Debating India

Getting aviation infrastructure right

Saturday 2 July 2005, by JAYANTH*V.

Before the new fleet of aircraft joins the airlines, it is imperative to create the infrastructure needed at the airports.

THE COMPREHENSIVE Economic Cooperation Agreement that India has signed with Singapore has the potential for several spin-offs. The very next day after it was inked by the two Prime Ministers, Indian Airlines entered into two joint venture arrangements with Singapore firms to expand and equip the ground-handling facilities at major airports and also provide state-of-the-art maintenance, repair and overhaul services.

The Singapore Airport Terminal Services (SATS), which already has a presence in India, and the Singapore Airlines Engineering Company (SIAEC) are the two partners IA has chosen. For at least two years now, IA has been toying with the idea of a joint venture to take over the ground-handling facilities at the major airports. With an open skies policy and the growth of domestic airlines, it is time the airports were modernised and equipped to handle both aircraft and the volume of passengers expected to use them over the next three years. Singapore Airlines (SIA), which has earned a niche for itself among international airlines, has created subsidiaries such as SATS and SIAEC to not only keep upgrading the facilities in the City State but also share its expertise with developing countries which want to create world-class facilities at their new airports. It is significant that SIA has outsourced its ticketing system to India.

Need for better infrastructure

With the advent of private airlines in the country, the number of aircraft and flights is increasing every month. It is one thing for these airlines to equip themselves and ensure proper maintenance of aircraft and good service to the passengers.

But having allowed so many airlines to enter the race, the Government of India will have to create the required infrastructure at the airports to handle the projected increase in traffic. Especially in the context of the low-cost airlines, there is a new generation of passengers, which has never flown before and is now travelling by air. Now 186 aircraft are estimated to be in operation in the country.

This number could go up to at least 300 over the next three years, according to current projections. And, it could go up even further if more airlines enter the scene and start leasing aircraft at will.

The facilities needed at the airports - aside from the runway and aviation-related infrastructure - include transportation in the tarmac area, service vehicles, cargo handling vehicles, baggage conveyer belts and passenger amenities.

In India, terminal buildings are constructed based on three or five-year projections, whereas it is supposed to provide for an expansion of services over a 10-year period.

The Changi airport in Singapore stands testimony to planning and facilities. Much of the expanded airport has been built on reclaimed land and the terminals have been laid out in a way that one deals with just Singapore Airlines and the others share out the rest.

There are good inter-connection facilities between the terminals and booked baggage reaches the belt even before the passenger. While most of these facilities may have to be developed by the Airports Authority, the new joint venture can at least take care of "ground handling facilities" to make it more comfortable for passengers.

Potential profit-centre

As for the Maintenance, Repair and Overhaul (MRO) engineering services, IA knows it has the potential to become a profit-centre. Most of the new airlines will prefer not to invest in MRO services but will certainly need them when they switch over to their own aircraft. Instead of looking at them as mere competitors, it makes good commercial sense for IA to seethem as potential clients and customers. It was perhaps with this in mind that the IA Board thought of an MRO subsidiary a couple of years ago.

The time for fruition has come and it is urgent that the two new subsidiaries begin work as soon as possible - not a hotchpotch job, but a planned, thorough exercise for which SATS and SIAEC can provide not just additional equity or investment but also the much-needed concepts and expertise. The 10 airports identified for development should be only the first batch. At least three dozen airports need to developed to meet the untapped potential, not just for business travellers but also foreign and domestic tourists, whose numbers are bound to swell in the months and years to come.

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