The Hindu : National : Low-cost airports the next step

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Low-cost airports the next step

Vinay Kumar

They can help in rationalising costs, says a new study

Low-cost airports shall further the no-frills experience
They could be an answer to the sector’s challenges

NEW DELHI: Low-cost airports are the next step for the Indian airport industry which can offer enhanced connectivity across the country and help in rationalising the costs incurred by the airlines and decongesting traffic at regular airports.

Low-cost airports can come as a relief for low-cost carriers, whose financial position has been negatively impacted by aviation fuel prices and operational costs and which currently pay the same charges as full service airlines.

“While maintaining all standards and safety norms, these airports are expected to have no baggage conveyor belts, aerobridges and buses for the passengers. These airports shall further the no-frills experience being offered by the low-cost carriers,” says a study on ‘Indian Airports,’ conducted by KPMG, an audit and advisory body.

New terminal

Cities that already have an operational runway could get a new low-cost terminal. At Delhi airport, Terminal 1, operated and managed by the Delhi International Airport Limited (DIAL), is expected to be developed as an exclusive terminal for the no-frills carriers by 2010, the study says. Along with the non-operational airports, low-cost airports could be the answer to the challenges faced by the aviation sector in the country.

Taking an optimistic outlook of the aviation industry, the study noted that low-cost carriers, which opened the skies for the average Indian traveller, have underpinned the growth story of aviation. With less than five per cent of the Indian population currently travelling by air, there is a large untapped market, which could continue to fuel growth in the sector.

“To capitalise on this opportunity the key stakeholders in the airport industry need to focus on enabling regulations and infrastructure for low-cost carriers,” it says.

Potential areas

“Airports in India are future potential areas not just from an aviation perspective but also from a real estate point of view. While this might be a new phenomenon in India, globally, airports have embraced the concept of developing the surrounding commercial areas,” said Rajeev B. Batra, Executive Director of KPMG.

India has over 454 airfields, of which 138 are operated by the military, 158 by the State governments, 61 owned and maintained by private owners or estates and the rest are managed and operated by the public sector Airport Authority of India (AAI), the study says.

It said that a new urban infrastructure form, ‘Aerotropolis,’ is on the anvil. An aerotropolis is a cluster of aviation-oriented businesses around airports and transportation corridors emerging from them. Aerotropolis has an ‘airport city’ as its core, which comprises retail malls, leisure, and culture centres, logistics and air cargo, hotels and entertainment and is surrounded by clusters of aviation-related enterprise.

Passenger traffic

Despite the ongoing slowdown and a dip in passenger growth, the study said that once oil prices stabilised, in the long run the passenger traffic will continue to maintain its momentum.

For airports, an increase in passenger traffic implies an increase in its aeronautical revenues via the charges levied on the airlines and the potential for an increase in the non-aeronautical revenues through the retail segment.

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