Abstract
This Frost & Sullivan research service titled Strategic Opportunities in the
Indian Airport Infrastructure Market provides an overview of the various
aspects of developing Indian Airport infrastructure, opportunities, drivers
and restraints, government view point and recommendations. The study examines
issues surrounding airport development and modernization in India.
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Market Overview
Indian Airport Infrastructure Offers a Long Term Reward Avenue for Private Participants
Airport infrastructure development in India has thrived in the wake of
emerging business places, increased scope for connectivity, and new operating
models of airlines, government initiatives, and the dynamic growth of tourism.
Airport infrastructure is witnessing improvisation and expansion on a massive
scale, with the Government avidly supporting private participants in all the
Greenfield projects. Trends indicate that the long-term prospects for both the
private participants and the country are attractive. "The investment in Indian
airport infrastructure market, especially in the Greenfield projects will
almost increase two fold in the next 5-7 years addressing the need and
financial gaps," notes the analyst of this research service. "The planned
investment in airport infrastructure is estimated to be INR 400,000 million."
There are at least seven Greenfield airports in the country that are poised to
attract traffic in terms of both domestic and international passengers and
aircraft movement.
The primary challenges that face the market are finance and the identification
of key geographical areas. Funding for the airport development projects
encompasses equity from loans, government grants, investors, the Airport
Authority of India (AAI) and consortium partners, all of which will be
invested in the project in a phased manner to accommodate planned expansions.
Funding can be purely private or public private; however, Greenfield projects
have remained public private alliances. "The Committee on Infrastructure
expects the total investment towards airport development during the next 5
years to be INR 400,000 million, of which close to INR 310,000 million is
expected to come through public private partnerships (PPPs)," explains the
analyst. "International investors and airport companies have evinced interest
in the past, during the bidding stages of the Greenfield airports, and many
such companies are consortium partners in the current airport development
projects." Land acquisition can also contribute to delays and thereby extend
the gestation period of projects. The gap between developmental needs and
funding is wide, posing limitations on the ability of the government to
satisfy growth. Long-term sustainability of the airports in terms of funding
is an issue for the government. Factors including the lack of indigenous
technical and administrative expertise are perceived as the prime reason for
poor planning and management.
Nonetheless, the Government continues to encourage private participants by
providing assistance in terms of tax holidays and land for construction.
Planning committees and steering boards have been set up to expedite the
progression of projects and policies connected with the development of airport
infrastructure. Observation of air traffic, cargo movement and passenger
movement across the main airports in the country suggests that the development
of alternative airports will help ease congestion at the existing airports,
and increase connectivity. During the past five years, the rates of growth for
air traffic, cargo and passenger movement have been more than 15 percent,
which bodes well for the market. Going ahead, though the current scenario in
aviation is slightly on the lower side, one can expect to see some positives
growth trends provided one sees a horizon of 5-7 years from now.
Table of Contents
1. Executive Summary
2. Industry Overview
- 2.1 Origin of Aviation in India - A Snapshot
- 2.2 Significance of Investment for the Sector
3. Key Trends
- 3.1 Trends
- I. Traffic
- II. Investment
- III. Revenue
- IV. Conventions
- 3.2 Traffic Trends
- I. Past Passenger Growth
- II. Past Cargo Growth
- III. Projected passenger Growth
- IV. Projected Aircraft Movement
- V. Projected Cargo Growth
- 3.3 Airports Capacity
- I. Current and Projected Capacity at Custom and Domestic Airports
- II. Current and Projected Domestic capacity at Domestic Airports
- III. Current and Projected International capacity at International
Airports
4. Airport Financing
- 4.1 Development Allocation Break up
- 4.2 Task Force Commendations
- 4.3 CoI Commendations
- 4.4 Public and Private Investments
- 4.5 Critical Financial Perspectives
5. Market Scenario
- 5.1 Scope of Privatization
- 5.2 Drivers and Restraints
- 5.3 Regulatory bodies
- 5.4 Scenario on Airport Development
- I. Key aspects for development
- II. Investor Proposal Overview
- 5.5 Clearances and Agreements
- 5.6 Policy Implications
- I. Joint Ventures
- II. Ownership and Management
- III. Private Sector Participation
- IV. Greenfield Projects Overview
- V.PPP Model
- VI. Selection Criteria
- VII. Evaluation Criteria
6. Airports in India
- 6.1 Greenfield Airports
- 6.2 Snapshot of BIAL
- 6.3 Snapshot of HIAL
- 6.4 Hyderabad Airport - A Case Study
- I. Bid, Agenda, Ideas, Structure and Splits
- II. Concession Agreement
- III. Concessions
- 6.5 Foreign Share Holding
- 6.6 Brownfield Airports
- 6.7 Snapshot Delhi and Mumbai Airports
- 6.8 Non-Metro Airports
- 6.9 Airport Companies
7. Airport Infrastructure - A Business
- 7.1 Aerotropolis
- I. Concept
- II. Factors
- III. Drivers and Restraints
- 7.2 Airport Infrastructure Model
- 7.3 Airport Business - Entry Models
- 7.4 Indian Airport Business Model
- 7.5 Revenue Patterns
8. Conclusions and Recommendations
- 8.1 Non-Metro Airports
- 8.2 Greenfield Opportunities
- 8.3 Returns on Airport Infrastructure
- 8.4 Entry Model
- 8.5 Recommended Model
- 8.6 Risks and Challenges
- 8.7 Airports Operating Model
- 8.8 Airport Allied Infrastructure Entities
