Flying High: Transformation of the aviation sector over the past 20 years

Transformation of the aviation sector over the past 20 years

P.S. Nair, Chief Executive Officer, Corporate (Airports), GMR Group

The past 20 years have seen dramatic changes in many of India’s industries and service sectors, but nowhere was the change more dramatic than in the field of aviation infrastructure.

The level of change and improvement seen in our country’s airports over the past two decades has truly been transformative – be it in terms of size, scale of operations, level of traffic, quality of service or, most importantly, the overall experience offered to passengers and other end users.

Having started my career with the forerunner to what is today known as the Airports Authority of India (AAI) – the mainstay of India’s civil aviation sector – and later on having been a part of the planning, development and operationalisation of India’s first and iconic modern airport under the GMR-led public-private partnership (PPP) operator, I have had the unique privilege of having seen and experienced this transformation first hand.

1998 to 2008: The beginnings

The economic reforms initiated by the Government of India in the early 1990s had begun showing results by the mid-1990s, with sector after sector being slowly opened up to private sector participation; the aviation sector was no exception. A number of new private airlines took wing during this decade to meet the demand for air travel. Soon, the government realised that in order to support growth in the sector, aviation infrastructure needed to expand and improve significantly.

A pioneering effort towards the creation of new airport capacity was the Cochin international airport project, where Kerala, non-resident Keralites and the public at large took the plunge to create a new greenfield airport on a truly unique model. The same model has been replicated in the now nearing completion fourth international airport in Kerala, the Kannur international airport.

Projects to build brand new, world-class greenfield airports at Hyderabad and Bengaluru were the first large-scale efforts to get off the ground around the turn of the century. The central government initiated a process to select developers for what would be the first PPP airport concession for both cities.

As the millennium year was ushered in, the projects picked up pace and in the first half of the decade, both the Hyderabad and Bengaluru projects had been awarded to private developers through the PPP model – Hyderabad airport to a consortium led by the GMR Group with Malaysia Airports Holding as an 11 per cent stakeholder and Bengaluru to a consortium consisting of Siemens, Zurich Airport and Larsen & Toubro. At both  airports,  private players holding a 76 per cent stake were joined by the local state government and AAI as partners in the PPP venture, ensuring the right balance of focus between various developmental and operational priorities between the public and private partners.

Construction at both the airports began in 2005, and progress was brisk. Despite many challenges and obstacles along the way, the greenfield airports came up in record time and were commissioned by 2008, marking a paradigm shift in every aspect of how an airport in India was to be funded, designed, constructed and operated. Gone were the days of a “chalta hai” approach that had dogged large infrastructure projects in the country for so long, and “world-class” became the minimum acceptable standard in every respect. Sample this – we built the airport at Hyderabad to be able to handle the Airbus A380 from day one, although the plane was yet to enter commercial service anywhere in the world. The approach to manpower and expertise was similar – we brought in “subject matter experts” from other industries and even overseas when the desired expertise was not available locally. For specialised business areas such as cargo, duty-free and hospitality, we brought in the best players from around the globe as joint venture partners and helped incubate expertise locally in these businesses.

Around the same time, the government took the bold step of handing over the country’s two largest gateway airports at Delhi and Mumbai to private players, with a GMR-led consortium taking over Delhi airport and Mumbai airport being handed over to a consortium led by GVK. These projects being brownfield endeavours involving the expansion and improvement of existing airport facilities, posed a different set of challenges to the ones faced by the Hyderabad and Bengaluru airports which were greenfield ventures being built from scratch at new locations. Change management and engagement with the existing staff, unions and other stakeholders was a monumental challenge that had to be overcome jointly by both the government as well as the new private operators concurrently with the takeover of operations.

To sum up, in a short span of 10 years from 1998 to 2008, the face of Indian airports underwent a dramatic change, with the new PPP airports setting global benchmarks in everything from infrastructure and facilities to service quality and passenger experience.

2008 to 2018: Transformation takes root

With the benchmark for the airport and aviation sector having been set high by the new PPP airports, the stage was now set for the transformation to sweep through the sector in the entire country.

AAI initiated modernisation projects at the Chennai and Kolkata gateway airports and started a project to modernise 35 non-metro airports across the country, which would help lay the foundation for bringing the benefits of better aviation infrastructure to the far-flung hinterlands.

The year 2010 saw the landmark Terminal 3 (T3) of Delhi airport being commissioned, which was and still remains the largest airport terminal in the country and all of South Asia. Completed and commissioned in a record time of 37 months, T3 symbolised the mega ambitions and confidence of a new India. Built in time to welcome the world to the 2010 Commonwealth Games held at Delhi, T3 has become one of the indelible symbols of modern India.

The triumph of T3 was followed by the unveiling of Terminal 2 at Mumbai airport in 2014, which is widely considered to be one of the most beautiful terminals in the world today with its unique architecture as well as collection of art housed within the airport museum.

The success in launching world-class infrastructure was followed with truly world-class service offerings. The top Indian airports today are routinely in the global top five in Airport Service Quality rankings conferred by the Airports Council International, and are firmly entrenched in the company of airports such as Singapore, Changi, Hong Kong and Incheon.

Looking ahead

Having undergone a transformative journey over two decades, the aviation infrastructure sector in India stands at a crossroads today. While the building boom of the first decade of private participation helped fuel the expansion of the civil aviation sector to over 100 million annual passengers today, demand is beginning to exceed the available capacity across most airports in the country.

To be sure, both the government and private operators have initiated expansion plans for existing assets and the development of new greenfield projects us also under way. Given the ever-expanding air travel needs of the growing economy coupled with the government’s relentless focus on boosting connectivity to every nook and corner of the country through schemes such as the Regional Connectivity Scheme, it is imperative that investments are made in aviation infrastructure to help it cope with immediate as well as future demand.