Indian Aviation - Fragile Infrastructure

Aviation market of India is one of the least explored aviation markets in the world. However, a few significant factors unique to the Indian environment could determine the fate of

the new domestic carriers. Firstly, the price of Aviation Turbine Fuel (ATF), which accounts for approximately 30% of the operational costs, is disproportionately high in India. The situation has been addressed somewhat by lowering of excise duty on ATF recently but that is clearly not enough. Again, the landing and parking charges in India remain far higher than international rates in spite of being lowered to some extent recently. Although, the Govt has now given the green signal to an FDI hike to 49% in private Indian airlines from the present 40%, no direct or indirect equity participation by foreign airlines is still allowed. The high passenger traffic and the growing number of airlines and aircraft have already had an adverse impact on the existing aviation infrastructure. Airlines have been complaining of traffic congestion in the air, while landing and take off, besides lack of adequate parking and ground handling space at major airports. The four metro airports (Mumbai, Delhi, Chennai and Kolkata) which together account for 2/3 of total passenger traffic & 4/5 of cargo traffic are beginning to face capacity constraints. The projected increase in the number of aircraft and airlines flying from these airports will further strain the existing fragile infrastructure.

Some attempts are underway to modernize the existing metro airports and to create additional capacity. It is planned to substantially increase parking bays at the four metros in addition to creation of additional taxi tracks and installation of a vastly improved satellite navigation sys tem. Privatisation of the major airports (Mumbai and Delhi initially) is also on the anvil. Two new Greenfield airports are to be constructed at

Bangalore and Hyderabad. Expansion work is also under way at Vishakapatnam, Pune, Bhopal and Indore. Apart from this, the Airports Authority of India (AAI) has decided to modernise 30 non-metro airports to world class standards in phases. The remaining 50 odd airports will also be taken up for improvement. Domestic and foreign investors including NRls have been invited to participate in the development of infrastructure support at select airports. According to broad estimates, the total investment in the airports sector would be to the tune of Rs 40,000 crore (US$ 9 billion). "Unfortunately, we have been lagging behind in upgrading our ground infrastructure. The kind of investments that need to be made in airports could not be made in the last many years. We have now embarked on a very ambitious plan to upgrade very rapidly major airports of  our country," says Mr. Ajay Prasad, Secretary, Civil Aviation Ministry. He estimates that in the long-term, these metro airports would become state-of-the-art entities before the 2010 Commonwealth Games.

The gathering manpower problem is one that India cannot escape, what with almost 500 additional aircraft on the way. Engineers take more than five years to train and need at least three years of experience. Whilst pilots need around five years to qualify for small aircraft, a 747 pilot requires 10 years by comparison. Most of these planes will be here in India much.