Chaos and congestion at Delhi’s T3: As a country, we are behind the curve on airport infrastructure

The Indian aviation growth story has been a strong and long one. Passenger traffic had grown at over 12 per cent per year during the decade before the pandemic hit and at 16 per cent over the last five years of the decade. Rising GDP and per capita incomes, a young aspirational population and supportive government policy contributed to strong passenger growth. Given the poor air travel penetration, the story can only get better. The government has been a strong supporter of democratising air travel through various policy initiatives like the Udaan scheme, under which airports are being opened in small towns. The industry has depth in terms of airlines that compete against each other to ensure a reasonable cost of travel. Initiatives to reduce VAT have also helped to bring down the cost of travel. Given the promising future, airlines have placed orders that increase the current fleet strength, excluding the recently-reported order of 500 aircraft by Tata-run Air India. The story seems to be getting better and better.

This strong growth story needs to be supplemented with adequate and timely airport infrastructure. The airport privatisation story has given a fillip to the development of airport infrastructure. The four metros have world-class airport infrastructure. AAI airports over the past few years have become world-class too. Privatisation of other greenfield airports like Goa has led to the creation of new infrastructure. Goa’s Mopa airport has been built on time, though it can be argued that the state government could have planned it three to four years earlier. There has been the privatisation of other greenfield airports like Bhogapuram and Jewar, but these projects will take time to see the light of day.

The brownfield private airports, which manage almost 70 per cent of the country’s capacity and play a pivotal role in the growth story, need to constantly add capacity to accommodate growth in passenger traffic and new aircraft. This is more critical in metro airports because they play a critical role in network planning for transfer traffic, whether international to domestic and vice versa or domestic to domestic. We are not even considering international to international as Indian airports are a long way from becoming international hubs.

Welcome to departure area of terminal 3.
Four queues 200 plus each for security check-in. Chaos is regularised! @Delhiairport pic.twitter.com/3O4BT0LR74

— Sheela Bhatt शीला भट्ट (@sheela2010) December 13, 2022

As a country, we are behind the growth curve in airport infrastructure. Concerning greenfield airports, there are some good examples, such as the Jewar airport, where state governments have taken early steps to acquire land and conclude privatisation. Jewar will probably be the first airport in India which will be operationalised before the capping of the capacity of the existing Delhi airport. A negative example is that of Navi Mumbai which was privatised in 2017 but whose execution has been floundering for various reasons. Chennai is another bad example: AAI has been expanding the existing Chennai airport but given its constraints, there is a critical need for a second airport. The development of the second airport has been delayed by the state government and will not see the light of day for another five to six years, assuming things move along. A tender for preparing the feasibility report has been recently floated.

There have been delays in most private brownfield airports expanding their capacities. Some of it has been due to Covid-19 as construction was impacted. However, traffic post-Covid has rebounded at a fast pace and this may not have been anticipated by private operators. If one assesses the mandatory performance standards under the concession documents, it will not present a pleasant report card. For private airports, a better monitoring mechanism for capacity expansions and achieving concession performance standards would be desirable by the government.

There are other areas that brownfield airports need to look at. For example, how an airline’s capacity can be de-peaked. This may not be a simple issue because most airlines plan their networks around transfer traffic and in India, no airport having multiple terminals has “people movers” to facilitate efficient transfer traffic movement. This is a significant lacuna and not only affects network planning but is also an impediment to hub development. Private airports have hesitated to implement people movers due to high costs. And the fact is that any capex brings in more aeronautical revenues under the Airports Economic Regulatory Authority (AERA) tariff formula but the revenue share payments cut the revenues significantly thus making any capex spend unremunerative. It is important to realise that even if people movers are not mandated explicitly by concession documents, this will impact performance standards, opening up risks of concession compliance.

Another factor is the over-emphasis on commercial revenues, which eat away operational terminal space, leaving inadequate space for operational activities. Many times services like security from CISF and immigration need to be beefed up. While this is also the responsibility of private operators, a facilitative push by the government to ensure adequate availability is critical. The use of technology is another critical area to facilitate faster processing. The DigiYatra process is a great initiative. However, more such initiatives are needed. Faster security processing needs more sophisticated and modern equipment.

To conclude, the thrust on privatisation of airports has helped in creating significant airport capacity. New airports, especially second airports in cities, need to be planned well in advance because of land acquisition issues. AAI and private airports also need to expand capacities, improve processes, and manage traffic better. The monitoring mechanism in concession documents needs to be acted upon by the government to ensure private airports deliver promptly.

The Indian aviation story is critically dependent on the timely building of airport infrastructure. And given the complexity of this business, multiple steps are needed to ensure the Indian aviation story is not derailed.

The writer is a senior advisor in the aviation sector. Views are personal