Wednesday, May 16, 2018

Runaway growth, not enough runways

First, the good news for India’s aviation industry: passenger volumes have almost doubled in four years and are growing at the fastest pace in the world. The bad news? India’s airport infrastructure is jammed to capacity and struggling to keep pace with the rush of passengers and planes.

One passenger on a recent 60-minute flight from Amritsar to Delhi found that even at 11 p.m., the plane had to circle overhead for an extra 30 minutes before getting landing clearance. Such stories now are becoming commonplace because the Delhi and Mumbai skies are congested from early morning to late night. And the situation’s about to get worse.

India's top airlines have placed orders for over 1,000 planes in the coming decade. Many will arrive this fiscal year. Satyan Nayar, Secretary General of the Association of Private Operators (APAO), says he expects Indian carriers to induct 125 planes in fiscal 2019 “to capitalise on strong domestic air passenger growth,” adding to the 500 planes already plying the skies for scheduled airlines.
Of course, the aviation boom could stall if oil prices climb to $100 a barrel or more on Midlle-East tensions. For now, the market’s holding up even as fares increase. SpiceJet just reported quarterly passenger loads of over 90 per cent and strong yields but Chairman Ajay Singh conceded he didn’t know if fuel costs will be “passable to passengers” if oil hits $100. Aviation experts, though, predict passenger growth will continue despite rising oil prices because of intense competition between the airlines.

While good for carriers, all this passenger growth is creating huge problems on the ground. CAPA (the Centre for Asia Pacific Aviation) predicts the airport system will “exceed its maximum structural capacity by FY2022” and says if new projects are delayed “this level could be breached earlier”.

The most intense pressure is being felt at the two key airports Mumbai and Delhi. Already Mumbai-Delhi is the world’s third-busiest domestic route with 47,462 flights operated between the two cities in 2017, just behind South Korea’s Seoul Gimpo-Jeju airports and Australia’s Melbourne-Sydney route. Incidentally, Mumbai and Delhi account for 37 per cent of India’s air traffic.
16/05/18 Paran Balakrishnan/Business Line
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