Effective Traffic Handling and Implication on Low Cost Carriers in India

Secondary Airports: Effective traffic handling and implication on low cost carriers in India

        Paper prepared for        

International Conference on Management of Infrastructure

UPES, Dehradun, February 6-7, 2015

Authors

Shravan Kumar                                                                            Gautham Mahesh

B.S Airline and Airport Management                                             B.Tech Aerospace Engineering

1st year MBA Aviation                                                                    1st year MBA Aviation

Tel: +91 8979426286                                                                      Tel: +91 9047549710

shravan1991@gmail.com                                                                gautham0812@gmail.com 

Nirmal Kumar

B.Tech Aerospace Engineering

1st year MBA Aviation

Tel: +91 9842003582

nirmal.aviation@gmail.com

ABSTRACT

Exorbitant airport charges at Greenfield airports have led to increasing operation costs of LCC’s. With flourishing air traffic, metropolitan airports across the country are saturating. Developing low cost secondary airports that supplement primary airports, traffic can be better organized. This is contrary to the current Governments policy of prohibiting operations of any commercial airport within 150 kilometer radius of an existing Greenfield airport. To deal with this issue the study emphasizes on a new strategy to share the primary as well as the secondary airport operations under a single operator. Introducing a concept of sharing the ATC services between the airports. Development of existing non-operational airports could hold the key. The study includes a comparison of secondary airports towards traffic handling and its benefits on LCC's in Europe and US. It will provide airport operators and policy makers a speculative model of low cost secondary airports and its benefits on the Indian Airline market.

Contents

1. Introduction………………………………………………………………………………….   5
2. Concept of Low Cost Secondary Airports…………………………………………………..   6
3. An Outlook of a Successful Secondary Airport Model……………………………………..   8

1. Ownership………………………………………………………………………………   9

1. Development of Existing Non-operational Airports………………………………………...  11
2. Secondary Airport Facilities – A Cost Cutting Approach…………………………………... 14

1.  Low Cost Terminal…………………………………………………………………….. 14

1. Shared ATC…………………………………………………………………………………. 16

1.  Concept………………………………………………………………………………... 16
2.  Benefits…………………………………………………………………………………17
3.  Challenges……………………………………………………………………………... 17

1. Single Ownership Model……………………………………………………………………. 17
2. Conclusion…………………………………………………………………………………... 18
3. References

Abbreviations

1. IGIA – Indira Gandhi International Airport

2. CSIA – Chhatrapati Shivaji International Airport

3. CIA - Chennai International Airport

4. KIA – Kempegowda International Airport

5. RGIA – Rajiv Gandhi International Airport

6. NSCBIA – Netaji Subhas Chandra Bose International Airport

7. LCC – Low Cost Carriers

8. FSC – Full Service Carriers

9. ATC – Air Traffic Control

Tables

Table 1.1 – Comparison of passenger traffic between Heathrow, Stansted and Gatwick airports

Table 2.1 – Indian Metropolitan airports and their predicted years of saturation.

Table 2.2 - Proposed secondary airports for the current metropolitan airports.

Introduction

Over the past decade, India has seen a rapid growth and development in the aviation sector. From a poorly managed and lowly invested sector, the Indian aviation industry has climbed the ladder to a more liberalized and investor friendly sector. The advent of privatization and the introduction of LCC’s have been the key contributors to the growth. The sector now boasts of 10 major scheduled airliners and world class airport infrastructure at tier one cities. The transfer of the country’s major airports to private players under the public private partnership has led to the development of airport infrastructure that competes with leading airports across the globe. Also factors like a 100% FDI limit in airport investments and the birth of AERA have made the aviation platform a more stable one. The rise in competition among airliners is a consequence of the rising number of low cost carriers introducing themselves into the market. This has fuelled the air traffic growth in the country. Airports like Delhi, Mumbai, Cochin, Bangalore and Hyderabad has seen a traffic increase of 7-10% in the last one year. The positive indicators to India’s aviation developments are many. Accelerated fleet acquisitions, increase in support organizations like MRO’s, Ground Handlers, Fueling companies, etc. Liberalizing bilateral traffic rights have all promoted the aviation industry. All major airports across the country have been providing state of the art facilities to all passengers and users over the years. But are the airports ready to handle the rising the air traffic growth in the future poses a big question. According to a recent CAPA report, it has been found that India is under prepared to handle the growth challenges ahead and will need a massive investment of up to USD 40bn in airport development by 2025. The investment is required in terms of airport expansion projects and construction of new green field airports. The Indian domestic air traffic rose by 4.43% in the year 2013 and 16.3% in the year 2014. The scheduled domestic carriers carried over 673.83 lakh passengers during the year and this was driven by the series of discounted ticket offers by Indian carriers. CAPA predicts the Indian air traffic to rise to 4520 lakhs by the year 2020. This would mean increased fleet acquisitions by airliners and therefore increased facilities required at airport. Passenger handling and airline operations management is going to pose a serious challenge on current airport infrastructures. The need of the hour is increased airport facilities. Development of infrastructure and airport expansion can only handle traffic for a few more years. New Greenfield projects close to saturating airports looks like a viable option. The development of secondary airports that could act as a support to handling passenger traffic at primary and over congested airports is the key.