0 оценок0% нашли этот документ полезным (0 голосов)
167 просмотров46 страниц
This sector report aims at the following objectives: Articulate the sector goals for airports, examine the air infrastructure in the state through a broad demand supply assessment. Explore opportunities in non passenger aviation segments such as maintenance, Repair and Overhaul of aircrafts, air cargo, regional hub of airlines. Ensure availability of quality airport infrastructure and air connectivity to passengers in the state. Trigger development through the high visibility Ahmedabad Greenfield international airport project. Encourage manpower development and skill building in aviation sector by encouraging flight schools and aviation a
This sector report aims at the following objectives: Articulate the sector goals for airports, examine the air infrastructure in the state through a broad demand supply assessment. Explore opportunities in non passenger aviation segments such as maintenance, Repair and Overhaul of aircrafts, air cargo, regional hub of airlines. Ensure availability of quality airport infrastructure and air connectivity to passengers in the state. Trigger development through the high visibility Ahmedabad Greenfield international airport project. Encourage manpower development and skill building in aviation sector by encouraging flight schools and aviation a
This sector report aims at the following objectives: Articulate the sector goals for airports, examine the air infrastructure in the state through a broad demand supply assessment. Explore opportunities in non passenger aviation segments such as maintenance, Repair and Overhaul of aircrafts, air cargo, regional hub of airlines. Ensure availability of quality airport infrastructure and air connectivity to passengers in the state. Trigger development through the high visibility Ahmedabad Greenfield international airport project. Encourage manpower development and skill building in aviation sector by encouraging flight schools and aviation a
December, 2008 Chapter 8 - Airports 60(8f8l llf88lf00l0f0 0090l0M0l 808f0 I6l08l Draft Final Report -8-2- CH 8 Airport Sector 8 AIRPORTS Gujarat possesses one of the largest networks of airports and airfields in the country. It has 17 airports, including one international airport, under the operational jurisdiction of Airports Authority of India (AAI). All except three airports are operational and most run scheduled fights, through there are cyclical variations. Apart from AAI airports, there are three airstrips under State Government jurisdiction located at Mehsana, Amreli, and Mandvi. There has been a high growth in air traffic in Gujarat, primarily arising from a low fare regime by Low Cost Airlines (LCA) supported by an economic boom. While this high growth may not sustain over a longer period, there is a need to examine and plan airport infrastructure in the State for long term growth scenarios, including addressing the requirement of greenfield airports at some locations. In addition, the state needs to explore opportunities in non-passenger segment viz. Maintenance, Repair and Overhaul (MRO) of aircrafts, air-cargo, creation of a regional hub for airline operations, aviation training and back office activities. This sector report on airports aims at the following objectives: Articulate the sector goals for airports, Examine the air infrastructure in Gujarat through a broad demand supply assessment using secondary data and focused stakeholder interactions with AAI, airport and airline staff. Assess the viability of projects for non-passenger segments Develop a project shelf for addressing the sector level gaps 8.1 Airport sector goals The goals for Airport sector are articulated as under: Ensure availability of quality airport infrastructure and air connectivity to passengers in the State. Trigger development through the high visibility Ahmedabad Greenfield international airport project. Explore opportunities in non passenger aviation segments such as maintenance, repair and overhaul of aircrafts, air cargo, regional hub of airlines, air taxi services etc. Encourage manpower development and skill building in aviation sector by encouraging flight schools and aviation academies at not-in-use air fields. Draft Final Report -8-3- CH 8 Airport Sector 8.2 Review of earlier planning documents Airport sector was not included in the Vision 2010 document, though it was covered in the BIG 2020. The BIG 2020 report mainly deliberated on the opportunities from passenger operations. The BIG 2020 document prepared in 2005 focused on increasing domestic and international passenger traffic, direct international connectivity to countries like US, UK , Canada, South east Asia and Europe, becoming the preferred gateways for visiting NRG (Non Resident Gujarati) and promoting regional air services through low cost airlines/ airports. BIG 2020 proposed a project shelf of Rs. 1503 crore for the aviation sector. The projects mainly related to upgradation the key airports viz Ahmedabad, Vadodara, Rajkot, Surat and Ankleshwar. As can be seen in Exhibit 8-1, 80% of proposed investment comprised of the International airport project at Ahmedabad. Most of the other investment was directed towards improvement of air side infrastructure at existing airports of key Gujarat cities. Private investment (Rs 1216 crores) and Airports Authority of India (Rs 314 crore) were considered the major source of funds for the above projects. Some of the projects suggested, such as modernisation of the existing Ahmedabad airport have been taken up. The upgradation project for Rajkot and Vadodara airports is part of AAIs plan for modernisation of 35 non metro airports. These projects have yet to be taken up and hence are carried forward into the project shelf for this study to the extent of details available. The Greenfield airport projects for Ahmedabad and Ankleshwar have yet to take off and their need was revisited in this report. The study suggested the following to help to realize the Vision for the air sector. Instituting Gujarat Aviation Steering Committee. Special incentives for creating regional air service hub. Lower Sales Tax on Aviation Fuel Draft Final Report -8-4- CH 8 Airport Sector Exhibit 8-1: Projects Shelf in BIG-2020 document prepared in 2005 Investment :47.82 cr and 1205.75 cr respectively in phase 1 and phase 2. Facilities : New International airport , domestic terminal, car parking, taxi track , new control tower. Investment: 14 cr and 70 cr respectively in phase 2005 and 2015. Facilities : Parking bay, Maintenance hub, expansion of passenger terminal, Airfield pavment , Shoulders for runway Investment: 35 cr and 80 cr in 2005 and 2015 respectively. Facilities :Shoulders for runway, taxi, apron&turning pad, new terminal, approach road and car parking, fire station, blast pad, high intensity runway. Investment 47 cr in 2010. Facilities: Extension of runway, car parking capacity enhancement, New fire station and terminal, airfield pavment, extension of runway and safety works, expansion of terminal. Investment 15 cr in 2015. Facilities: Domestic terminal and airfield pavment. Ankleshwar Investment 16 cr in 2005. Facilities : Runway, taxi track, apron, ATC, Fire station, Boundry wall and ambulance. Investment :47.82 cr and 1205.75 cr respectively in phase 1 and phase 2. Facilities : New International airport , domestic terminal, car parking, taxi track , new control tower. Investment: 14 cr and 70 cr respectively in phase 2005 and 2015. Facilities : Parking bay, Maintenance hub, expansion of passenger terminal, Airfield pavment , Shoulders for runway Investment: 35 cr and 80 cr in 2005 and 2015 respectively. Facilities :Shoulders for runway, taxi, apron&turning pad, new terminal, approach road and car parking, fire station, blast pad, high intensity runway. Investment 47 cr in 2010. Facilities: Extension of runway, car parking capacity enhancement, New fire station and terminal, airfield pavment, extension of runway and safety works, expansion of terminal. Investment 15 cr in 2015. Facilities: Domestic terminal and airfield pavment. Ankleshwar Investment 16 cr in 2005. Facilities : Runway, taxi track, apron, ATC, Fire station, Boundry wall and ambulance.
Source: Vision 2020 document The above review of the previous BIG 2020 document points to the need to update the document with respect to the many developments that have happened in the sector post 2005. We therefore begin by understanding the key developments in the sector. 8.3 Key airport sector trends Over the past 10 years, the Indian aviation has moved from a closed, poorly managed and over-regulated industry to a more open, liberalised, and investor friendly sector. Liberalization of the sector and entry of low cost carriers have been the main drivers for the growth. The sector has also witnessed growth in terms of increased airport infrastructure and increased numbers of operating airlines. The key sector trends are as captured as under: Earlier all airports were in AAI control, which carried out improvements by subcontracting to EPC contractors. However, over last five years, airport infrastructure has attracted private investment through the PPP route at four international airports, viz. Delhi, Mumbai, Bangalore Greenfield and Hyderabad Greenfield airports. Draft Final Report -8-5- CH 8 Airport Sector The Government has increased the FDI limit to 100% in Greenfield airports and airlines. Larger private sector role in airport infrastructure and management has led the Government to introduce an Airport Economic Regulatory Authority Bill to regulate private airport and airline operators market. The Authority will have functions relating to tariff determination, amount of development fees in respect of major airports, amount of passenger service fee, and monitoring of performance standards relating to quality, continuity and reliability of service. The number of airlines including low cost carriers has increased. This led to subsequent increase in competition and fare reduction which further fuelled the air traffic growth. The sector has witnessed accelerated fleet acquisition activities and present fleet size of all domestic airlines has exceeded 300 aircrafts. However, present downturn may slowdown fleet expansion plans. Up gradation and modernization of airports and as well as the rising fleet size have raised need for support services such as setting up of MRO facilities and boosting cargo operations by setting up air cargo facilities. Significant planned expansion of Indias fleet have led to several global players such as Airbus, Boeing, SIA Engineering, ST Aerospace and Lufthansa Technik tying up to establish MRO facilities in India. Large investments are expected in MRO (Maintenance Repairs and Overhauls) segment in India. Liberalizing bilateral traffic rights with several countries has taken total seats entitlement up by 123% between 2003 and 2006. This led to 17.8% growth of international traffic in 2007-08 from last fiscal. Higher fuel costs, structure of high taxes and higher user charges are leading to huge margin pressures on airlines, initiating a trend of consolidation through mergers and acquisitions of airlines. The nationwide passenger demand growth was strongly exhibited at Gujarat too. Historically, Gujarat airports exhibited a growth rate of 1.2% in passenger traffic during the five year period from 1997-98 to 2002-03, lower than the all India average of 5% during the same period. After 200203, passenger traffic witnessed 26% compounded annual growth rates which was 5% higher than the national average. This turnaround was primarily observed at Ahmedabad airport and was driven by low cost carriers, higher price elasticity, increased disposable incomes and overall buoyancy of the economy. Demand for backup and supporting industries like Maintenance Repair and Overhaul, aviation hubs, aviation manpower etc has increased due to the growth in the aviation sector. Over the eleventh five year plan period, Rs. 40,880 crores of investment is envisaged in airport infrastructure. Modernization of metro airports comprise 40% of eleventh plan investment where as 35 non metro airports across the India will be upgraded at an investment of Rs 6,149 crores. This forms 15% of non metros investment. However 30% of eleventh plans investment is envisaged in development of several Greenfield airports across the India. Approximately 75% private sector investment is envisaged in this period indicating larger role for the private sector. Draft Final Report -8-6- CH 8 Airport Sector Growth in civil aviation is threatened by challenges such as declining volumes due to high fares, high operational costs, global economic slowdown, security and law and order issues and a traditional high cost loaded structure of the industry which is difficult to recover in a short time. These developments have put a huge strain on the airlines capacity to sustain volumes. The airlines are now responding through mergers, acquisitions, tie ups and cost cutting measures within leading airlines. However, downturn in oil prices, committed Government support, strong underlying fundamentals of the Indian economy may help the sector tide over the crisis. The present report tries to absorb the above developments. We begin with an analysis of the passenger opportunity in Gujarat. 8.4 Assessment of passenger led opportunities In order to analyse the potential for development of passenger air services in Gujarat, we follow the methodology of forecasting demand and supply for key growth airports and recommending ways to plug the gaps, if any. 8.4.1 Identifying Key Growth Airports The historic trend for Gujarat shows that upto 2002-03, passenger growth in Gujarats airports witnessed a compounded growth of only 1.2% in the preceding five years, as against a historical growth rate of 4- 5% for all India. However, the past five years have led to a spurt in air travel demand. Gujarat airports registered a CAGR of 26% as against 20% nationally riding on availability of low cost airlines and economic buoyancy. Increased frequency arising from multiplicity of airlines and better regional and international connectivity options also contributed to this growth. The domestic traffic trends of Gujarat airports reveal that Ahmedabad is the fastest growing airport with 73% of share of Gujarats air traffic during 2007-08. Most other airports fall in the low volume low growth category. The following Exhibit 8-2 provides a snapshot of passenger traffic at Gujarat Airports over the last five years. Exhibit 8-2: Passenger traffic at Gujarat airports Airports 2003-04 2004-05 2005-06 2006-07 2007-08 Ahmedabad 7.24 9.17 14.39 20.92 24.62 Vadodara 3.12 3.62 3.60 4.04 5.02 Rajkot 1.27 1.58 1.40 1.61 1.54 Bhuj 0.61 0.65 0.78 0.85 0.92 Bhavnagar 0.53 0.64 0.53 0.65 0.69 Draft Final Report -8-7- CH 8 Airport Sector Airports 2003-04 2004-05 2005-06 2006-07 2007-08 Jamnagar 0.45 0.59 0.70 0.84 0.96 Total 13.22 16.25 21.4 28.91 33.75 Source: AAI (Nos in lakhs) Vadodara and Jamnagar airports have been growing at over 15% over last five years. Vadodara is the second largest airport of Gujarat with 12% market share in 2007-08. Jamnagar airport constitutes only 3% of the share but has been growing at 21%. Rajkot airport has seen a decreasing trend in market share since 2004 but has been growing at 5%. These airports cumulatively represented 92% of states share in 2007-08. The airports have been categorized into four different classes and placed in a matrix of market share versus growth. Airports holding a market share higher than 20% in 2007-08, and for which the traffic growth over the last five years was exceeding 20% were considered to be high growth high market share category airports. This approach has been adopted since national traffic has been growing at 20% pa too during the same period. The other classes had lower cut offs. Exhibit 8-3: Categorization of Gujarat's airports based on passenger growth and market share
Source: CRISIL analysis The categorisation shows that only Ahmedabad falls in the high growth high market share category. The other two promising airports are Vadodara and Jamnagar, which exhibit low market share but high growth. Thus the key growth airports in Gujarat can be said to be Ahmedabad, Vadodara and Jamnagar. We can add Rajkot, Bhuj and Bhavnagar to the list of key airports based on absolute traffic numbers, through they are growing at a slower pace. Vadodara Jamnagar Rajkot Bhuj Bhavanagar Surat Kandla/Gandhidham porbandar Ahmedabad Low High Growth High Low Market share Vadodara Jamnagar Rajkot Bhuj Bhavanagar Surat Kandla/Gandhidham porbandar Ahmedabad Low High Growth High Low Market share Draft Final Report -8-8- CH 8 Airport Sector 8.4.2 Domestic Passenger Traffic Demand Analysis For the purpose of forecasting demand, methods identified by International Civil Aviation Organization (ICAO) were used to the extent possible. ICAO provides three basic methods of forecasting, namely Trend Projections (based on historical growth), Econometric Relationship Modelling (based on correlation with GDP of the catchments area) and Market and Industry Survey (based on the industry and market survey). In absence of reliable long term historical economic data for catchments area of different airports, a combination of trend and market/industry survey methods has been adopted for demand projections. By analyzing the past trends and through inputs from market analysis, informed judgment for the growth rate of each airport has been formed. The final growth rates adopted are given in Exhibit 8-4 below. The rationale for adopting these growth rates is described in detail in Annexure I to this Report. Different growth rates have been adopted for two the period 2007-15 and 2016-20 since high growth is expected to slow down in the longer run as the economic growth itself will taper. Exhibit 8-4: Growth rates adopted for domestic passenger demand forecast
Source: CRISIL analysis Ahmedabad has exhibited domestic traffic growth of 36% CAGR during last five years. However impeding challenges in the aviation sector may slow this growth and hence a conservative 24% growth in the traffic of Ahmedabad airport has been adopted. Vadodara and Jamnagar for the second category of growth airports at the middle level. For other airports relatively slower growth rates have been adopted, mainly based on past trends. Based on the above, on an unconstrained capacity basis, the traffic forecast for domestic passengers for Gujarat airports is as under. Exhibit 8-5: Domestic passenger traffic projection for Gujarat airports (lakh passengers) Airport Year 2007-08 2009-10 2011-12 2016-17 2019-20 Ahmedabad 24.6 37.9 58.2 139.2 195.6 Airport Period 2007-15 2016-20 Ahmedabad 24% 12% Vadodara 14% 7% Rajkot 7.5% 4% Bhuj 9% 5% Bhavnagar 7% 4% Jamnagar 12% 6% Draft Final Report -8-9- CH 8 Airport Sector Airport Year Vadodara 5.0 6.5 8.5 14.4 17.6 Jamnagar 1.0 1.2 1.5 2.4 2.9 Rajkot 1.5 1.8 2.1 2.8 3.1 Bhuj 0.9 1.1 1.3 1.8 2.1 Bhavanagar 0.7 0.8 0.9 1.2 1.3 Total 33.7 49.3 72.5 161.8 222.6 Source: CRISIL Analysis (Base Data:AAI) (2007 are actual numbers) The above forecast shows that the Ahmedabad will continue to have the major share of the air traffic on the State given its higher growth rate. Vadodara will be a distant second. The balance key airports will continue to have low traffic numbers and low overall market share. Following exhibit compares projections made in earlier reports with the revised projections. Exhibit 8-6: Air traffic projection for Gujarat airports: Comparison with previous studies (Lakh passengers) 2009-10 2011-12 2014-15 2019-20 Aviation master plan projection 17.56 20.53 22.11 BIG 2020 21.92 31.57 BIG 2020 Revised projections (This report) 49.3
72.5
131.02
222.5
Source: AAI, BIG-2020, Aviation Master Plan and Revised CRISIL projections The above comparison indicates that earlier projections were conservative compared to the present study. For instance, earlier BIG 2020 and Gujarat Aviation Master Plan estimated air traffic to reach 31.6 and 22.1 lakh passengers in 2015 respectively. These numbers were achieved in 2005 and 2007 respectively. The earlier studies had not anticipated the boom in the low cost airlines segment and hence considerable expansion of the aviation market was not foreseen. The present projections are much higher, in spite of adopting lower growth rates than the historical trends. It is felt that these projections adequately reflect the large industrial and infrastructure growth that is expected in Gujarat. 8.4.3 International Passenger Traffic Demand Analysis International passenger traffic at Ahmedabad has grown at a CAGR of 29% in the last five years from 2002-03 to 2007-08. There was a drop in growth in 2006-07 but the recovery has been robust in 2007-08 Draft Final Report -8-10- CH 8 Airport Sector with increased direct flights. However, the current year (2008-09) may see a slump. However, given the huge investments planned, introduction of many new international flights, easing of oil prices and the new international terminal with apron will that will become available in 2009, (permitting simultaneous operation of five international flights) long term growth momentum is unlikely to be lost. Considering these, a conservative, lower than historical growth rate of 25% has been adopted for the period of 2007- 15 1 while 15% has been adopted for period beyond 2015. The projections are as under. Exhibit 8-7: International passenger traffic projection for Ahmedabad airport (Lakh Passengers) Airport Period 2007-08 2009-10 2011-12 2016-17 2019-20 Ahmedabad 7.02 10.96 17.13 44.25 67.30 Source: CRISIL analysis The Aviation Master Plan 2004 of the state used a 28% growth rate on 2002-03 traffic base for projections of international passengers. It had forecast 1.12 lakh (2007) and 1.5 lakh (2012) respectively. Similarly another study forecast traffic of 3.2 lakh (2007) and 5.4 lakh (2012) respectively. In actual, the traffic was 7 lakh passengers in 2007 itself. The reasons for such wide differences are in the low traffic base of 2002, increase in number of direct international flights from Ahmedabad and their diversion from Mumbai, and robust economic growth of the country and state. However, more recently the rise in crude oil prices led to increase in aviation fuel costs that comprise about 50% of the total operations cost of airlines. Further, taxes have been increased. These factors have led to an increase in cost of air travel. Thus the sustainability of the growth trends in Gujarat depends on the international crude oil price situation and domestic inflation. 8.4.4 Connectivity analysis for Gujarat Airports An important point made in the previous BIG 2020 report was about regional air connectivity. Since 16 30% of the traffic to Gujarat airports (other than Ahmedabad) is from non Mumbai / Delhi routes, it was seen as an opportunity for connecting different cities of India with Gujarat cities with a low-cost regional airline in the State. Increased connectivity has fructified to an extent due to the low cost model. This has contributed to an increase in passengers at Gujarat airports. 8.4.4.1 International connectivity Ahmedabad has direct flights to Dubai, Doha, Singapore, London, Kuwait, and New York/New Jersey. However Ahmedabad does not have direct international flights to many US, Euopean, South East Asian and African destinations where considerable Gujarati citizens reside. Many airlines have stopped operating direct flights as economics favour operations via Mumbai.
1 The Planning Commission has used a 20% growth rate for forecasting national air traffic for the 11 th Plan. Draft Final Report -8-11- CH 8 Airport Sector Given the spread of the NRG community, and its ambitions for global connectivity, the State lacks direct connectivity to some key destinations such as Paris, Brussels, Frankfurt, Chicago, Washington, Boston, LA or San Francisco, Abu-dhabi, Sharjah, Oman, Johannesburg, East Africa, and Uganda. However proximity to Mumbai and low volumes has been seeing many airlines opening and closing many direct routes. For instance a Jet airway has now stopped operating its direct London flight which was operated daily. The only daily direct flights are to Singapore (Singapore Airlines), Newark (Air India), and Kuwait (Kuwait Airlines). 8.4.4.2 Regional connectivity Presently regional connectivity of Ahmedabad airport is established with many metros and non metros cities of Gujarat. There is however limited interstate connectivity. Other airports of Gujarat are also connected with metro cities other than the Gujarat as follows: Exhibit 8-8: Regional connectivity at Gujarat airports Airport Connectivity to metros & non metros Intra state connectivity Major airlines operating Ahmedabad
Delhi, Mumbai, Pune, Kolkata, Chennai, Hyderabad, Bangalore, Bhopal, Guwahati, Bhubaneshwar, Coimbatore, Jaipur, Vadodara, Raipur, Goa Vadodara, Kandla Indian, Jet, Jetlite, Kingfisher, Spicejet, Go Air, Indigo, Deccan, Air India Vadodara Delhi, Mumbai, Bangalore, Chennai Ahmedabad Indian, Jet, Indigo, Deccan Rajkot Mumbai None Jet Surat Delhi None Indian Bhavnagar Mumbai, Delhi None Jet, Deccan, Kingfisher Bhuj Mumbai None Jet, Kingfisher Kandla Ahmedabad, Mumbai, Delhi Ahmedabad Deccan, Kingfisher Porbandar Mumbai None Indian Source: CRISIL analysis and various sources. Flights schedules change often and the above situation reflects the connectivity at the time of the report. It can be observed that there are only three regional locations where intrastate connectivity exists. Only Ahmedabad has direct flights with Kandla and Vadodara. However all the other airports are connected via Mumbai or Delhi. This is due to the presence of other mode of intrastate transport and well developed road network in the state. Further, only Ahmedabad and Vadodara airports have presence of Low Cost Carriers which has made an impact on air passenger traffic. Surat and Porbandar airports have been recently upgraded and are connected to Delhi / Mumbai respectively. Thus the connectivity pattern at Gujarat airport reflects high demand for connectivity to Metros like Mumbai and Delhi, as also to important international destinations. However, barring Ahmedabad, demand for other national non metro locations seems to be at non-viable levels. This is not desirable Draft Final Report -8-12- CH 8 Airport Sector economically. Solutions would lie in the space of making lower loads economically viable using a combination of lower taxes and smaller aircrafts. These solutions are discussed later. 8.4.5 Supply of Airport Infrastructure in Gujarat and Comparison with Demand Our earlier discussion has established a pattern and level of demand for each key airport. In this section we analyse the infrastructure at each airport of Gujarat to arrive at the supply for each airport and compare that with the demand upto 2020. Airport capacity is determined by taking into consideration the lowest capacity amongst (i) terminal capacity including approach and parking (number of passengers/cars), (ii) the passenger handling capacity, (iii) runway/taxiway capacity (number of takeoffs/landings possible per hour), and (iv) apron capacity (number of parking bays). Further, airports have substantial differences between peak and off peak requirements compared to other modes of transport and hence peak capacities are also relevant. 8.4.5.1 Ahmedabad Airport The Ahmedabad airport handles nearly three fourth of the air traffic of the state. The airport handled 2.4 million passengers in 2007-08 and is expected to handle 6 million passengers in 2010 and 9 million in 2012, including both domestic and international passengers. Presently the airport is under expansion on the terminal and apron side and hence the capacity would be enhanced by 2009. The new domestic terminal is already in operation and new international terminal and apron are under construction. The capacity at the Ahmedabad airport cannot be segregated between international and domestic passengers as they share a common runway and apron. The international side apron will be used for parking domestic flights during peak hours. The capacity of Ahmedabad airport post the 2009 expansion would be as follows: Exhibit 8-9: Capacity of Ahmedabad airport post 2009 expansion Parameter Capacity Runway 15 per hour Small aircraft apron area 4 bays ATR /medium sized aircraft apron area 3 bays Apron for Boeing 747/Airbus A320 10 bays Apron for Boeing 747 5-6 bays Domestic Terminal 1650 pax International Terminal 1000 pax Cargo Terminal 1 no. Hanger for small aircrafts/helicopter 2 Night parking facility (Aircrafts) 4-6 no. Source: AAI, Ahmedabad Draft Final Report -8-13- CH 8 Airport Sector Based on above expansion plan, total yearly traffic handling capacity of Ahmedabad airport was calculated for domestic and international traffic using assumptions on aircraft turnaround time. The analysis reveals that if the runway capacity remains the same, the airport will have annual handling capacity of around 53 lakh domestic passengers and around 23 lakh international passenger considering 24 hours of operations. This will imply around 300 takeoffs and landings nearing the design peak runway capacity of 350 landings/takeoffs in 24 hours. Given this analysis, it appears that the limit of domestic passengers would be reached by 2011-12 and that for international passengers would be reached by 2013-14. However considering full capacity utilisation during peak hours and slack utilisation during off peak hours, the capacity limitations could be reached a year earlier. The limitation primarily arises from runway capacity. Further expansion will be constrained due to the non availability of land in the vicinity of present airport. Thus Ahmedabad would require new airport capacity by 2011-13 periods, the exact threshold being reached depending on the demand. This can probably be met through a new international airport, with all its attendant benefits in terms of being a growth trigger for the region. 8.4.5.2 Vadodara Airport Vadodara is the second largest airport in Gujarat. The existing airport has facilities of handling A-320/100, B-737-200/400/400/800 and ATR and military aircrafts. Airport has four parking bays capable of handle B- 737s/A320s. Present passenger handling capacity of terminal is around 200 and car parking capacity of domestic terminal is 136. It does not have any cargo terminal. Isolation bay at airport and shoulders for runway do not exist. Based on apron handling capacity, the airport capacity has been calculated as 16 lakh passengers considering the 24 hours of operations. Further considering the 18 hours of operation, capacity comes to around 12 lakh. Airport would reach to this capacity in the 2018-19 and 2015-16 for 24 hours and 18 hours respectively 2 . These capacity constraints can be addressed through modernization of airport. This airport is included in 35 non metro airport development programme in phase 2. Proposed development work includes strengthening of runway and apron, development parking bay and terminal building to augment the peak hour passenger handling capacity and other requirements. This would resolve the capacity issues of airport. 8.4.5.3 Jamnagar Airport The Jamnagar airport is owned by the Indian Air Force, though the civilian terminal building is under the AAI. The runway is longer at 8250 ft. The airport is capable for operations of two B-320 types of aircrafts and peak hour passenger handling capacity is 150 both for arrival and departure. The airport is similar to
2 The passenger capacities of both Vadodara and Rajkot airports may differ from above projections considering the runway capacity. This was not considered as only apron capacity information is available at this stage. Draft Final Report -8-14- CH 8 Airport Sector Bhavnagar airport but is experiencing a spurt in demand. The terminal building needs to be expanded. If runway capacity is not a constraint, it can handle this increased demand beyond 2020. 8.4.5.4 Rajkot Airport Rajkot is leading city of Saurashtra. Present passenger handling capacity of airport terminal is 125 pax each for arrival and departure. Parking apron is of size 300 ft x 250 ft having capacity to handle two B-737 type aircraft at a time and Present airport is capable for operation of B-737 & ATR-72 types of air crafts. Based on apron capacity, the capacity for Rajkot airport has been calculated at 10 lakh passengers considering the 24 hours as peak hour of operations. Airport would reach this capacity beyond 2020. However, the length of runway at 5400 ft (1621 m) is slightly short of safety requirements to operate a regional commercial jet and short range aircraft (See Box : Runway Length). Efforts to increase its length are constrained due to land acquisition issues. (See attached satellite photo). The north-eastern end of the runway would cross into the path of the Rajkot Jamnagar Highway if expanded. The AAI has demanded 3000 to 4000 acres of land against the availability of only 1200 acres. Rajkot is the third airport in Gujarat to be included in the 35 non metro airport development programme of AAI, in phase 2. Proposed development work includes construction of new terminal building to augment peak hour passenger handling capacity, and expansion of runway. The other alternative is to shift the Airport to new location either on the Rajkot Jamnagar Highway or the Rajkot - Ahmedabad Highway. This would be welcome development as the airport is situated nearly in the centre of the town with developments all around it.
Draft Final Report -8-15- CH 8 Airport Sector
8.4.5.5 Bhavnagar Airport Bhavnagar airport serves ports and port based industries developed in its vicinity. Its peak hour passenger handling capacity is for 100 pax both for arrival and departure. Its parking apron is of size 350 ft x 250 ft having capacity to handle two B-737 type aircraft at a time. Its runway is 6300 ft. Present it is equipped with only a small terminal building. Based on apron capacity Bhavnagar can handle upto 7-10 lakh passengers which are adequate for the period upto 2020. 8.4.5.6 Kutchh Airports: Bhuj, Gandhidham and Mundra The Shyamji Krishna Verma Airport at Bhuj is located near the Rudra Mata Air Force base. There is a demand by the locals to give international airport status to Bhuj in order to cater to the large number of NRIs and NRGs hailing from Kutchh. The Gandhidham/Kandla airport was developed to serve port and port based industry around Kandla and Gandhidham. Gujarat Airways operated scheduled flights till October 1999. Flights have commenced to this airport recently. Present peak hour passenger handling of terminal is 50 pax both for arrival and Box: Runway Length How much is enough? Generally Design runway length depends on the following: Altitude of Runway Temperature/weather extremes Gradient Stage Length (Distance to be flown non-stop) Nature of Aircraft to be operated in terms of distance hauls 2000 m (6660 ft.) will accommodate regional jets and short range flights in the range of 2000 km 2300 m (7660 ft) will allow medium range flights (3000 km) 2700 m (8990 ft) will allow all medium range aircrafts (4500 km) 3200 m (10656 ft) will accommodate longer range flights 3500 4000 m will virtually accommodate any aircrafts other than in extremely high temperatures. Draft Final Report -8-16- CH 8 Airport Sector departure. The runway is long at 8250 ft. It is equipped with only a small terminal building. Lighting facility is inadequate. In addition, an airstrip has been constructed by Mundra Port and SEZ Ltd at Mundra which has been declared as a commercial airport by the Union Civil Aviation Ministry. 8.4.5.7 Porbandar, Surat and Kesod Airports The Porbandar airport has a newly constructed terminal building of current peak hour capacity of 100 pax for both arrival and departure. The airport is capable for operation of B-737 types of aircrafts. It has a car parking capacity is 50 cars at a time. Its parking apron is of size 300 ft x 200 ft having capacity to handle one B-737 type aircraft at a time. New terminal building and some infrastructure facilities have been recently developed. Hanger to cargo handling facilities is absent. Based apron capacity, the airport can handle 4-5 lakh passengers. The airport would reach to this capacity beyond 2020. Keshod is small town in Junagadh district. There are no scheduled flights operating to this airport. It has potential to be developed as full fledged airport owing to the tourism potential of Junagadh district. Its present peak hour passenger handling capacity is 25 pax both for arrival and departure. Its parking apron is of size 350 ft x 250 ft having capacity to handle two F-27 type smaller aircraft at a time. It handled 40 passengers in 2006-07. The airport has no demand and hence there is no urgent need for upgradation. The airport can be upgraded to handle smaller aircrafts regularly at relatively smaller cost. The Surat airport was constructed by the Government of Gujarat on a 312 hectare plot on Dumas road near Magdalla but its operations are handled by AAI. Its runway is 1400 meter long and capable of handling A-320 and B-737types of aircraft. It doesnt have a cargo complex. Almost all the above airports lack night landing facilities. AAI plans to develop them. 8.4.5.8 Other Airports and Airstrips In addition to the above airports, there are a number of unused airstrips at the following locations: Mehsana, Deesa (AAI), Amreli, Mandvi, Ankleswar, Morvi, Wankaner, Khambhalia (IAF), Limdi, Dhangadhra, and Radhanpur. Many of these air strips were developed by erstwhile princly states and are presently in state of neglect. The Mehsana and Ankleswar airports also have a terminal building. The following developmental possibilities exist with regard to these airports: There is strong demand by the local industries association to complete and operationalise the Ankleshwar airport. While the local industry is arguing that there is traffic for operation of a 50 seater aircraft, this demand will need to be analysed based on its proximity to Vadodara airport. Demand at Ankleshwar could reach viable levels in view of the large investments that are likely to flow at PCPIR Dahej. The GoG plans to lease the airport to the local industries association. Draft Final Report -8-17- CH 8 Airport Sector The tourism potential at Mandvi points to a small demand. If Mandvi is developed as a major Tourist destination as planned, the development of air strip aircraft would be a pre-requisite to large tourist flows. The State Government is already planning development in this direction by proposing its development on a PPP basis. However, despite tourism driven traffic, the airport may not be viable on a PPP basis until its development is bundled with the tourism infrastructure development in the town such as hotel development. Similar possibilities exist for greenfield airport development at Dwarka and Ambaji driven by tourism demand. Smaller airstrips lying unused/semi used at Mehsana, Deesa, Amreli and Mandvi can be reclaimed and leased out to Flying Clubs. Presently AAI charges high lease rents to flying clubs to operate from their airfields. These air strips could be revived by the private sector flying clubs if necessary. This could popularise the aviation related carriers. Besides the existing airstrips, there seems to be potential at greenfield locations for development of small airports for passenger operations in the long term. Also, there is some possibility of starting air taxi services during the Vision period. This two elements of the passenger led opportunity in the Gujarat aviation sector are discussed next. 8.4.6 Small Airports Development Opportunity Gujarat possesses one of the largest airport infrastructures in the country, where an excellent trunk road infrastructure makes access to the nearest airport relatively easy. Thus most parts of the state are well covered in terms of access to an airport. However, specific demand for small airports / airstrips development at emerging Centres of Growth such as ports, entertainment zones, Economic or industrial zones and regions etc may arise. The following table tries to capture some of the potential locations where new airports may emerge. It also captures emerging airport projects if they are in the planning stage. Exhibit 8-10: Emerging Small New Airports and Airport Opportunities - Location Driver Connectivity Requirements Present Status Ankleshwar Chemical Industry in Bharuch Ankleswar area/ PCPIR Delhi, Mumbai Semi finished airport in dormant stage. Civil Aviation Dept. GoG plans to lease the airfield to local industries association to complete balance work at a cost of Rs 20 crore approx. Mandvi Development of Mandvi as Tourism Destination including for cruises Mumbai, international locations Airstrip with 5000 ft runway in operational stage. No Terminal building. Upgradation would be required. Dwarka Tourism and pilgrimage destination. Development of Poshitra port near Dwarka Mumbai, Delhi International No plans as yet. Nearest airport is Porbandar, 150 km Requirement would depend on successful development of tourism in the area. Draft Final Report -8-18- CH 8 Airport Sector Location Driver Connectivity Requirements Present Status Mundra Mundra Port and SEZ Delhi, Mumbai, International locations Aerodrome with 1900 m airstrip already established by MPSEZ Ltd. Will expand if required. Ambaji Tourism and pilgrimage destination. Mumbai, Delhi, Ahmedabad
Civil Aviation Dept. plans to construct 7000 ft airstrip at a cost of Rs 10-15 crore under PPP format. While small airports may not be viable based on air side revenues alone, the following strategies could contribute in making them viable: Bundling real estate development with airports development on PPP basis. Many states are already building airports in Tier II and Tier III towns through this strategy where the developer is allowed to commercial development of the site in an integrated manner so as to recover his investment by selling/leasing commercial property. Operating small 40-50 seater aircrafts where the fuel costs per seat kilometre are less than half of a larger aircraft. This can reduce the operational cost, thus making air travel cheaper. However, this strategy can succeed only if there is a complimenting reduction in taxes on air travel by the Government and stabilisation in fuel prices. While this may not be immediately possible, such developments cannot be ruled out in longer run, say in the 2012-20 period. Mundra is the first private airport in Gujarat and was granted approval as a commercial airport along with two other similar airports, namely Tata Steel Ltds airport at Jamshedpur in Jharkhand and JSW Steel Ltds Vijaynagar airstrip in Karnataka. Air services did begin to Jamshedpur by Air Deccan through turbo-prop aircraft. This was possible because Tata guaranteed a number of seats on the aircraft. Air traffic controls at all such private airports is manned by the AAI. The airport operator is allowed to levy airport charges under an understanding with airlines. Larger airports like Hyderabad and Bangalore require levying large airport charges to recover the huge investment they incur. However, smaller airports can afford to levy relatively lower rates. 8.4.7 Air taxi operations opportunity Air taxi is an airline services provided on demand basis which was not scheduled. Small aircrafts known as VLJ (Very Light Jet) with seating capacity of 4 to 8 seats are used for transportation instead of common charter planes, mid size private jet or commercial air line services. Owing to its size and light weight, only 900 meter length of run way is required for it to take off, which is considerable lower than mid size/large size air crafts which need 2500 to 3500 meter run way. Further it requires small space for a hanger. Thus, infrastructure needs are not very high as in case of mid size or large size air crafts and can operate from the airstrip. Draft Final Report -8-19- CH 8 Airport Sector Air taxi services operate in select markets, between smaller airports near to larger airports and enables travellers to save time involved in procedures at large airports like delays and long layovers in the airport as one waits for a connecting flight. Air taxi includes following features. Focused outside hub airports Faster than scheduled air carriers for point-to-point travel Four to eight passengers on a plane High utilization of aircraft (via optimization of resources) Cheaper than a charter On-demand (with a day or two of notice); no fixed or published schedules Sold by the plane or by the seat Clear, all-in pricing, by distance, time or zone, with no extras (deadhead fees, wait time, fuel surcharges, pilot overnights, etc.) In India, air taxi is still a new concept and still evolving. There are many air charter service providers in India and some companies are planning to start air taxi services in India. However air charter services market is limited to business purpose. MNCs (Multi National Companies) and leading business houses of India are the major clients of air charter services. But these services are viable in selected metro cities city pairs only which promise enough traffic of business houses and MNCs that keep the air craft loaded with passengers. Client analysis of air taxi operators of India indicate MNCs and leading business houses are leading players using air taxi services and mainly used for business purposes only. Air taxi services providers adopt two distinct pricing structures based on use. This includes (i) pricing based on hourly rate for the entire aircraft and (ii) per seat pricing. Entire aircraft price is based on the hourly rate for the aircraft in which overnight waiting charges, repositioning and other charges are not included as the aircraft is allowed to go for another trip for another client. Such services may only be available between stations where there are sustainable traffic volumes enough traffic is available to keep the aircraft fully employed. Straight distance between any two important cities/industrial centres in Gujarat is not more then 500 kilometres. Against this, the new generation air crafts (VLJs) which are likely to be used in air taxi service have a cruising speed ranging between 650 kmph to 825 kmph. Thus travel time from one important destination to another will not be more then 1 hour. This would mean that the aircraft would be employed for lesser number of hours, making it unviable. Viable routes could instead be between Gujarat cities and non-metro destinations. As indicated in the section on connectivity, there is poor connectivity between major cities of Gujarat and other non-metro destinations of India. This is a result of non-economic loads at present. However, in future, with the development of the economy, economic loads for operation of air taxies by business customers may arise for connecting such destinations by air taxi. Routes on which Air taxi could operate is brought out in the following table: Draft Final Report -8-20- CH 8 Airport Sector Exhibit 8-11: Probable city pairs for air taxi services Sr. No Gujarat Cities Linking Cities 1 2 3 4 5 6 7 Ahmedabad Vadodara Rajkot Jamnagar Ankleshwar Surat Kutch Mumbai Delhi Hyderabad Bangalore Nagpur Indore Pune Goa Source: CRISIL Analysis Thus, while presently the viability of air taxi services is limited, future development of the state may create air taxi opportunities for cities/industrial centres of the state. 8.5 Assessment of non-passenger opportunities Besides passenger led opportunities, a number of other developmental possibilities lie in the aviation sector in Gujarat. Such developments could have a positive impact in terms of contribution to the economy, technology transfer and job creation. This section analyses these opportunities such as aircraft repair and maintenance facilities, and air cargo operations. 8.5.1 Maintenance Repair and Overhaul (MRO) segment opportunity This section assesses the opportunity in aircraft related services like MRO for Gujarat. It first observes the global MRO opportunity followed by the national scene before approaching Gujarat. 8.5.1.1 The Global MRO Industry Air transport MRO business in the world was estimated at $40.8 bn in 2006. The Asia-Pacific aircraft and engine MRO market totalled $ 8.71 billion in 2005 and is estimated to touch $12.90 billion in 2011. North America is the largest MRO market of the world, accounting for around 40% of the world market. Western and Eastern Europe drive 28% of spending. Asia Pacific, China and India combinedly represent 22% of the market share. However India alone represents only 1% market share of the global MRO business. The market share of each region in terms of MRO spend is brought out in the Draft Final Report -8-21- CH 8 Airport Sector Exhibit 8-12. Draft Final Report -8-22- CH 8 Airport Sector Exhibit 8-12: Region wise share of MRO market in 2006 India 1% Europe 26% N. America 39% E.Europe 2% Asia Pacific 17% China 4% Latin America 4% M.East 4% Af rica 3%
Source: Boeing 2006-07 survey In terms of the different kinds of MRO activities, engine overhaul is the largest segment of MRO spends and generates around a third of all demand. Line maintenance and component O&M are the next largest segments. This is brought out in the Exhibit below: Exhibit 8-13: World MRO market in 2006 Source: Boeing Inc The key trends in the global MRO business indicate higher value addition, integration of services and increasing specialisation. These trends are described below: The industry used to earlier operate as a captive maintenance provider earlier. However it is now gradually moving towards a total solution provider that includes a variety of maintenance and repair services. In fact airlines have started showing a preference for comprehensive solutions that include Engine Overhaul 35% Line maintenance 21% Component 21% Airframe Heavy 14% Modifications 9% Engine Overhaul 35% Line maintenance 21% Component 21% Airframe Heavy 14% Modifications 9% Draft Final Report -8-23- CH 8 Airport Sector scheduled heavy maintenance and engine checks over a fixed number of years, ranging between 2 and 10 years. The changing trend in MRO is captured in the following exhibit. Exhibit 8-14: Changing trends of MRO industry Source: CRISIL analysis The growing complexity of airframes, systems, engines, and related components is leading to increased inspection and maintenance time, leading to a higher demand for MROs. Besides Tighter Safety regulation by Civil Aviation Authorities (CAA) in most regions leading to a situation where regular upgrades of different aircraft components are becoming essential. MRO providers prefer long-term maintenance agreements for engine repairs, allowing organizations to offload activities that are not compatible with standard operations. Passenger growth and fleet size growth are important factors contributing to the MRO industry. The combined fleet of India and China are projected to reach 3000, almost three times existing size by 2016 3 . As a result of this growth in fleet size, the Chinese and Indian MRO market is likely to touch $3.8B and $ 1 bn resp, growing at 9.5% and 10% respectively. In terms of their geographical spread, MRO service providers in Asia Pacific are concentrated in China, Singapore, Malaysia, and Dubai. Simultaneously, both Dubai and Abu Dhabi Governments have developed MRO hubs. Singapore is considered the worlds leading MRO centre enjoying 3% of global market share and 25% of Asian market share. More than 100 leading international MRO companies operate from Singapore. In 2005, Singapore Aviation industry recorded an output of USD 3.2 billion, out of which 90% came from MRO services. Further, Singapore is home to original equipment manufacturers (OEMs) of the United States, United Kingdom and France who operate either individually or in joint ventures with local companies. OEMs are the key to development of MRO market. Favourable
3 Aero strategy Projection of growth of fleet size of commercial aircrafts of Asia pacific region in 2006 In house In house Draft Final Report -8-24- CH 8 Airport Sector policies, strong distribution and technological network of OEM players, development and availability of skilled manpower and its position as a centre for trade has contributed in the development of MRO industry in Singapore. China, with its 300 MRO companies, generated USD 1.3 billion from MRO business in 2006. China offers tax breaks, better infrastructure, cheaper labour and a bigger market. Further, China's fleet of commercial schedule aircraft stands at 1,060 which is three times India's fleet of 380. According to a forecast by Airbus, China will have 3,238 aircraft by 2026 as against India's 986, reflecting the larger market in China. 8.5.1.2 Indian MRO Market The Indian MRO market is estimated at $800 million and is growing at about 8% annually against a 4% world average 4 . A recent Ernst &Young study has stated that Indian MRO market is expected to grow at an average annual rate of 15 per cent. Presently only Air India and Jet airways have in house maintenance, repair and overhaul facilities in India and in some instances they use too service of foreign MROs like other players. At the industry level, MRO of aircraft involves the following four types of activities: Air Craft heavy maintenance. Engine maintenance and overhaul. Components. Line maintenance. The Indian MRO industry is relatively underdeveloped, but is experiencing rapid expansion. Presently there are few parties that provide comprehensive third party MRO services in India. The market infact comprises of not more than five key players operating at Mumbai and Hyderabad. These players are as under. Exhibit 8-15: Present MROs in India MRO name Location Types of MRO Services Clients Indamer Mumbai Line maintenance Maintenance schedules and phase inspections NA Air Works Mumbai (Additional small facilities at Delhi, Jaipur, Ahmedabad, Chennai, Pune, Engine, Line maintenance, Heavy maintenance and Defence MRO It provides services like Maintenance of Airframe, line maintenance, component maintenance and Air India Express, Reliance, Birla, Essar.
4 Aero strategy estimates Draft Final Report -8-25- CH 8 Airport Sector MRO name Location Types of MRO Services Clients Hubli, Coimbatur and Hyderabad) level of engine maintenance. Max Aerospace& Aviation ltd Mumbai (Juhu Airport) Avionics, electrical and airframe services Jet, Sahara, Deccan, Blue dart, Paramount, King fisher, Spice jet, Pavan Hans HAMCO (Hyderabad Aircraft Maintenance Company) Hyderabad Presently line and component maintenance.
Also planning for develop one stop MRO providing each and every MRO facility. Avionics, electrical and airframe services, simulation and manufacturing services.
Developing Aero Zone in Hyderabad which would provide one stop MRO services. This area would be spread across 250 acres. Not Known HAL Bangalore Line and engine maintenance Overhaul and repair services relating to engine segment. Indian Airforce, Pavan Hans etc. Source: CRISIL Research Indian aviation sector is set for significant growth in MRO appetite, driven by growth in domestic traffic and fleet size. During the period of the 11th Five Year Plan period, passenger traffic is expected to increase by about 19% and cargo traffic by about 11%. MROs in India currently provide only primary level of services. For instance, Max aerospace is the biggest MRO in India but will not provide advanced overhauls and services. Commercial airlines use either Dubai or UK for secondary and tertiary level services. To meet the demand in advanced services, several domestic and overseas aviation players are entering MRO industry. The following Exhibit attempts to capture the status in this regard. Exhibit 8-16: Emerging MRO service providers in India MRO name Location Types of MRO Status Jet Airways Bangalore Maintenance and engineering facility Jet Airways has signed a land-leasing and framework agreement with Bangalore International Airport Limited (BIAL) to set up MRO at BIAL. Lufthansa-Technik of Germany with Hyderabad Signed agreement to set up MRO at Rajiv Draft Final Report -8-26- CH 8 Airport Sector MRO name Location Types of MRO Status GMR group Gandhi international Airport. Boeing and Air India Nagpur Boeing plans to establish a $100 million facility spreading across 100 acres of land at Mihan SEZ in Nagpur Thales International Gurgaon Thales International, the aerospace, defense and security major, has tentatively planned to build an avionics maintenance centre in Gurgaon, Haryana. Taneja Aerospace & Aviation Ltd Pune Taneja, the first Indian private sector company to make non-military aircraft, has entered the MRO sector through joint ventures TAAL Mumbai MRO and aviation park It has tied up with Air Works Commercial MRO Services Pvt. Ltd to lease seven acres and up to five hanger space as part of a strategy to develop its private airfield as an MRO and aviation park Sabena technics of TAT Group, France Hosur (Tamilnadu ) Manufacturing of components and maintenance Sabena technics has signed agreement with TAAL to develop an MRO at TAAL's airfield in Hosur. Airbus Nashik Tie-up with Hindustan Aeronautics (HAL), for setting up a US$ 100 million MRO facility. Also signed MOUs with Maharashtra Airport Development Company. SIA engineering of Singapore with Wadia group Location is yet to be decided. Signed a MOU for setting up MROs in India. HAL and Pratt and Whitney Canada (P&WC) Bangalore Engine maintenance Engine Overhaul and maintenance services. This MRO would have yearly capacity of 150 aircrafts. Air works Hosur Engine and heavy maintenance Setting up commercial MRO with 5 hanger capacity providing line, heavy and engine maintenance services. Source: CRISIL Research Further to the above, there are unconfirmed reports that firms such as Timco Aviation Services of USA, Singapore Airlines, Singapore Technologies Aerospace, the Israeli national airline, and engine makers like Snecma, Rolls Royce, GE are planning to establish their base at India. Draft Final Report -8-27- CH 8 Airport Sector Given the large number of potential entrants to the Indian MRO industry, it would be relevant to assess whether there is a supporting demand. We may assess a few pointers. The Indian civil aviation sector has around 400 aircraft on order. While the current slowdown may lead to cancellations, the underlying market potential is huge, (if only very price elastic). India at present has 327 commercial schedule aircrafts as represented in following Exhibit. However the Centre for Asia Pacific Aviation (CAPA) has predicted that India has the potential to service a fleet of 1,000 commercial planes and 500 general aviation aircraft by 2020, including replacement of current fleet. Exhibit 8-17: Indian aircraft fleet in 2006-07 Aircrafts Present fleet Schedule Aircrafts 327 Private Aircrafts 325 Helicopters 179 Total 837 Source: DGCA Aircraft register Such large expansion will also drive growth in MRO activity. It is considered more cost effective to have these facilities within the country rather than outside for cost saving. The LCC airlines are extremely sensitive to cost and domestic MRO services are likely to benefit from them. Another factor that could drive MRO business in India is availability of low cost manpower. As per a recent E&Y study, Indian MRO industrys greatest advantage is low manpower costs (20 per cent lesser costlier than Asia-Pacific region and nearly 50 per cent lesser than that in the US). The MRO facilities will foster creation of ancillary and associated industries and services like training institutes, component repair and testing of avionics equipment, electrical and electronic system components, hydro mechanical and pneumatic system components repair of composite structures, passenger seat repair, cabin panel repair, etc. This is leading to a increasingly favourable policy stance of the Government towards MRO. For instance, the government is now allowing 100% foreign direct investment in the MRO sector. This could lead the segment to witness a higher FDI. Overall, recent estimates have put the potential of Indian MRO industry at US$ 30 billion by 2020. 8.5.1.3 MRO Opportunity Implications for Gujarat It is important to assess the opportunities for MRO industry in Gujarat in view of the high demand and impeding supply. Several factors have implications for such opportunity in Gujarat To aid MRO viability, firms need to establish themselves near established airports. This greatly enhances their business opportunities. However busy airports like Mumbai are already congested and have little space left for functions like MRO. This could drive this business to other airports. MRO activity in Gujarat can find opportunities if it is near busy international airports, where there is supporting presence of industries and plenty of land/space availability. Under these criteria, any Draft Final Report -8-28- CH 8 Airport Sector Perishable 17% Garment / Textiles 36% Leather Goods 10% Handicrafts 4% Engineering Goods 11% Miscellaneous 11% Chemicals/ Pharma 11% location in South Gujarat would be benefited by proximity to two international and busy airports namely Ahmedabad and Mumbai international airports. PCPIR region situated at Dahej is a rapidly growing industrial region and exhibits potential to host MRO services for aircrafts as large tracts of land could become available under PCPIR development. The place is strategically located and can serve Vadodara, Surat, Mumbai, Ahmedabad and Indore airports. Secondly Dahej, being located in the DMIC and along the DMC, possess excellence road, rail and port connectivity. The PCPIR MRO facility can also double as an air cargo complex. Air cargo opportunity is discussed in the next section. It may be emphasised that the strategic intent should be to invite a large player/s in this segment immediately to take advantage of early entrance as numbers of players have planned to enter the MRO segment. 8.5.2 Air Cargo Opportunity Air cargo comprises goods with high-value, high-time dependency, or perishable cargo. Growing at 6% pa, the world airlifted cargo accounted for 2% of international trade by volume and 30% by value in 2006- 07. Its growth has traditionally exhibited strong correlation with world GDP growth. Boeing forecasts that 60 million tonnes of cargo will be transported by air in the year 2017. Indias 14 international airports account for 93% of export import air cargo traffic. Indias total air based trade touched 10.72 lakh tonnes in 2007-08. Textiles and perishables comprised 53% of Indias air cargo export by volume in 2006-07. The share of different types of air cargo exports from India is shown below. Exhibit 8-18: Share of air lifted export commodities in India in 2006-07 Source: AAI/Air India and CRISIL Analysis. Perishable include seafood, fruits & vegetables, cut flowers, eggs etc Miscellaneous includes hazardous Chemicals, Pharmaceuticals, Unaccompanied baggage, Tea, Mica, Dangerous goods etc. Major destinations for Indias perishable goods are Gulf countries (66% of total perishables) and UK (12%). Mumbai and Delhi are major cargo center of India accounting for 57% of air cargo export and 54% Draft Final Report -8-29- CH 8 Airport Sector of Indias air cargo import. This is owing to well developed infrastructure and vicinity of industrial activities around these two metros. Mumbai is leading in export of perishable product export with 49% market share. It can be noticed that Gujarat has strong industrial presence in major air cargo categories. Gujarats share of national output is 30%, 16% and 6% in chemical and pharma, textiles, apparel and engineering goods respectively. Currently Gujarats airports handle 2% of Indias air cargo of 2007-08 as seen below. Ahmedabad is the leading air cargo center accounting for 83% of states air cargo traffic in 2007-08. Cargo traffic of Ahmedabad airport comprised 44% domestic and 56% international cargo (2006-07). Exhibit 8-19: Air cargo traffic at Gujarat's airports (tonnes) Airport 2005-06 2006-07 2007-08 Ahmedabad 16878 20211 23576 Vadodara 3435 3422 3377 Rajkot 825 872 812 Indias total 1403977 1553465 1713656 Gujarats share 2% 2% 2% Source: AAI and CRISIL Analysis Ahmedabad is also the leading airport handling 67% of Gujarats domestic air cargo traffic. This is followed by Vadodara (26%) and Rajkot (7%) Rajkot airport. In last three years, the growth of air cargo at Ahmedabad Airport was 16.6% as against 10.5% of national air cargo industry growth 5 . As seen below, Ahmedabad air cargo is principally garments and engineering goods. Miscellaneous cargo comprises high value chemicals and pharmaceuticals. Exhibit 8-20: Share of air lifted export commodities at Ahmedabad airport in 2006-07
Source : AAI
5 Source: AAI Perishable 2% Garment / Textiles 20% Handicrafts 1% Engineering Goods 26% Miscellaneous 51% Draft Final Report -8-30- CH 8 Airport Sector In this perspective, Gujarats strength in chemical, textiles and horticulture can be leveraged by augmenting air cargo export from the state. Air cargo by definition is extremely time sensitive and/or high value cargo and it is possible to find export orders if facilities for quick transport are available. Gujarat also has a potential in perishable goods due to considerable emphasis on the development of horticultural crops. The major fruits crops grown in Gujarat are banana, mango, citrus and chikoo. Major vegetables grown in Gujarat are onion, potato, brinjal, tomato, okra and cucurbits. The productivity of fruit crops and vegetable are estimated at 18.18 MT/ha, 16.56 MT/ha which is higher than the national average The State also produces spices such as cumin, fennel, and garlic and enjoys a virtual monopoly in seed spices. Area under flowers like Rose, Lily and Marigold is increasing. Various aromatic plants like pacholi & pamaroza is cultivated in the southern part of the State. There is a scattered cultivation of medicinal plant like allovera, sena, gugal in the State. Gujarat also has 12 co-operative milk plants with combine milk handling capacity of 70.10 lakh litres per day, 11 private dairy plants and 12991 co-operative dairy societies. Following exhibit display perishable goods production in Gujarat. Exhibit 8-21: Production of horticulture products in Gujarat Perishable commodities Production in Gujarat (MT) Leading production area Comments Flowers 41821 Surat, Vadodara, Ahmedabad, Bharuch, Navasari, Kheda, Anand South Gujarat region accounted for 49% production of Gujarats Flower. Along with Ahmedabad, Anand and Kheda it comprise two third of states production. Fruits 46905 Bharuch, Surat, Vadodara and Anand South Gujarat region comprise 55% of fruits production of Gujarat in 2004-05 making it largest fruit production region of Gujarat. Vegetable 63082.5 Bhavnagar, Banashkantha, Rajkot and Junagadh Saurashtra region accounted for 40% of Gujarats production Spices 5057.3 Junagadh,Rajkot,Banas kantha, Patan,Mehsana Saurashtra region and North Gujarat region d accounting for 50% and 26% of spices production of Gujarat respectively. Dairy products (Milk) 69.60 Anand, Kheda, Ahmedabad, Mehsana Comprise mainly co-operative plants. Source: Directorate of Horticulture of Gujarat state, Figures for 2004-05 It can be observed from the above exhibit that South Gujarat region is leading producer of flowers and fruits and central Gujarat region is leading producer of milk and flowers. Thus the production of perishable industries products in central and southern regions can further be strengthened through provision of adequate air cargo lifting facilities at Ahmedabad and Surat. Presently Ahmedabad has one cargo complex operated by Gujarat State Export Corporation. The capacity is this cargo complex is constrained and there is need to provide more facilities, especially for Draft Final Report -8-31- CH 8 Airport Sector perishable goods. Further, the Surat trade associations for perishable goods have demanded air cargo lifting facilities at Surat. However, this seems difficult at the moment due to unviable volumes. But owing to potential of cargo of perishable goods it could become viable in next five year period and cargo led development can boost the economy of the region. Given the large presence of chemicals and pharmaceuticals in the air lifted cargo, it could be extremely beneficial to locate an air cargo hub around Bharuch / Dahej area. Thus the PCPIR could host a large air cargo complex along with proposed MRO facility. 8.6 Key project This section identifies a project which has higher visibility, impacts to realize states full air traffic potential and is an economic multiplier impacting investment, employment and there by the economy of the state. 8.6.1 Greenfield International Ahmedabad Airport: Ahmedabad is major international airport in western India apart from the Mumbai airport. Ahmedabad airport has witnessed phenomenal air domestic and international passenger traffic growth surpassing all earlier projections and assumptions. It is also estimated that this trend will continue owing to the states economic growth, though there may be a temporary dip in the short run due to the current slowdown in the aviation sector. In this background, the demand and supply analysis for Ahmedabad Airport is performed. The outcome depicts that the airport will face capacity constraint by 2012-13 even taking into account present capacity expansion. Further expansion will be constrained due to the non availability of land in the vicinity of present airport. This would require the development of new Greenfield project. 8.6.1.1 Project Rationale and benefits Domestic traffic grew at 36% CAGR and international traffic at 29% CAGR in last five years at Ahmedabad Airport against a national average of 20%. Even if air traffic grows at 25% up to 2015 and dips thereafter, it will require capacity augmentation by around 2013-14 or earlier as explained in the section on supply. This emerging demand supply gap is exhibited in the following figure.
Draft Final Report -8-32- CH 8 Airport Sector Exhibit 8-22: Passenger traffic growth at Ahmedabad airport vis-a- vis its yearly capacity
Source: CRISIL analysis Earlier trends in other states such as Andhra Pradesh and Karnataka indicate that these states started planning for new airports once their existing airports reached the 1 mn pax mark. As versus this the Ahmedabad airport is already serving 3.3 million passengers. This is due to the fact that the development of an airport can take more than 7 years as it requires investment, land acquisition, environment clearance and detailed planning. Thus development planning for the new airport is required to be started soon. A greenfield airport planned in a manner that takes care of future requirements would also impact the States economy positively. Besides the new investment of around Rs 3000 crore creating employment during construction and operations phase, it will cater to the increased air traffic that would materialise owing to the large industrial investment planned in the state. The development of new airport in the vicinity of the Ahmedabad can also decongest Mumbai airport. Development of Greenfield airport would further help in development of other economic activities like air cargo, service sector, development of foreign trade and industries and increase foreign tourist arrivals. 8.6.1.2 Site selection Studies have been done for selection of site for the new airport at Ahmedabad by CEPT University, Ahmedabad and others. These studies have indicated a number of locations. Based on analysis of locational and road transport plans and projects, we recommend following criteria site selection: 1. The site should be close to Ahmedabad city as it is the major hub for air traffic. 2. Present and proposed road connectivity should converge at this location so that emerging economic areas such as SIR, PCPIR and established NRG bases such as Anand, Nadiad and Vadodara find it easy to access the site. 0 50 100 150 200 250 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 2 0 2 0 Ahmedabad - Domestic Ahmedabad - International Vadodara Exhaustion of 53 lakh domestic passengers and 23 lakh international passengers capacity in 2011-12 and 2013-14 resp. P a x
D e m a n d
i n
L a k h
0 50 100 150 200 250 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 2 0 2 0 Ahmedabad - Domestic Ahmedabad - International Vadodara Exhaustion of 53 lakh domestic passengers and 23 lakh international passengers capacity in 2011-12 and 2013-14 resp. P a x
D e m a n d
i n
L a k h
Draft Final Report -8-33- CH 8 Airport Sector 3. The site has to be above mean sea level with good drainage so that there is no flooding during monsoons. 4. The site area should have good amount of Government land available in the vicinity, Based on the above criteria, a site in the southern area of Ahmedabad, at a suitable location on the Dholka Kheda road is indicated for reference. The area will find high speed connectivity from proposed Bhavnagar-Pipli-Dholera Vataman Sarkhej four lane road. The proposed Dholera SIR will also get connectivity through this road. High speed connectivity between the city and the airport will be provided through this proposed road. This road is further proposed as an expressway. Further, this area will get connectivity from Anand Nadiad side through the proposed Bagodara Tarapur- Vasad six lane road. This road will also connect the PCIPIR area to the proposed PCPIR near Bharuch Dahej. The area closer to Kheda is known to have flooding issues and hence site can be closer to Dholka if land is available. 8.6.1.3 Project proposal The project involves all activities related to project development i.e. airside and city side infrastructure development. This includes land acquisitions, land development, passenger & cargo terminal, ATC, airfield lighting, fire station, electric substation, cargo facility, water treatment plant, car parking , hangers, cargo and passenger apron, taxiway, runway, administrative block ,isolation bay ,GSE storage and A.C plant, access internal roads, hotels and commercial development, night parking, basic repair and maintenance etc. Detailed planning is required for development of above critical infrastructure facilities. 8.6.1.4 Investment The cost of the project based has been derived based on cost incurred to the Greenfield airports of Hyderabad international airport and Bangalore international airport which have been developed at a cost of around Rs 2500 crore each. The investment has thus been estimated at Rs 3000 crore at 2008 prices. 8.6.1.5 Implementation strategy The project can be developed through Public Private Partnership through the Develop, Finance, Operate and Transfer principle. Government can enter into concession agreement with an SPV formed to develop the project. The private sector player forming the SPV can be selected through a transparent bidding process. Government can provide support in terms of land acquisition and environment clearance and ensure adequate land availability. Their revenue stream would be generated through aeronautical and non aeronautical facility usage charges. 8.7 Project shelf A project shelf has been developed for the airport sector based on inputs from MoUs signed during Vibrant Summits, AAIs plan to develop 35 non-metro airports, relevant projects from the Aviation Master Draft Final Report -8-34- CH 8 Airport Sector plan, and gaps and opportunity emerging from the demand supply/opportunity assessment. In all cases, suitable modifications have been done to update the details. This project shelf is presented in the section 7.9 and pictorial representations of nature of projects suggested at different locations are presented in following exhibit. Exhibit 8-23: Project shelf at a glance
Source: CRISIL analysis The final project shelf for airports in terms of means of finance is represented below. It is noted that a large private sector participation is envisaged in the sector.
The final project shelf for airports in terms of means of finance is represented below. It may be noted that large private sector participation is envisaged in the sector.
Bhuj Bhuj SANTHALPUR IA SANTHALPUR IA SAVLI SAVLI - - HALOL IA HALOL IA SURAT SURAT- - NAVASARI IA NAVASARI IA VALSAD VALSAD UMERGAON IA UMERGAON IA Rajkot Rajkot Junagadh Junagadh Jamnagar Jamnagar Porbandar Porbandar Veraval Veraval Bhavnagar Bhavnagar Surendranagar Surendranagar Palanpur Palanpur Mahesana Mahesana Gandhinagar Gandhinagar Ahmedabad Ahmedabad Halol Halol Vadodara Vadodara Bharuch Bharuch Surat Surat Navasari Navasari Valsad Valsad DHOLERA SIR DHOLERA SIR DHAHEJ DHAHEJ- - BHARUCH PCPIR BHARUCH PCPIR Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Existing Airport Modernization/Expansion of Rajkot Airport. Facilities:Expansion of Runway,Apron,Terminal building Modernization and Expansion of Vadodara Airport Facilities: Expansion of Runway, Apron, Terminal building, Maintenance hanger and Airfield development. Development of Aviation training institute in Mehsana Modernization and Expansion existing Ahmedabad Airport Facilities: Terminal building, Apron and amenities Gandhidham Gandhidham Mundra Mundra Mandvij Mandvij Existing Airstrip Amreli Amreli Morbi Morbi Wanksner Wanksner Diu Diu Development of Airstrip at Ankleshwar Development of Airstrip at Mandvi Development of Greenfield international airport near Ahmedabad Air craft MRO and air strip at PCPIR Proposed Greenfield international airport Proposed MRO Air cargo Terminal at Surat Bhuj Bhuj SANTHALPUR IA SANTHALPUR IA SAVLI SAVLI - - HALOL IA HALOL IA SURAT SURAT- - NAVASARI IA NAVASARI IA VALSAD VALSAD UMERGAON IA UMERGAON IA Rajkot Rajkot Junagadh Junagadh Jamnagar Jamnagar Porbandar Porbandar Veraval Veraval Bhavnagar Bhavnagar Surendranagar Surendranagar Palanpur Palanpur Mahesana Mahesana Gandhinagar Gandhinagar Ahmedabad Ahmedabad Halol Halol Vadodara Vadodara Bharuch Bharuch Surat Surat Navasari Navasari Valsad Valsad DHOLERA SIR DHOLERA SIR DHAHEJ DHAHEJ- - BHARUCH PCPIR BHARUCH PCPIR Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Greenfield Port Special Economic Zone Existing Port Special Industrial Area Urban Centre Special Investment Region Dedicated Freight Corridor Existing Airport Modernization/Expansion of Rajkot Airport. Facilities:Expansion of Runway,Apron,Terminal building Modernization and Expansion of Vadodara Airport Facilities: Expansion of Runway, Apron, Terminal building, Maintenance hanger and Airfield development. Development of Aviation training institute in Mehsana Modernization and Expansion existing Ahmedabad Airport Facilities: Terminal building, Apron and amenities Gandhidham Gandhidham Mundra Mundra Mandvij Mandvij Existing Airstrip Amreli Amreli Morbi Morbi Wanksner Wanksner Diu Diu Development of Airstrip at Ankleshwar Development of Airstrip at Mandvi Development of Greenfield international airport near Ahmedabad Air craft MRO and air strip at PCPIR Proposed Greenfield international airport Proposed MRO Air cargo Terminal at Surat Draft Final Report -8-35- CH 8 Airport Sector Exhibit 8-24: Sources of funds Central Government/ AAI State Government PPP Total 749 3 5118 5870 Source: CRISIL analysis Rs. crore 87% of proposed private sector investment comprises development of International airport project at Ahmedabad, and MRO/ Air cargo hub at PCPIR region. Most of the other investments are towards improvement of air side infrastructure at key existing airports. This is to be carried out by AAI as it is the sole authority controlling these airports. Thus private investment and investment and Airports Authority of India are considered the major source of funds for the above projects. 8.8 Action agenda To ensure that the investments in the coming period actually materialise, the State Government would need to take a series of measures. This section briefly outlines these action measures. 8.8.1 Promote regional air services As discussed earlier, Gujarat cities are poorly connected with non-metro destinations of the country. While international connectivity will be purely driven by demand, regional connectivity can be influenced by a number of measures. These are discussed below: Lower Sales tax on ATF: Fuel costs are estimated to form about 50% of the operating cost of larger aircraft and 30% of a fifty seater aircraft. The state government on its part could reduce the sales tax on aviation turbine fuel This would encourage smaller airlines to operate in the State. Rationalisation of Taxes: ATF prices are about 65 per cent higher in India than other parts of the world. Further to this there is a high central excise and customs levy. The state Government could take up the issue of rationalisation of taxes and charges with the Government of India. The number of domestic flyers in July 2008 fell to 58.51 lakh compared to 68.77 lakh in July 2007, a fall of -14.9%. The fall was primarily due to high fares being charged to recover high fuel charges and taxes. Concessions in landing and parking fees: While this would be in the domain of AAI, the state government could emphasise the need to encourage smaller airlines by pursuing with AAI for concessions to smaller aircrafts. Exploring transfer of smaller Airports to Government of Gujarat: The present tax structure on air fare is governed by AAI and is inflexible. If the Government of Gujarat creates the institutional capacity to manage airports through suitable joint ventures with private developers/infrastructure institutions, it can take over some of these airports. In such cases, the tax structure can become flexible and overall fare impact to passenger could be lowered. Given that the sector is extremely sensitive to prices, any lowering of prices, particularly for small aircraft operations could generate demand in some locations. Draft Final Report -8-36- CH 8 Airport Sector 8.8.2 Promote air cargo hubs The South and Central Gujarat areas have strong presence of perishable industries which can be leveraged to make cargo airline operations viable. Ahmedabad, and PCPIR Air Cargo Hub (proposed) could be used to land medium size aircrafts periodically to transport such cargo. Since perishable cargo would not be enough, textile, engineering and chemicals sector could be explored for providing viable volumes as these sectors are the biggest users of air cargo. Further, air cargo infrastructure at many airports such as Ahmedabad, Vadodara, Rajkot needs to be strengthened. 8.8.3 Address land issue for expansion of existing airports Several AAI Airports in the State such as Rajkot require expansion of runways, apron and/or terminal capacities. However, while such expansion has been approved by the AAI, the projects are constrained by the non-availability of land for such expansions. Land is scarce since required sites are occupied by residential / commercial development, important roads, or even railway lines. This requires shifting of a large number of such utilities and settlements. The issue has been delaying development plans for these airports. The issue needs to be resolved in an imaginative manner to allow for expansions. One way is to shift the entire airports which are located inside the city to greenfield sites outside city limits. Such greenfield airports could cater to more than one town. Another solution could be to through innovative design. Existing roads could be taken underground, just as some airports of the world have done. However, the latter are more expensive and need to be assessed in terms of economic cost and benefit. 8.8.4 Encourage Aviation Schools and Flying Clubs The growth in the aviation sector in India in the past five years has led to the creation of many jobs. This had led to a number of schools offering aviation training in flying, cabin hospitality, ground staff, airport managers and operators. A number of aviation schools exist in Gujarat. Flying Clubs exist at Ahmedabad, Vadodara and Mehsana. Despite this, large numbers of students from Gujarat get enrolled in expensive US flying schools every year. Given the demand, more investments could be encouraged in Flying Schools and Aviation Academies. While the AAI is prepared to lease out its existing unused airstrips such as Deesa to Aviation Academies, the prospect is found unattractive because of high rentals demanded by AAI. State Government could agree to lease out its unused airstrips such as Mehsana, Mandi and Amreli to these clubs at a token cost. Flying Clubs would be able to offer courses at a lower cost that existing clubs at Mumbai, Ahmedabad and Vadodara since they would not have to pay the expensive lease rentals to AAI and thus could attract spill over demand. Further, there is a shortage of pilots in certain classes of aircrafts and helicopter in the country. To address this, the union budget proposed to remove the duty on helicopter simulators to facilitate training of helicopter pilots in the country. Taking advantage of this, helicopter pilot training academy could be encouraged. Draft Final Report -8-37- CH 8 Airport Sector Besides flying clubs, career opportunities exist in cabin crew, ground staff, security, and aircraft operations. Academies that develop such skills could be established in partnership with private sector and aviation industry stakeholders. 8.8.5 Attract regional hub of an airline All airlines require a regional hub where their parking, basic maintenance and administrative capacities can be concentrated in a cost effective manner. The ideal location for such regional hub is the location of their maximum flight concentration. However, these locations often turn out be a metro like Mumbai which does not have space for a new entrants looking for a regional hub. In such situations, the regional hub can be located at an airport closer to the metro. This role suits Ahmedabad airport as it is close to Mumbai and does not involve much deviation from national/international flight paths. However, present Ahmedabad Airport is severely constrained in terms of parking and hanger space. (Presently, there are only four night parking slots which may go up to six upon expansion being completed. The airport authorities have been refusing night parking slot demands from airlines). However, provision for such activity may be provided in the new international airport based on a detailed needs assessment.
Draft Final Report -8-38- CH 8 Airport Sector 8.9 Project shelf Sr. No Project name Project speciation Location Project status Project rational Promote r Invest ment (Rs crores) Phasing 2010 2012 2017 1 New international airport Development of Greenfield airport including LA, land development. Includes airsides and city side infrastructure including cargo complex. Ahmedabad Site identification process is underway. Broad location is indicated by CRISIL also. Capacity limitations at existing airport considering demand forecasts made by CRISIL PPP 3000 3000 2 Airport Expansion Airfield development, Terminal Bldg expansion, maintenance hanger, runway extension to 2500 m, apron Vadodara The project is being taken under expansion/up gradation of 35 airports project by AAI Emerging capacity constrains on runway, apron and terminal bldg. AAI 252 252 3 Cargo terminal building Cargo terminal bldg to store, handle and export cargo such as fruits and vegetables, gems and jewellery, textiles etc. Atmosphere controlled storages may required. Surat Proposed South Gujarat holds large promise in terms of export of fruits and vegetables by air. Current volumes may not justify special cargo flights but volumes can develop in the future. PPP 10 10 4 Functional airstrip catering 50 seater aircraft Includes airfield payment, Passenger terminal building, other technical building and site development and taxiway with 10.5 m wide shoulders. Ankleshwar No action has been taken. Yet in planning stage To serve Ankleshwar, Jagadia and Panoli industrial areas, Dahej SEZ an upcoming PCPIR. AAI & Ankleshw ar industrial Associati on 16 16 Draft Final Report -8-39- CH 8 Airport Sector Sr. No Project name Project speciation Location Project status Project rational Promote r Invest ment (Rs crores) Phasing 2010 2012 2017 5 Airport Expansion Extension of runway by 450 m, apron to 270m X 130 m, Terminal Bld to 9000 sw mt and car parking of 2500 sq ft or more, among other elements that may be added by AAI later. Rajkot The project is being taken under up expansion/upgradation of 35 airports project by AAI. There are LAQ issues as a Rajkot Jamnagar road has to be diverted if runway is to be extended. Runway expansion required to improve safety and allow larger aircrafts. AAI 173 173 6 Modernisation of existing airport. International Terminal Bldg, Apron for international flights, parking etc. Ahmedabad Announced in 2007 and it is in progress. Domestic terminal is ready and in operations. International terminal and new apron in progress. Decongesting metro airport for catering to increased domestic and international traffic growth. AAI 300 300 7 Aviation City for aviation training, services Mehsana Project is under implementation. Exact details are being investigated. Training of aviation sector manpower, repair and maintenance of aircrafts. Ahmedab ad Aviation & Aeronauti cs Ltd 100 50 50 8 Formation of Gujarat Airport Infrastructure Development Company Ltd. Formation of state level development organisation to launch project specific Joint Venture Companies / SPV - Process of company formation underway, subject to some internal clearances within GoG Apx organisation could identify projects and develop them in JV with private sector. GoG 3 3 9 Development of MRO and Hanger space and other support infrastructure PCPIR region The project is proposed under this study. Leveraging the strategic location PPP 2000 2000 Draft Final Report -8-40- CH 8 Airport Sector Sr. No Project name Project speciation Location Project status Project rational Promote r Invest ment (Rs crores) Phasing 2010 2012 2017 airstrip along with Airstrip and runway (Dahej) advantage through setting up MRO.This will bring other ancillary industry in the state and boost the economy. 10 Development of Functional airstrip catering 50 seater aircraft Includes airfield pavment, Passager terminal building, other technical building and site development and taxiway with 10.5 m wide shoulders. Mandvi in Kutch region To cater tourist demand of special tourism area Mandvi. AAI 16 16 Total 5870 2353 3501 16 Draft Final Report -8-41- CH 8 Airport Sector 8.10 Annexure 1: Passenger Growth Rates for Gujarats airports Commodity Past CAGR (2003-07) Adopted growth rate Rationale 2007- 15 2016- 20
Ahmedabad 36% 24% 12% Leading urban center of Gujarat and seventh largest urban agglomeration of India , constituting 73% market share in Gujarat's air traffic in 2007-08.Its air traffic is growing at 36% and 39% since last five and three years respectively. It displays increasing trends of market share in Gujarats air traffic as its market share increased 6% in last three years exhibiting enormous air traffic potential. Most populated commercial capital of Gujarat exhibiting highest numbers of air connectivity with metro and non metro centers of Gujarat. Gujarats 25% urban population resides in Ahmedabad. Most literate city of Gujarat with 79% literacy rate which is 10% higher than state average. The city's educational and industrial institutions have attracted students and young skilled workers from the rest of India. Thriving chemical, textiles and pharmaceutical industry are based in Ahmedabad. Service sector employs 56% of cities main worker indicating fast growing service sector of city. House leading cricket stadium where international matches are played. Citys service sector is well developed and houses largest numbers of hotels in Gujarat. Many SEZs and IT Park are coming up in vicinity of Ahmedabad. World class GIFT project boosting the service sector of the state is in advance stage of implementation. Considered as tourist arrival hub of Gujarat as it is first stop for tourists visiting the Gujarat. This is owing to robust direct air connectivity with metro and non metro cities of India. Mostly all the low cost carriers have directs flights from Ahmedabad. However owing to the increased oil prices contributed in closer of many flights. Thus considering the oil factors , service and industrial sector growth it assume that growth would remain at 25% Draft Final Report -8-42- CH 8 Airport Sector Commodity Past CAGR (2003-07) Adopted growth rate Rationale 2007- 15 2016- 20
which will deepen to 12% in the next period. Vadodara 13% 14% 7% Known as Sanskar nagari, Baroda is most cosmopolitan city of Gujarat known for its culture, education and heritage. Second most literate city of Gujarat after Ahmedabad with 78% literacy rate which is 9% higher than state average. It resides 11% of states urban population and produces the second largest pool of engineers making it educational hub of Gujarat. Accounts for 13% of Gujarats industrial production and house many public sector, private sector and MNC indicating strong economic fundamentals. Many knowledge based industries are coming up in the city such as L&Ts engineering park, IT park and Biotech park in Savli. This will ensure service sector growth in the city and its surrounding area. Constituting 15% market share in Gujarats air traffic in 2007-08.Its air traffic is growing at 24% and 13% since last two and five years respectively. Direct connectivity with Mumbai, Delhi and Ahmedabad. Mostly catering Mumbai based traffic. Presence of operations of Low Cost Carriers. Owing to above factors 14% growth rate has been adopted for the period of 2007-15 which will deepen to 14% in the next half considering the stabilization of economy and traffic growth. Rajkot 5% 7.5% 4% It is fourth largest city of Gujarat and 28 th urban agglomeration of India. Resides many small and large scale industries exporting casting and forging Products. This industrial cluster has been developed owing to cater casting requirement of diesel engine industry. It also considered as automobile hub of the Gujarat as it produced auto ancillary parts. Flourishing retail industry. Draft Final Report -8-43- CH 8 Airport Sector Commodity Past CAGR (2003-07) Adopted growth rate Rationale 2007- 15 2016- 20
Trade center of Saurashtra known for trade in gold and cash crops. Constituting 5% market share in Gujarats air traffic in 2007-08 and its air traffic is growing at 5% since last five years. Only connectivity with Mumbai. Caters Junagadh bound tourists as many tourist places are residing in the district. Higher growth rate of 7.5% has been assumed which is 2% more than planning commissions assumptions for the period up to 2015. Then further it will lower to 4% in the next period. Bhuj 8% 9% 5% Only airport other than newly built Kandla airport serving the Kutchh region. Leading urban city in the katch regions residing many colleges, schools and hotels. Constituting 3% market share in Gujarat's air traffic in 2006-07 and its air traffic is growing at 14% and 8% since last two and three years respectively. Traffic mainly comprise for tourism purpose as it is an important gateways for tourist places of Katch region. Many capital intensive industries are residing in the city after announcement of tax incentive by central Government. Presence of port led industries in the surrounding area of Bhuj. Direct connectivity with Mumbai though presence of low cost airlines such as Kingfisher and Jet. Tourism industry will be develop considering the Governments initiatives in this region Higher Side 9% growth rate has been adopted considering above discussion. This will further lower to 5% in next period. Bhavnagar 2% 7% 4% Sixth largest city of Gujarat witnessing development of many ports in its nearby areas and industries. Its commercial importance enhance owing to proximity with Gulf of Cambay and Arabian sea. Draft Final Report -8-44- CH 8 Airport Sector Commodity Past CAGR (2003-07) Adopted growth rate Rationale 2007- 15 2016- 20
Providing linkages to ports such as Pipavav and Simar and residing worlds biggest ship breaking yard recycling 50% of the salvaged ships of the world. This also helped to develop ship breaking industry in the region. Region also has diamond industry which is developing. Constituting 2% market share in Gujarats air traffic in 2006-07 .Its air traffic is growing at 23% since last two years . Direct connectivity with Mumbai and Delhi through LCC such as Jet, Kingfisher and Deccan. Growth rate of 7% has been adopted considering the recent spur in the air traffic. Jamnagar 16% 12% 6% Historically known for its developed brass part industry owing to more than 5,000 large scale and 10,000 small scale units manufacturing brass items are residing in that areas. Nearly 200 tons of brass goods are produced in this area daily. Constituting 3% market share in Gujarats air traffic in 2006-07.Its air traffic is growing at 19% and 21% since last two and three years respectively. Third airport of Gujarat after Ahmedabad and Vadodara exhibiting more than 15% compounded growth in traffic since last five years. Witnessing spur in the traffic owing to establishment of Reliance refinery and Esaar refinery in the state. It is assume that owing to presence of these industries economic activities will be spread out and continue to exhibit double digit growth. 12% growth rate has been adopted. Draft Final Report -8-45- CH 8 Airport Sector Contents 8 AIRPORTS.......................................................................................................... 8-2 8.1 Airport sector goals.................................................................................................................8-2 8.2 Review of earlier planning documents ..................................................................................8-3 8.3 Key airport sector trends ........................................................................................................8-4 8.4 Assessment of passenger led opportunities ........................................................................8-6 8.5 Assessment of non-passenger opportunities.....................................................................8-20 8.6 Key project..............................................................................................................................8-31 8.7 Project shelf............................................................................................................................8-33 8.8 Action agenda ........................................................................................................................8-35 8.9 Project shelf............................................................................................................................8-38 8.10 Annexure 1: Passenger Growth Rates for Gujarats airports............................................8-41 Draft Final Report -8-46- CH 8 Airport Sector List of exhibits Exhibit 8-1: Projects Shelf in BIG-2020 document prepared in 2005 ........................................................8-4 Exhibit 8-2: Passenger traffic at Gujarat airports .......................................................................................8-6 Exhibit 8-3: Categorization of Gujarat's airports based on passenger growth and market share .............8-7 Exhibit 8-4: Growth rates adopted for domestic passenger demand forecast...........................................8-8 Exhibit 8-5: Domestic passenger traffic projection for Gujarat airports (lakh passengers)........................8-8 Exhibit 8-6: Air traffic projection for Gujarat airports: Comparison with previous studies (Lakh passengers) ............................................................................................................................................................8-9 Exhibit 8-7: International passenger traffic projection for Ahmedabad airport (Lakh Passengers) .........8-10 Exhibit 8-8: Regional connectivity at Gujarat airports ..............................................................................8-11 Exhibit 8-9: Capacity of Ahmedabad airport post 2009 expansion..........................................................8-12 Exhibit 8-10: Emerging Small New Airports and Airport Opportunities - .................................................8-17 Exhibit 8-11: Probable city pairs for air taxi services ...............................................................................8-20 Exhibit 8-12: Region wise share of MRO market in 2006........................................................................8-22 Exhibit 8-13: World MRO market in 2006 ................................................................................................8-22 Exhibit 8-14: Changing trends of MRO industry.......................................................................................8-23 Exhibit 8-15: Present MROs in India........................................................................................................8-24 Exhibit 8-16: Emerging MRO service providers in India ..........................................................................8-25 Exhibit 8-17: Indian aircraft fleet in 2006-07 ............................................................................................8-27 Exhibit 8-18: Share of air lifted export commodities in India in 2006-07..................................................8-28 Exhibit 8-19: Air cargo traffic at Gujarat's airports (tonnes) .....................................................................8-29 Exhibit 8-20: Share of air lifted export commodities at Ahmedabad airport in 2006-07...........................8-29 Exhibit 8-21: Production of horticulture products in Gujarat ....................................................................8-30 Exhibit 8-22: Passenger traffic growth at Ahmedabad airport vis-a- vis its yearly capacity ....................8-32 Exhibit 8-23: Project shelf at a glance......................................................................................................8-34 Exhibit 8-24: Sources of funds .................................................................................................................8-35