India's airlines spend big but airports lacking

New Delhi: An upstart Indian carrier's $15 billion order with Airbus is a bold bet on travel demand in the fast-growing country. But ageing airports and over-ambition could yet clip the industry's wings.
IndiGo, which was launched in 2005, on Wednesday stormed onto the international stage by announcing a deal for 180 new aircraft, the largest number of Airbus planes ever bought in a single order.
"We are putting our money where our mouth is," IndiGo president Aditya Ghosh boasted after sealing the deal at Airbus headquarters in Toulouse, southwest France.
"If the country has to grow by 9-10 percent, the airline business has to be an equal partner," he told the Mint daily newspaper. "There will be one or two years of up and down, but overall there will be only one direction."
Yet as airlines modernise and expand, analysts warn the nation's airports lag behind, threatening to drag the soaring aviation business back to earth.
"It's not just about inducting new aircraft to meet the growing air traffic demand," Mahantesh Sabarad from Mumbai-based Fortune Equity Brokers told AFP. "It's about runway capacity, and airport capacity.
"If adequate attention is not given to build larger airports, IndiGo's plans may well be grounded."
New Delhi opened a 2.7-billion-dollar terminal in July last year, but Mumbai has been unable to relieve chronic congestion at its only airport, which is hemmed in by slums on three sides.
Environmental concerns, difficulties in relocating local people, corruption, the slow legal system and weak land acquisition legislation have meant proposals to build a second airport have been fought over for 10 years.
In November, the backers finally got the right to build a new airport among mangrove trees on a plot southeast of the city of 18 million people.
The International Air Transport Association (IATA), an industry lobby group, points to Mumbai as an example of the under-investment in infrastructure which has restricted traffic.
"Investments in the development of airport infrastructure have only been very recent," spokesman Albert Tjoeng told AFP.
14/01/11 Adam Plowright/Dow Jones/AFP

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Categories: Airports Jan 2011, Indian Aviation- In General Jan 2011