of cus-
tomers using the airport
• Create a unique identity for each airport to manage customer expec-
tation
The options above are not exhaustive; AAI will detail this further during the plan period and identify and implement
specific measures in this direction.
AAI
Strategies
Change in External /
Market Environment
New New
Opportunities Threats
Use of Review of
strategies progress
Performance review
8.1.1. Annual monitoring and review also cover the annual goal setting
Under this framework, AAI will exercise which provides inputs for
institutionalize an annual monitoring the Memorandum of Understanding
and review mechanism and Corporate (MoU) to be entered into with MoCA.
Planning and Management Services The following are the key steps to be
(CP&MS) will play a pivotal role in undertaken in the annual monitoring
overall monitoring and review exercise. and review exercise.
It is suggested that this exercise will
The Corporate Planning and Management Services (CP&MS) Department would start
Commencement the monitoring exercise on a financial year basis (same as MoU) with a focus on
of monitoring and monitoring / reviewing the implementation of the previous year’s Corporate Plan.
review exercise
CP&MS will review the status of implementation of various strategies and assess
performance against priorities and targets. Based on such a review, CP&MS would
Review of document achievements and shortfalls and the results would be shared with all HODs
performance for review.
Based on the achievements of targets and new opportunities and threats identified,
Developing annual HODs will prepare annual goals and targets. The respective Members will finalize the
goals and action annual goals and targets – to be shared with CP&MS.
plans
CP&MS will consolidate goals and targets at AAI CHQ level. CP&MS will present both
Finalize annual department-wise / consolidated annual goals and targets to the AAI Board to review
goals and action and finalize annual action plans.
plans
8.1.1.1.
Commencement of monitoring to CP&MS Directorate by 15th
and review exercise October.
The monitoring system will coincide ¾¾ CP&MS department shall request
with the annual budgeting exercise all departments to commence
of AAI, which starts with a mid- a broad level external / market
term review in October. The CP&MS environment assessment for
Directorate will initiate the monitoring their departments to assess
and review exercise. This would and understand changes in the
involve the following steps: environment and their effects on
¾¾ CP&MS department shall circulate the department. The departments
templates to various departments would complete such broad level
to complete and return. Various assessment by 31st December and
departments shall be asked to furnish the assessment to CP&MS.
provide information on strategies CP&MS will then provide the
implemented in the assessment consolidated findings of the broad
year; information on goals and external/ market assessment.
action plans for the assessment 8.1.1.2. Review of performance
year; and information on goals Based on the information submitted
and action plans achieved in the by the departments, CP&MS team
assessment year. The departments will review the performance of all
shall provide the information departments of AAI. The review will
1 2 3
Imphal - 06 Nos - - CT 40 - -
(5 No.
A-321)
(1
No.ATR-72)
Dimapur - 04 Nos - - CT 40 - -
(1 No.
A-320) (2
Nos A-321)
(1 No. ATR-
72)
Southern Region
Tirupati - 4 Nos.- C - - - - -
Name of the Covered Cargo handled in FY: 2015-16 (in MT) Annual hold-
airport area (in ing capacity
sqm) (in MT)
International Domestic Total
Note: For Jaipur airport, international cargo handling is outsourced to state government agencies
Stakeholder Comments*
Airline representation AAI should work towards optimum utilization of existing airport infrastructure to intro-
bodies duce efficiencies
(FIA and IATA) Night parking is constrained at AAI airports, which needs attention. More night parking
stands should be added at major airports
AAI should upgrade ground handling system at its airports to help airlines achieve
quicker turnaround time
Lack of night landing facilities at some AAI airports is a constraint for operation and is
affecting passenger growth. More airports should have night landing facilities
Passenger amenities at AAI airports have immense scope for improvement. Toilets,
baby care rooms, lounges, etc., need upgrade and better maintenance
Airlines AAI should consider introducing differential tariffs for LCCs and legacy carriers. This
(Domestic and will help in reducing operating costs for LCCs and hence, cheaper fares, leading to
International) passenger growth
Cost overruns resulting from delays in projects should not be passed on to airlines in
shape of higher tariffs
AAI should involve airlines for consultation before taking up capex projects. This should
be done through the Airport User Consultative Committee
“To achieve highest standards of safety and quality in air traffic services and airport management by providing state-
of-the-art infrastructure for total customer satisfaction, contributing to economic growth and prosperity of the nation.”
Do you think the above appropriately captures AAI’s Mission / Purpose? Would you think any refinements are re-
quired to the same?
As part of the top management of AAI, what do you think AAI should aspire to achieve (“Vision”) over the next 10
years?
What are the changes and trends that will have the greatest impact on AAI over the next decade?
As part of the top management of AAI, what do you think are the key competencies / strengths of AAI which could
be leveraged / help in achieving the above articulated Vision?
In your view, what are some of the big opportunities and key challenges for AAI over the next decade?
What would be some key areas of enhancement for AAI to achieve the above articulated Vision?
Would there be any initiatives / action plans that you think are already being taken / should be taken up that would
be relevant to the Corporate Plan formulation?
Do you have any suggestions regarding the effective implementation of this Corporate Plan across the departments
of AAI?
Aena international To be a leading, benchmark company in the airport Infrastructure management, global
infrastructure management sector worldwide. ambitions, commitment to parent
Participating and having a strong presence in the company
international airport services market is what Aena
Internacional contributes to the Aena group.
CAA Philippines To be a pre-eminent Civil Aviation Authority in the Excellence, global benchmark
world and a global brand of excellence in civil avia-
tion.
Angakasa Pura I To be one of Asia’s ten best airports management Management excellence, regional
companies. ambitions
Angakasa Pura II To become a leading and professional world-class Global ambition, aspirational
airport management company.
Airports Authority of Airports Authority of Thailand operates the World’s Futuristic approach, global ambitions
Thailand Smartest Airports.
ACSA To be a world leading airport business. Global ambition,
Aéroports de Paris Be a leading group in airport design, construction Focused on design, construction and
and operation. ops, ambitious
Munich Airport Living ideas – connecting lives Innovation, people focus
Amsterdam Airport Europe’s preferred airport Excellence, regional focus
Zurich Airport We are the leading transport hub and meeting Transport convergence, people focus,
place in Europe. regional focus
Dubai Airport To always go further and be the world’s leading Global ambition, all around excel-
airport company. lence
Beijing Airport To be a first-class airport management company Quality excellence
Mumbai Airport To be one of the world's best airports that consist- Global aspirations, customer focus,
ently delights customers and to be the pride of
Mumbai.
To establish CPC
& Pharma zone at
Aurangabad /Chennai
/ Bagdogra Airports
etc. depending on the
users requirements
Adopting a Perfor- Adopt a performance Continue the refinement of PBS. Further refinement of PBS.
mance Benchmarking benchmarking system for Include Horizontal and Vertical Setting up of Targets to be
System (PBS)for ANS ANS to measure Safety, Efficiency Parameters. achieved based on PBS.
Capacity, Efficiency and
Environmental Efficiency
Parameters.
Implementation of Flow Management at six Extension of Flow Management Indian ATFM system extend-
ATFM metro airports activities to cater to entire Indian ing ATFM activities across
Airspace neighboring Countries as
“cross-border” ATFM
Overseas consulting Target SAARC countries Target Africa/ Mid East
in Flight Procedure
Design
Finalizing ANS Strate- Update ANS Strategic Plan Update ANS Strategic Plan based
gic Plan to reflect New Civil Aviation on Global Plan (Aviation System
Policy guidance and Asia Block Upgrades- ASBU) Block
Pacific Seamless ATM Plan 1 (2018-2023) modules and
objectives. technology.
Developing R&D Ca-
pabilities
Implementing a Futur-
istic Telecommunica-
tions Network
Airspace Management
Enterprise-wide data
mining for better
informed decisions
Enterprise-wide data
repository with single
point data collection
Implementation of new
Website
Refreshing of Data
Centre Infrastructure
Departmental Action Plan
Directorate of Aviation Safety
Objectives Short Term Medium Term Long Term
To graduate from SMS
Level1-2 to Level4
Establish dedicated
team for safety audits
Reduction in bird strike 5% per year
incidents
Reduction in separa- 5% per year
tion minima infringe-
ment
Reduction in runway 5% per year
incursion
Reduction in flight level 5% per year
bursts
Note: The above list is just representative and not exhaustive. Each department has to define its specific information
requirements.
29
Various media reports and respective airport websites