Aviation is a critical component of the nation’s transportation sector and plays a pivotal role in economic growth and employment generation. The Covid-19 pandemic has severely impacted the sector. Yet, factors such as high demand, upbeat private investment in airports and opening up of regional airports are expected to provide a stimulus for the recovery of the sector.
Indian Infrastructure takes a look at the key recent developments in the sector…
- In July 2021, the Lok Sabha passed the Airports Economic Regulatory Authority (AERA) Amendment Bill with the aim of pairing smaller non-profitable airports with profitable airports as a combination/package for bidders, to make it a viable combination for investment in public-private partnership mode. The amendment will also allow the AERA to regulate tariffs and other charges for aeronautical services at not just major airports (with annual passenger traffic of over 3.5 million), but also a group of airports simultaneously.
- On July 5, 2021, the central government allowed airlines to marginally increase domestic flights from 50 per cent of pre-Covid numbers to 65 per cent. The government, which had previously allowed airlines to go up to 80 per cent of the total pre-Covid capacity of about 3,000 flights daily, had reduced it to 50 per cent from June 1, 2021.
- The Ministry of Civil Aviation (MoCA) has also announced the updated list of Vande Bharat international evacuation flights until October 31, 2021. As a part of Vande Bharat Mission Phase II, international flights resumed services from June 2, 2021 onwards. According to official data, a total of 3,829,600 passengers have been flown under these missions on almost 30,000 flights as of August 2, 2021.
- Under the Regional Connectivity Scheme (RCS), 57 unserved and underserved airports (including five heliports and two water aerodromes) with 347 routes have been operationalised till date. As of now, India has air bubble arrangements with 28 countries from across the globe. An air bubble is a bilateral arrangement with a set of regulations and restrictions, specifying an area in which the carriers of the two countries can operate international flights.
- MoCA has formed three advisory groups comprising airlines, airport operators, cargo carriers, ground handling companies, flying training organisations, and maintenance, repair and overhaul (MRO) companies, to deliberate on and resolve the challenges faced by the aviation sector. The airports group will include MoCA, the minister of state, the ministry secretary, the director generals of civil aviation and the Bureau of Civil Aviation Security, the chairpersons of the AERA and the Airports Authority of India (AAI), the GMR Group chairman, the Adani Group vice-president, and the Bengaluru airport managing director and chief executive. The MRO group will consist of senior government officials and industry officials from their respective fields.
Boost to airport infrastructure
- AAI recently completed runway resurfacing at the Tiruchirappalli International Airport. The work was taken up after a gap of 10 years in July 2020 at the height of the Covid-19 pandemic, and was carried out on the entire stretch of the existing runway, which has a total length of 2,424 metres and a width of 60 metres. Nearly 60 per cent of the construction work of the integrated passenger terminal building and about 65 per cent of the parallel taxiway work have also been completed.
- Rupsi airport in Dhubri district of Assam became operational on May 8, 2021. The trial run was completed in a timely and safe manner on May 5, 2021, with extended support from the Assam government and concerned agencies. The airport has been developed under the RCS.
- In January 2021, AAI’s subsidiary launched a new international air cargo terminal at the Devi Ahilya Bai Holkar Airport in Indore at a cost of Rs 22.6 million. The cargo facility is equipped with modern X-ray machines and security gadgets. It will boost the export of medicines, leather products, machinery, diamonds and other jewellery, auto parts, and fruits and vegetables.
- According to reports, work has been awarded for the implementation of a biometric boarding system using facial recognition technology at six airports – Bengaluru, Hyderabad, Kolkata, Pune, Varanasi and Vijayawada. The project is currently at the trial stage.
- In July 2021, the Hyderabad International Airport augmented its runway capacity by commissioning four new rapid exit taxiways (RETs). These RETs have been designed to allow aircraft to taxi off the runway at a relatively shorter distance and hence reduce runway occupancy time, thereby increasing runway capacity. The airport has also successfully commissioned its primary runway after major rehabilitation works, which will increase the pavement classification number and friction values of the runway. This will enhance the safety of aircraft. The airport has converted 98 per cent of its airside lighting (airfield signage, taxiway centreline lights, runway lights) to energy efficient LED lighting, which will save considerable energy and reduce carbon emissions.
- On August 10, 2021, Yamuna International Airport Private Limited (YIAPL) signed financing agreements with the State Bank of India and Noida International Airport Limited. The signing of the contracts marks the financial closure of the Noida international airport project at Jewar and construction is expected to begin soon. Also, recently, the Uttar Pradesh government handed over 1,334 hectares to YIAPL for the project. The airport is likely to start operations in 2024 with two runways, which will eventually expand to five.
- In June 2021, the GVK Group unveiled the design of the upcoming Navi Mumbai International Airport in Maharashtra. Land acquisition for the airport, which will come up on 1,160 hectares, is already complete, and the first phase of the airport is expected to be completed in 2023-24.
- In March 2021, the Goa government reported that the first phase of the Mopa International Airport in North Goa will be commissioned in August 2022 and that 23.55 per cent of physical work on the project has been completed. Construction of the runways, taxiways, passenger terminal building, ATC tower, administration building, and compound wall, among other infrastructure, is underway. Court clearances and the Covid-19 pandemic had led to delays in implementation of the project. In June 2021, Vishvprabha Ventures Limited received a letter of award for the construction of access chambers to enable mechanical, electrical, plumbing, and fire protection services and associated civil works at the airport.
Airport privatisation is one area that continued to gain steam even amidst the disruptions.
- The Adani Group has been allowed a three-month extension to take over the airports at Jaipur, Guwahati and Thiruvananthapuram. The group had asked AAI for a six-month extension till December 2021, citing force majeure owing to the Covid-19 pandemic. AAI will continue to receive revenues from these airports till they are handed over to the concessionaire, the Adani Group. The concession agreements for the Jaipur, Guwahati and Thiruvananthapuram airports were signed between the two parties in September 2020. Meanwhile, AAI handed over the Mangaluru and Lucknow airports to the Adani Group on lease for a period of 50 years on the midnight of October 30, 2020 and the midnight of November 1, 2020 respectively.
- The disinvestment of the cash-strapped Air India is likely to happen by end 2021. Due to the ongoing pandemic, bidders are unable to travel for physical meetings and the formalities that need to be done before Air India is privatised.
- In July 2021, AAHL took over management control of Mumbai International Airport Limited (MIAL) from the GVK Group to become the country’s largest airport infrastructure company. With this takeover, AAHL, a wholly owned subsidiary of multinational conglomerate Adani Enterprises Limited, now accounts for 25 per cent of airport passenger traffic with a total of eight airports in its management and development portfolio. It will also gain control of 33 per cent of the country’s air cargo traffic.
- In February 2021, the Adani Group completed the purchase of 23.5 per cent stake in MIAL from Bidvest and Airports Company South Africa (ACSA). Adani acquired 13.5 per cent stake from Bidvest and 10 per cent stake from ACSA for a consideration of Rs 1,685 billion. Adani will get a controlling stake in MIAL upon conversion of the debt to equity. In January 2021, AAI had given its approval to the Adani Group for the acquisition of the GVK Group’s 50.5 per cent stake in MIAL. A few other government approvals are pending.
- AAI’s key focus areas are development of cargo terminals and provision of MRO services. It aims to achieve about 10 million tonnes of cargo handling capacity by 2026-27. Air cargo can play a major role in boosting the economy and creating employment opportunities.
- Cargo services were launched at Dibrugarh airport on August 3, 2021. All the four scheduled airlines operating from Dibrugarh airport – Air India, Indigo, Vistara and Flybig – will provide the services. The combined capacity of all the airlines for daily movement is close to 10 tonnes per day.
- Domestic operations at the new integrated cargo terminal of Jaipur airport started on June 1, 2021. The cargo terminal, which is spread across an area of 13,000 square metre, has been constructed at a cost of Rs 0.21 billion. The terminal will also start international operations once the pandemic situation improves.
- In May 2021, Blue Dart, a leading express logistics service provider, formed Blue Dart Med-Express Consortium with the mission of revolutionising the delivery of vaccines and emergency medical supplies to the remotest parts of India using drones. Blue Dart Med-Express Consortium is part of the “Medicine from the Sky” project, and will be executed in collaboration with the Telangana government, the World Economic Forum, NITI Aayog and Healthnet Global. MoCA has granted the project the necessary exemptions and rights to fly drones on an experimental basis in Telangana.
The International Air Transport Association has suggested that the Government of India should take data-driven decisions and remove regulations that restrict capacity and access, to allow the aviation industry to recover quickly.