‘Confident of long-term aviation growth despite shocks’: Noida Airport management

As the NIA is set to start operations, what are the traffic projections for the coming year?

Samra: We start on June 15 with IndiGo, and Akasa Air starts on the 16th, and we will ramp up over the weeks and months to come. We’re starting with 12 flights a day in June. In July, adding more destinations, we will ramp up to 40-42 daily flights. Then gradually further ramp-up will happen. In terms of projections, it is difficult for me to comment on a longer horizon at this stage. But I think in terms of first 10-12 months, we expect approximately 5 million passengers.

When do you expect the second phase of NIA’s development to be triggered? Any timeline based on your internal projections?

Samra: As per our concession agreement, we would officially kick off the (second) phase when we reach about 10 million passengers (per year). But in terms of how the infrastructure needs evolve, just to give you an example, we have already started the work on additional parking stands, so there are somethings that we could add earlier than the rest of the infrastructure depending on the requirement… The airport (in phase one) is built for 12 million passengers (a year).

Schnellmann: The recent events in West Asia have made sort of intermediate predictions just a little bit more challenging. But as I’ve always said, I’m convinced that by the end of this de-cade, construction activities for the next phase will be in full swing. We’ll revisit in a couple of years to see how accurate that was.

The airport is starting operations at a difficult time for the aviation sector. Indian carriers have reduced flights due to the West Asia crisis-related headwinds. How big a concern is it for you? What impact do you expect in the short-term?

Schnellmann: We won the bid to design and build this airport at the end of 2019. Three months later, the bottom dropped out of the aviation market across the world. No one was flying anymore (due to the Covid pandemic). I think to our credit, the shareholders and the lenders, everyone stood by and remained committed to this project.

The years since have proven them and us right. We saw traffic in India rebound very quickly, faster than in many parts of the world. That’s the approach we take to the current crisis as well. It’s a challenging time for aviation but if we zoom out and look at where the industry has come from in the past 15-20 years, and what the outlook is, we remain incredibly confident.

In your talks with airlines on their network development out of NIA, has there been any major rethink that you’ve seen due to the current challenges?

Schnellmann: I think they’re looking at it exactly the same way (as us). Aviation in India remains an absolute growth market, and they’ve committed hundreds of aircrafts each to this market and remain confident in this outlook. One thing we’ve learned, and not just in the past five years, about this industry is that there’s always some surprise, disruption, or crisis. But even through those turbulences, we do see the growth trajectory.

When can we expect the first international flight to take off from NIA? And have the West Asia crisis and closure of Pakistani airspace been speed bumps on that front?

Samra: We expect to start with international operations towards the end of the year. From an international perspective, that (West Asia crisis and Pakistani airspace closure) is not a question right now. But times are uncertain, so it’s difficult to say what will be the situation by the end of the year.

Is it just the India-based international carriers or overseas carriers also that may start operations as per the timeline that you just gave? Which overseas geographies could see flights from and to the NIA initially?

Schnellmann: We have very specific interest from foreign carriers also. We do see international traffic developing initially in West Asia and Southeast Asia, these are regions for which we are seeing a lot of interest… but ultimately it’s up to the airlines.

The West Asia crisis has made some of it a little bit less predictable, but the interest is there from Indian as well as international airlines. I’m confident that the people in our catchment want direct flights to international destinations.

The issue of high airport tariffs at NIA has been flagged by a few airlines as well as others, who say that the cost benefit to airlines and passengers that the new airport could offer vis-a-vis Delhi airport has been negated.

Samra: We had asked for slightly higher tariffs than what AERA (Airports Economic Regulatory Authority of India) has given. Even what we had sought was broadly in line with the other greenfield airports and even a few brownfield airports in India. Considering the whole infrastructure is new, significant capex has been invested. From an airline’s perspective, we know that cost is a consideration. We think we would certainly be operationally cost competitive for an airline. Cost is a mix of various elements like the airport charges, fuel cost, and the operational efficiencies that airport offers, among others. High operational efficiency, like shorter turnarounds between flights, saves costs for airlines, and we think we will be very cost competitive for carriers.

Although it has expressway connectivity, NIA currently lacks multi-modal connectivity, unlike the Delhi airport. How big a concern is it presently, and what does the future look like?

Schnellmann: I’m convinced that the airport is very well connected to its catchment through the Yamuna Expressway. We’ve been working very deliberately to ensure there’s a quick and easy way to reach the airport for every price point, be it buses or coaches, taxis, and even something more luxurious, all that will be available. That really will be the primary access to the airport for a number of years, which is on par with with many other airports. By and large, the vast majority of travellers reach airports by road.

Having said that, I’m excited by the plans that the state government is working on with the central government to develop rail connectivity — RRTS connectivity is planned and high-speed rail connectivity has been mooted along the planned Delhi-Varanasi line. We’re working on plans for both of these railways to have stops directly in front of the terminal. We expect this multimodal connectivity will become increasingly important in the long-term.

Are you positioning the NIA as a second airport for the NCR or is this more about creating a proposition specifically for an exclusive catchment area vis-a-vis the Delhi airport?

Samra: It’s not an either-or, whether Delhi or Noida. There is good growth in the market, which definitely needs additional capacity. We will cater to that growth. What we bring on the table is additional capacity — in terms of passenger numbers and convenience, airline traffic, aircraft parking stands, etc. With Noida airport coming in, the passengers of different catchments, be it western UP or parts of Delhi-NCR, will have options depending upon where they stay, what time of the day they plan to travel, etc.

Unlike Mumbai, where the airport is completely saturated which automatically helps the Navi Mumbai airport in gaining traffic, the Delhi airport is still a few years away from reaching full capacity. Does that make NIA a bit of a slow starter as compared to Navi Mumbai airport?

Schnellmann: Fundamentally, we look at the growth story that is Indian aviation and we remain incredibly confident and convinced that there’s a need for additional airport or airports in the NCR. How this develops now over the next few months and years, time will tell. But we’re keen to convince passengers that we can offer a smooth, quick, easy, and seamless experience.

In terms of transfer traffic potential between NIA and IGIA, do you feel that there is potential, or is it going to be more of an independent operation?

Schnellmann: I expect both airports to have and to further develop an independent route network more or less. We’ll of course see individual travellers electing to fly to one and then transferring to the other. But I think that’ll be the exception rather than the rule.

How are your cargo operations expected to shape up because that is one of the big pulls of the NIA as compared to the Delhi airport?

Samra: We’ll be starting with our cargo operations also on June 15. And just like passenger operations, we are also positive and confident about the cargo development at this airport. Given our catchment, there’s significant potential and we will see that development happening gradually.