Professional Documents
Culture Documents
APRIL 2017 (As of 21 April 2017) For updated information, please visit www.ibef.org 1
AIRPORTS
Executive Summary.3
Advantage India... 5
Market Overview & Trends........ 7
Porter Five Forces Analysis ...20
Strategies Adopted.. 22
Growth Drivers......... 24
Opportunities.....36
Success Stories.... 38
Useful Information.........................41
CAGR: 17.14%
421 By 2020, passenger traffic at
Third largest aviation market by Indian airports is expected to
2020 increase to 421 million from
223.61
223.61 million in 2016
2016 2020
2016E 2026F
APRIL 2017 Source: World Travel and Tourism Council, Airport Authority of India, TechSci Research 3
For updated information, please visit www.ibef.org
AIRPORTS
EXECUTIVE SUMMARY (2/2)
Source: World Travel and Tourism Council, Asian Development Bank, TechSci Research
ADVANTAGE INDIA
AIRPORTS
ADVANTAGE INDIA
Robust demand
FY2000
Growing
Rising working group & demand
widening middle
Opportunities in MRO FY2020E
class demography is expected to boost Growth in aviation accentuating
demand demand for MRO facilities
No of India plans to increase the number of No of
operational airports to 250 by 2030 to cater to growing Expenditure in MRO accounts for 13- operational
airports: 50 leisure & business travel 15 per cent of total revenues; it is the airports: 95
Freight traffic also likely to go up as trade second-highest expense after fuel cost
with the rest of the world increases
By 2020, the MRO industry is likely to
grow over USD1.5 billion from USD0.5
billion currently
Advantage
India Policy support
Increasing investments
Investments totaling USD12.1 billion in The government has been encouraging
the airport sector are likely to be made private sector participation
during the 12th Five Year Plan (2012-17);
of these, private investments are Foreign investment up to 49 per cent is
expected to total USD9.3 billion allowed under automatic route in
scheduled air transport service, regional
Growing private sector participation air transport service & domestic
through the Public - Private Partnership scheduled passenger airline.
(PPP) route
Non-scheduled airlines in
39 121 (FY16)
operation
Airports and
airstrips in India Customs airports
Operational (90) (7)
(464)
Non-AAI airports
& airstrips (339)
Civil enclaves International (17)
(26)
94.00%
92.00%
Spicejet
Market share: 12.8%
Passenger Load Factor
88.00%
Air India
Market share: 15.3%
86.00% Passenger load traffic: 84.7%
Indigo
GoAir Market share: 38.6%
Market share: 8.3% Passenger load traffic: 87.2%
84.00%
Passenger load traffic: 88.6%
Jetlite
82.00% Market share: 3%
Passenger load traffic: 80.9% Jet Airways
Market share: 16%
Passenger load traffic: 82.6%
80.00%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Market Share
Note: Market Share as on May16 and Load Data for the month of May16
as published by Directorate General of Civil Aviation
APRIL 2017 For updated information, please visit www.ibef.org 10
AIRPORTS
THE SIX MAJOR AIRPORTS IN THE COUNTRY
Delhi
Passenger traffic handled in
FY16: 48 million;
FY171: 52,5 million
Kolkata
Passenger traffic handled in
FY16: 12.4 million;
FY171: 14.35 million
Mumbai
Passenger traffic handled in;
FY16: 41.7 million;
FY171: 41.4 million
Hyderabad
Passenger traffic handled in
FY16: 12.4 million
Bengaluru FY171: 13.79 million
Passenger traffic handled in
FY16: 19 million;
FY171: 21.1 million
Chennai
Passenger traffic handled in
FY16: 15.2 million;
FY171: 16.7 million
Witnessing a growth of 17.62 per cent over the previous Passenger traffic in FY16 (million)
year, total passenger traffic stood at a 223.6 million in
FY16, which was recorded at 190.1 million in FY15 in 250 35.00%
India. 30.00%
200 25.00%
Growth in passenger traffic has been strong since the
new millennium, especially with rising incomes & low- 20.00%
150
cost aviation; during FY06-16, passenger traffic grew at a 15.00%
CAGR of 11.8 per cent in the country. 10.00%
100
5.00%
116.87
108.88
123.76
143.43
162.31
169.03
50 0.00%
73.35
96.49
159.4
190.1
223.6
-5.00%
0 -10.00%
FY06FY07FY08FY09FY10FY11FY12FY13FY14FY15FY16
Source: Association of Private Airport Operator, Airports Authority of India, TechSci Research,
Notes: CAGR Compound Annual Growth Rate,
FY Indian Financial Year (April March)
187.84
160
168.89
February 2017, in comparison 21.24 per cent in FY16. 140 30.00%
139.3
122.41
International passenger traffic registered growth at a CAGR of 120
121.51
116.97
20.00%
105.52
8.33 per cent over FY06-17. 100
89.39
10.00%
87.06
80
77.3
During February 2017, domestic airlines carried over 8.23 million
70.62
passengers, showing a growth of more than 23 per cent compared 60
22.37 50.98
0.00%
to the same period last year. 40
54.72
54.14
46.62
50.8
43.03
37.91
-10.00%
34.37
40.8
31.58
29.81
25.87
20
Growth in passenger traffic set to remain strong in future 0 -20.00%
1
12th Plan Period
60
International Domestic
41
10th Plan Period
209 During FY17, domestic passenger traffic increased by
26
122 22 per cent in comparison with growth rate of 21.24
14 71 per cent in FY16.
26 During FY16, international passenger traffic increased
FY02 FY07 FY12 FY17E by 7.72 per cent
International Passenger Throughput International (million) Source: Airports Authority of India, Ministry of Civil Aviation, TechSci Research
Notes: YoY Year on Year, FY Indian Financial Year (April March)
Domestic Passenger Throughput Domestic (million) 1Data for April 2016 February 2017
Total freight traffic registered a CAGR of 6.8 per cent over International freight traffic was 61.3 per cent of
FY06-16 the total in 2016
1045.92
20.00%
In FY16, domestic freight traffic stood at 1045.92 million
2000
852
812
tonnes, while international freight traffic was at 1658.35
840
15.00%
784
986
689
million tonnes.
1500 10.00%
568
552
530
484
During FY16, domestic freight traffic increased at 6.08 per
1468
5.00%
1407
cent while international freight traffic increased at 7.55 per 1000
1658.35
1542
1496
cent in comparison with FY15. 0.00%
1271
1147
1023
1440
920
500
1149
-5.00%
By 2023, total freight traffic is expected to touch 4.14 million
tonnes exhibiting growth at a CAGR of 7.27 per cent 0 -10.00%
between FY2016 & FY23. In addition, international freight
traffic is expected to grow at a CAGR of 7.13 per cent while
domestic freight traffic is expected to grow at a CAGR 7.50
per cent between FY2016 and FY23. International('000 Tonnes) Domestic ('000 Tonnes)
Growth-International(%) Growth-Domestic(%)
2.68
2.7
2.53
2.35
Growth in import & export in India will be the key driver for
2.28
2.28
2.19
growth in freight traffic as 30 per cent of total trade is
1.96
undertaken via airways
1.72
1.7
1.55
1.4
Airports across the globe are planning on increasing their
spending on new technology to keep up with surging
passenger traffic, which is expected to double to 370
million by 2020. The anticipated double digit growth would
make India as the worlds 3rd largest aviation market by
2020.
1.08
1.31
1.31
1.33
1.39
1.54
1.48
1.54
1.79
1.86
0.2
1.6
-10.00% 0
1
1502.41
1481.28
In FY17, domestic aircraft movement increased at
10.00% 1200
a YoY of 1.43 per cent, while international aircraft
1260
1201
1235
1000
1165
1094
movement declined at a YoY of 0.68 per cent, in
1049
1036
1059
5.00% 800
comparison to FY16.
862
0.00% 600
400
375.33
365.23
During FY17, the total number of domestic aircraft -5.00%
346
336
314
309
300
200
282
270
249
216
movement increased to 1.86 million, as compared
-10.00% 0
to FY16 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1
Post liberalisation, private sector participation in the sector has been increasing
Private sector investment is expected to increase to USD9.3 billion during the 12th Five Year Plan from USD5.5 billion in
the previous plan
Source: DGCA
Note: FY Indian Financial Year (April March)
NSOP Non Schedule Operators Permit
APRIL 2017 For updated information, please visit www.ibef.org 19
AIRPORTS
Competitive Rivalry1
Competition among major players is very high, especially in LCCs (Low cost
carrier) section because the airlines compete for the middle income group
customers and passengers of air-conditioning segment of railways. This group Threat of New
has low brand loyalty & is highly price sensitive Entrants
Competition might intensify further in LCC segment with Air Asia India being (Low)
granted DGCAs operator license
Threat remains low because of the Threat remains low in this sector Bargaining Competitive
nature of the industry (Regulatory Substitute
also as no other means of Power of Rivalry Products
hurdles, Capital-intensive) transport is as swift & convenient Customers (High) (Low)
Air Asia India has been granted as airlines (Low)
DGCA approval (Price War) It saves time
Air Asia started services to
Bagdogra & Srinagar from Delhi.
STRATEGIES ADOPTED
AIRPORTS
STRATEGIES ADOPTED1
Expansion of CAPA; further, rise of LCCs was also supported by the exit of Kingfisher, which is on the verge of
insolvency
Capacity will also increase with new terminals coming up in Mumbai, Bengaluru, Chennai & Kolkata
Expansion Indian carriers to double their fleet capacity by 2020 to around 800 aircrafts
To fund 4 Boeing 787 aircrafts, Air India is planning to raise short term loans worth USD470 million in the period July &
October 2017.
Indian LCCS are looking forward to increase their ancillary services, without tampering their business models. This
includes services like lounge access, priority boarding, customer loyalty memberships & customer meals
The Airports Authority of India (AAI), has allowed the city & the BRTS buses to foray in the airport premises in Surat.
Ancillary This initiative will allow the passengers to reach airports on time, in accordance with their flight schedules & allow
services smoother transit.
Both Indigo & GoAir are eyeing a larger share of corporate market
On April 9, 2017, Indigo Airlines entered the record books by registering a record breaking 900 flights a day, most by
any Indian Airline.
Indian LCCs are looking forward to increase their low cost products on routes which will take up to 4 hours (shorter
international routes)
Increasing This will allow deleveraging of domestic fleet, increasing aircraft utilisation & improving commercial performance
Chennai, with its strategic location in South India has a strong potential to become a hub, with connecting flights to
operations
Gulf & across South East Asia
Indigo, one of the largest airlines in India, has announced Sharjah as its 6th international destination. From March
2017, the airline plans to operate its daily non-stop flights between Kozhikode and Sharjah.
NIAMAR (National Institute of Aviation Management & Research) has been developed to bridge the supply gap of
aviation personnel
4 new greenfield airport projects are coming up in the smaller towns of Andhra Pradesh & Telangana, as part of
India's overall aim to improve airport infrastructure & regional connectivity in the country.
Governments As on October 2016, government has launched regional connectivity scheme named UDAN (Ude Desh ka Aam
push Nagrik) to make flying affordable for common man
Under Regional Connectivity Scheme (RCS), the government plans to increase the total number of operational
airports in India from 75 to 118
For improving the regional air connectivity, the government received as many as 45 initial proposals from 11 bidders,
under the scheme UDAN. In this scheme, the government has proposed to cap the fares of 1 hour flights at US$37.18
The government has approved to revive 50 airports which are being under served or un-served in 2017-18. The
estimated project cost is USD669.34 million, which will enhance the connectivity of small cities/towns & boost
economic development
APRIL 2017 Source: Central Asia-Pacific Aviation, TechSci Research For updated information, please visit www.ibef.org 23
Note: 1 Notes w.r.t airlines, LCC Low Cost Carrier
AIRPORTS
GROWTH DRIVERS
AIRPORTS
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS
Increasing
Growing
Growing demand
demand Policy support
Strong investments
government
support
AAI driving large
Greater modernisation,
Expanding middle
government focus development
income group and
on infrastructure projects; expansion
working population
and upgradation of
existing airports;
Inviting Resulting in development of
Rising domestic low-cost airports
Increasing
and foreign
liberalisation, Open
tourists and Increasing private
Sky Policy
travellers sector
participation,
increasing
greenfield projects
Strong growth in Policy sops, FDI
external trade encouragement Strong projected
demand making
returns attractive
3,227
3,587
3,748
4,041
4,445
4,749
5,003
5,352
5,758
6,162
6,599
2,000
(1564 years), at 65.7 per cent of the total population 2.00%
1,000
currently, is expected to grow; this indicates the 0 0.00%
employee base and the frequency of business travel
are expected to increase
181.65
180
Successful ad campaigns abroad
160
The share of travel & tourism in Indias GDP is likely to 140
96.01
90.16
96.2
depict YoY growth of over 15 per cent per cent in 120
77.87
2017E; and is expected to grow at a CAGR of 7.2 per 100
69.3
68.7
60.9
cent per annum between 2017E-2027 80
48.7
46.2
42.1
60
26.4
17.78
25.5
24.4
22.3
22.1
20.8
19.1
19.1
18.8
10.36
40
Growing travel & tourism spending 20
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E
India is one of the fastest growing economies
Business Travel and Tourism Spending (in USD Bn)
Overall, Leisure travel & tourism spending inclined at a
Leisure Travel & Tourism Spending (in USD Bn)
CAGR of 15.74 per cent between 2007-17E.
Emergence of business hubs like Mumbai (Finance), Source: World Travel and Tourism Council,
Make in India, Global Business Travel Association, TechSci Research
Bengaluru (IT), Chennai (IT), Delhi (Manufacturing, IT) Notes: IT Information Technology, E Estimated
is likely to boost business travel as well.
Leisure travel spending grew to USD181.65 billion in
2017E from USD96.20 billion in 2016.
Growing trade benefits of freight movement Rising exports and imports (USD billion)
489.32
490.74
Over FY09-16, 600
447.52
450.2
380.60
369.77
Indias exports expanded at a CAGR of 5.08 500
314.41
309.56
305.96
303.69
per cent to USD262.03 billion in FY16.
288.37
300.4
262.03
400
249.82
Imports registered a CAGR of 3.28 per cent
185.29
178.75
which reached to USD380.60 billion in FY16 300
0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
FDI in aviation and
Increasing airline Exports Imports
liberalised aviation
operators
policy
Source: Ministry of Commerce, TechSci Research
Notes: CAGR Compound Annual Growth Rate,
FY Indian Financial Year (April March)
Higher aircraft
movement
Growth in passenger
Rise in freight traffic
traffic
With the opening of the airport sector to private participation, 6 airports across major cities
are being developed under the PPP model
Currently, 60 per cent of airport traffic is handled under the PPP model, while the
Liberalisation, Open remaining 40 per cent is managed by the AAI
Sky Policy
Increased traffic rights under bilateral agreements with foreign countries
India has signed its 1st open skies agreement with Greece
The GOI has allowed 100 per cent FDI under automatic route for greenfield projects,
whereas, 74 per cent FDI is allowed under automatic route for brownfield projects.
100 per cent FDI is allowed under automatic route in scheduled air transport service,
Encouragement to FDI regional air transport service & domestic scheduled passenger airline, however, FDI over
49 per cent would require government approval.
Approval of 49 per cent FDI in aviation for foreign carriers.
Notes: India currently has bilateral air service agreements with 104 countries. These include Brazil, 27 members of the EU, and
China. In 2008 traffic rights were been enhanced with Mexico, Saudi Arabia, Netherlands, Qatar, Iran, Japan and Turkey,
FDI Foreign Direct Investment, GOI Government of India
100 per cent tax exemption for airport projects for a period of 10 years
Taxes and duties
Indian aircraft Manufacture, Repair & Overhaul (MRO) service providers are exempted
completely from customs & countervailing duties
In the Union Budget for FY17, Government of India, for the purpose of equity infusion has
earmarked USD255.86 million for Air India Limited.
Also, a budget of about USD14.98 million has been allocated to Airports Authority of India,
Budgetary support of which USD4.29 million has been attributed towards Pakyong, Sikkim project.
The government has planned to allocate a sum of USD11.80 million to Directorate
General of Civil Aviation to implement various schemes.
The government has also supported the Bureau of Civil Aviation Security with USD9.71
million to meet their expenditure.
The AAI aims to bring around 250 airports under operation across the country by 2020
Metro airports
The AAI has developed & upgraded over 23 metro airports in the last 5 years
The Airports Authority of India (AAI) is planning to spend USD1.3 billion on non-metro
projects over the 5 years (201317); it is mainly focusing on the modernisation & up
gradation of airports; New airports at Itanagar, Kohima & Gangtok are also planned
Upfront subsidy has been proposed through which non-metro airports would be funded by
imposing 2 per cent levy on both domestic & international airfares
Over 30 airport development projects are under progress across various regions in
Northeast India
AAI plans to develop over 20 airports in tier II & III cities in next 5 years
Northeast India
The AAI plans to develop Guwahati as an inter-regional hub & Agartala, Imphal &
Dibrugarh as intra-regional hubs
Bijapur Airport
Delhi PPP format likely to
(Modernisation, Terminal 3 continue
Terminal 3) construction in Shimoga Airport
Delhi completed in
Mumbai 2010 15 greenfield
(Modernisation) projects with Hassan Airport
Participation in private sector
international participation has
airport projects been approved
Terminal 3 - Total in May 2015 Gulbarga Airport
Hyderabad
cost
USD2.7 billion Mopa Airport, Navi
(including Terminal 3 Mumbai Airport, Shirdi
Bengaluru In May 2016,
and 1- D) and Sindhudurg
USD2.23 billion of Airports, Kannur and
investments were Aranmula Airports,
approved byAirports Durgapur Airport,
Authority of India Dabra Airport,
(AAI) for upgrading Pakyong Airport,
Indian airports, over Karaikal Airport and
a period of four Kushinagar Airport
years
Presently India has 5 PPP airports each at Mumbai, Delhi, Cochin, Hyderabad & Bengaluru, which together handle over 55
per cent of countrys air traffic.
Government of India has approved 15 greenfield PPP projects which are expected to increase the air traffic in India. These
projects would be setup in Goa, Navi Mumbai, Maharashtra, Bijapur, Gulbarga, Karnataka, Kerala, West Bengal, Madhya
Pradesh, Sikkim, Puducherry & Uttar Pradesh.
Type of project/
Name of airport Operator Revenue sharing
PPP structure
Chhatrapati Shivaji Mumbai International Airport Ltd 38.7 per cent of gross revenue to be
Brownfield/BOOT
International Airport (MIAL) shared with AAI
Indira Gandhi Delhi International Airport Ltd 45.9 per cent of gross revenue to be
Brownfield/BOOT
International Airport (DIAL) shared with AAI
OPPORTUNITIES
AIRPORTS
OPPORTUNITIES
The Indian Aviation sector likely to The Indian Aviation Industry aims to Airport developers can now
see investments totalling USD12.1 boost MRO business in India, which draw on wider revenue
billion during the 12th Five Year is worth US500 million as of FY2016 opportunities such as retail,
Plan and is estimated to grow over US1.5 advertising & vehicle parking
billion by 2020
Of the total investment, USD9.3 Future operators will benefit
billion is expected to come from the Indian airline companies spend over from greater operational
private sector 1315 per cent of their revenues on efficiency due to satellite
maintenance, which is the 2nd based navigation systems like
Success of PPP formats will raise highest cost component after fuel Project Gagan which is in
investment in existing & greenfield development phase
airports Inauguration of MRO facility at
Hyderabad in May 29, 2015 by Air
Private sector participation in 6 India Engineering Services Limited
existing airports operated by AAI is (AIESL) which is a 100 per cent
likely to increase investment owned subsidiary of Air India
opportunities for airport sector
Notes: Project Gagan is directed towards transitioning from a ground-based navigation system to a satellite-based one. AAI and ISRO are
jointly working on this. A Space Based Augmentation System (SABS) will be operational by 2013,
MRO Maintenance, Repair and Overhaul
SUCCESS STORIES
AIRPORTS
IGI AIRPORT, DELHI - A COMPELLING SUCCESS STORY
Awarded at the Skytrax World Airport Awards 2015 for the Best Airport in Central Asia region & for the Best Airport Staff.
Also, they were felicitated with the prestigious Golden Peacock National Quality Award 2015 for their continuous efforts in
building a culture across IGI Airport
IGI airport ranked 1st at the ACI Annual Service Quality Awards in 2016, across the globe (category: handling 25-40 million
passengers), up from 2nd position in 2012.
Delhi International Airport Ltd became the 1st in the world to receive the ISO 22301:2012 certification for its robust business
continuity management system
Delhi International Airport Ltd is also Indias 1st airport to cross 5 crore passenger mark, in 2016.
Phase I Final
Facts and features
Passenger Traffic: 48.4 mn (FY16) Passenger handling 100 million (by 2020)
34 million
capacity per annum (60 million as on October
Aircraft movement: 0.34 mn (FY16) 2013)
Cargo: 0.79 mn tonnes (FY16) Area (acres) 1,907
5,106
Terminal 3
Retail space: 0.2 mn sq feet
Operational status Completed on Mar-2010
Ongoing 20-year project
Apron area: 6.7 mn sq feet
Multi level car park: 4,300 cars/day Phase 1 of modernisation of IGI International Airport (at a cost of INR86 billion) involved
(mn: million; sq: square) renovation of terminals 1A, 1B, 1C & Terminal 2. It also included construction of a new
domestic terminal along with an integrated passenger terminal (Terminal 3)
Source: Delhi International Airport Ltd, Association of Private Airport Operators,
Airports Authority of India, TechSci Research;
Note: ACI Airports Council International , mn - Million
APRIL 2017 For updated information, please visit www.ibef.org 39
AIRPORTS
CSI INTERNATIONAL AIRPORT, MUMBAI - HARNESSING THE POWER OF PPP
During the World Travel Awards, 2015, CSI International Airport, Mumbais GVK Lounge at Terminal 2 has been felicitated
with Asias Leading Airport Lounge Award. Also, the Architizer A+ Award for the Best Architectural Structures in the
World was bagged by CSI International Airport in the Transportation-Airports category, 2015
Plans to increase the handling capacity at the airport from 36 to 48 flights/hr & to increase the passenger capacity to 40
million annually
USEFUL INFORMATION
AIRPORTS
INDUSTRY ASSOCIATIONS
Purchasing Power Parity (used in calculating per-capita GDP slide 12, GROWTH DRIVERS)
Public Private Partnership (a type of joint venture between the public and private sectors)prop
Year INR equivalent of one USD Year INR equivalent of one USD
200405 44.81 2005 43.98
200506 44.14
2006 45.18
200607 45.14
2007 41.34
200708 40.27
2008 43.62
200809 46.14
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