Monday, May 27, 2024

The Concept Of Dual Airports In Metropolitan Cities Is Ephemeral: CAPA India

By Staff Correspondent

CAPA India’s Airport Capacity Saturation Index envisages no capacity challenges at a system level until FY33-FY34 based on the projected structural capacity of 845-893mn, said Kapil Kaul, the CEO and Director of CAPA India while addressing the webinar organised by Capa India on Wednesday to reassess the airport capacity of India.

The director further informed the audience that based on current growth forecasts, the National Capital Region and Mumbai Metropolitan Region will saturate their dual airport systems by the late 2030s. Planning for 3rd airports should commence soon.

Before Kaul, Paramprit Singh Bakshi, the Vice President of the aviation consulting body, stated that the shortage of airport infrastructure during the last 16 years was compounded by an inability to optimise the technical and operational efficiency of the capacity that existed to the extent possible.

“Since the second phase of airline deregulation commenced in FY2004, airport infrastructure in India has always been in catch-up mode, with demand frequently outstripping supply. Congestion at all touchpoints, e.g. approach roads, in-terminal & airside, compromised the customer experience and significantly increased costs for the entire system, i.e. airports, airlines & passengers to a level not accurately captured,” he concluded.

Kapil Kaul also indicated a better future by stating that from the perpetual airport capacity deficit for the last 16 years, we may be headed for a significant surplus for the next 10-12 years. Indian airports – current & in the pipeline – have an estimated structural capacity of around 900mn annual pax.

Further, he also suggested that we move from a relatively ad hoc approach to infrastructure development to one that maximises available capacity and maximises the deployment of integrated digital platforms to achieve this. “Economic regulation needs to be reviewed and designed to incentivise cost reduction & revenue maximisation. The current model neither encourages CAPEX and cost optimisation, nor efficiency & productivity to the extent required,” he informed.

While addressing one of the questions about the much-need approach towards achieving the set target, Mr Kaul said that “To move from where we are, to where we need to be, will require a centralised planning system which has the appropriate expertise and should not be hampered by bureaucracy, and must be able to plan dynamically in response to external factors.”

Discussing the future approach, the director added, “Based on current growth forecasts, the National Capital Region and Mumbai Metropolitan Region will saturate their dual airport systems by late 2030s. Planning for 3rd airports should commence soon. While all of MIAL, BIAL and CIAL’s debt is rupee-denominated, most DIAL and HIAL’s debt is in foreign currency.

“Indian airports are estimated to require USD77bn of CAPEX over the next 20 years, which will likely consist of USD54bn of debt and USD23bn of equity. USD3.0-6.4bn of funding will be required every year till FY2042. Noida International Airport is a remarkable case study of a 100% FDI-funded airport, bringing in a new set of promoters and investors. It also indicates that airport economic regulation has matured,” he concluded.


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