Tuesday, January 4, 2011

Capacity Overload

Aviation Week & Space Technology Jan 03 , 2011 , p. 39

Neelam MathewsNew Delhi

India plans new $2-billion international hub in Mumbai

India’s commercial capital, Mumbai, is set to see a second international airport with a $2-billion price tag, as the city’s international hub is so overcrowded that carriers are shifting flights elsewhere, especially to New Delhi.

In the past year alone, infrastructure and space constraints forced the civil aviation ministry to refuse permission to airlines from Bahrain, Dubai, Qatar, Oman, Singapore, Malaysia and Thailand to start operations in Mumbai, home to 18 million residents.

Long the nation’s busiest hub, Mumbai lost that title to New Delhi in 2008. As the new year dawns, New Delhi will handle 96 more flights per day than Mumbai as major airlines, including Air India, shift to the capital city’s better facility. Both Mumbai airports will offer domestic and international services, after the new one opens.

Overcrowding has been so severe at Mumbai International that the city is losing traffic to New Delhi. A new airport is slated to open in 2015.Credit: JOEPRIESAVIATION.NET
“The new Mumbai airport should have been running by now,” says Civil Aviation Minister Praful Patel. As he contemplates the damage to Mumbai’s tourism and business economy, he says the new facility should be running by 2015. If it isn’t, he expects severe consequences for the country’s financial center.

A greenfield airport has been selected in Navi (New) Mumbai, a suburb 50 km (30 mi.) southeast of the city center. The 1,405-hectare (3,471-acre) site is to have two runways and be built in four stages. It is expected to handle 10 million passengers initially, doubling to 20 million in eight years and 40 million by 2030.

Construction is slated to start in October, according to lead developer City and Industrial Development Corp. (Cid­co). It will call for bids next month.

Political clearance has come after a three-year battle between the aviation and environmental ministries. Construction will require removing mangroves and a hill and diverting a river.

As with India’s other private airports, Navi Mumbai will be developed through public-private partnerships. The public company will hold 74% of the shares, while the government-owned Cidco and Airports Authority of India will have 13% each.

Observers are looking for developers to learn from past mistakes. Cost control is essential to avoid inflated airport fees later, says Kapil Kaul, an India-based analyst for Sydney’s Center for Asia Pacific Aviation. “Economic fitness is critical for investors to ensure returns are in tandem with cost logistics,” an airport official adds.

One aviation industry analyst would like to see foreign partners play a larger role in Navi Mumbai than they have on past airport projects in India. “Unfortunately, many airport owners think they can run airports by edging their partners out,” he says. “This does not help in bringing in professionalism.”
Despite glitzy private airports in India, critics say they lack functionality. They point to the absence of a true fixed base operator anywhere in the country and no low-cost terminals. This is surprising, since75% of all seats sold in India are by budget airline brands.

“In the next two years, Mumbai will have to look at a low-cost terminal, cargo logistics and general aviation,” says Kaul. “Also, given the track record of Mumbai’s [lack of infrastructure], it is essential that there is seamless road connectivity to the airport, which is currently lacking.”

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