Key Issues on Airport Modernization

• Current Scenario
• Recent Market Development
• Opportunities
• Present Growth
• Airport Development and Modernization
• Investor Considerations
• Privatization approach
 Current Scenario

• Civil aviation industry witnessing good times with an overall rise in

traffic.
• In 2005 – 06 air passenger traffic showed a rise of more than 23%
(from 59 million to 73 million)
• Total aircraft movements handled in 2005 – 06 registered an
increase of 16%
• Mumbai Traffic:18.4 million- Growth rate achieved in 2006: 17.5%
• Chennai Present traffic : 6.8 million - Growth rate achieved : 20%
• As per industry estimates, passenger traffic and cargo movement in
2006-07is expected to increase to 77 million and 1.40 million tonnes
respectively.
• India's economy is on the fulcrum of an ever increasing growth
curve.
• Rising foreign exchange reserves of close to US$ 160 billion
 Current Scenario

• India – government is seeking private, foreign investment to improve

and build airport facilities on a build – operate-transfer (BOT) basis.
• Represents significant opportunities for foreign based companies
with expertise in these technologies.
• GDP grew by 7.4 per cent in first quarter & 6.6 per cent in second
quarter of the current year
• Manufacturing and services sector have become a major driving
force for the Indian economy
• Infrastructure sectors like rail goods traffic, cargo handled at ports
and airports and air passenger traffic have recorded high growth
rates.
 Recent Market Development

• India’s 9th 5 year plan (1997-2002) focuses on expanding capcity in

passenger and cargo terminals at 5 international airports.
• Government planning to build over a dozen airports that meet
international standards
• Each airport requires upgrade worth approximately US $ 1 Billion for
a total investment of US $ 5 Billion. Once privatized, airports will
function independently of AAI.
 Opportunities

• Foreign based exporters exist in airport safety and security ,

navigation & communication engineering.
• Upgrading of ATC/ATS, aviation ground support facilities and safety
equipment.
• Facilitate private and foreign investment in airport development
sector.
• Establish a regulatory body to ensure investor confidence.
 Modernization
• Maximize existing capacity of terminals.
• Induction of latest security and frisking equipment.
• Improve baggage delivery system to reduce congestion and delay
on apron.
• Alternate proposal to call for revised master plan and rearranging of
facilities.
• Approach and departure guidance by AWOPS.
• Modernization of apron services.
• Correct imbalances between various corporations under its control
and avoid duplication of infrastructure
• Increase in FDI cap.
• Up gradation in production capacity, technology, transfer and
modernization of infrastructure.
Passenger Traffic Forecast in India
 Key Industrial Drivers

• Inbound tourism
• Low-cost carriers
• Cargo
• Outbound passenger travel
• Government policy and Regulation
• Inbound passenger travel
Airport Revenue Streams
 Investment Needs

Source: Report of the task force – Financing plan for the airports by the
secretariat for the committee on infrastructure.
Development Plan
 Bangalore International Airport Limited

• Greenfield airport at Devanahalli on a BOOT basis

• Expected operations in April 2008
• Shareholders include KSIIDC, AAI, Siemens Germany, Unique Zurich
Switzerland and L&T.

Hyderabad International Airport Limited

• Greenfield airport at Shamshabad on BOOT basis

• Expected operations in April 2008
• Shareholders include Govt. of Andhra Pradesh, GMR infrastructure,
Malaysian Airport Holding Berhard and AAI.
 Delhi International Airport

• Brownfield Airport Project awarded as PPP.

• Stakeholders – GMR group, Fraport AG, Malaysian Airport and AAI.
• Maintenance and Development agreement with AAI.

Mumbai International Airport

• Brownfield project awarded as PPP

• Stakeholders – GVK Group, Airports Company South Africa, BID services
(Mauritius) and AAI.
• Operations Maintenance and Development agreement with AAI
 Current Plans

• Non – metro Airports

• Phase – I (10 Airports)
• Phase – II (15 Airports)
• Phase – III ( 10 Airports)
Revenue Patterns of Airports in India
Privatization Approach
Airport Development Plan

•Brownfield Airport Projects

•Greenfield Airport Projects

• 1 Phase I
• 2 Phase II
• 3 Phase III
THANK YOU