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AIRPORTS

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AIRPORTS

Executive Summary.3
Advantage India... 5
Market Overview & Trends........ 7
Porter Five Forces Analysis ...20
Strategies Adopted.. 22
Growth Drivers......... 24
Opportunities.....36
Success Stories.... 38
Useful Information.........................41

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AIRPORTS
EXECUTIVE SUMMARY (1/2)

600 CAGR: 421


17.24% By 2020, passenger traffic at
400
Third largest aviation market by 190.1 Indian airports is expected to
2020 200 increase to 421 million from
0 190.1 million in 2015
2015 2020

2015 2020

400.0 CAGR: 349


10.79%
The travel & tourism industry is
Travel & tourism to be 200.0 125.2 forecast to grow 10.79 per cent
contributing USD349 billion to
to USD349 billion in 2024 from
GDP by 2024 0.0
2014 2024 USD125.2 billion in 2014

2014 2024

400.00 Spending on business travel is


224.6
200.00 96.01 estimated to increase to
19.1 60.4
USD60.4 billion in 2024 from
Business & leisure travel to 0.00
2015 2024
USD19.1 billion in 2015, while
boost growth
that on leisure travel is forecast
Leisure Travel & Tourism Spending( In USD Bn) to rise to USD224.6 billion from
Business Travel & Tourism Spending(In USD Bn) USD96.01 billion in 2015

Source: World Travel and Tourism Council, Airport Authority of India, TechSci Research
AUGUST 2015 3
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AIRPORTS
EXECUTIVE SUMMARY (2/2)

Working population (aged


CAGR: 0.6% 900 between 15 and 64 years) is
By 2030, Indias working
estimated to increase from 812
population to be thrice the total
812 million in 2014 to 900 million by
population in the US
2030, almost three times the
US population
2014 2030

267
CAGR: 10.8% Indias middle income population
is expected to increase from 160
By 2016, Indias middle income 160 million (over 50 per cent of the
class to be triple the total total population in the US) in
population in Germany 2011 to 267 million by 2016
equivalent to over three-times
Germanys population
2011 2016

Source: World Travel and Tourism Council, Asian Development Bank, TechSci Research

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AIRPORTS

ADVANTAGE INDIA

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AIRPORTS
ADVANTAGE INDIA

Robust demand
Opportunities in MRO
RisingGrowing demand
FY00 working group and widening
FY15
middle class demography is Growth in aviation accentuating
expected to boost demand demand for MRO facilities
No of No of
operational India plans to increase the number Expenditure in MRO accounts for operational
airports: 50 of airports to 250 by 2030 to cater 13-15 per cent of total revenues; it airports: 68
to growing leisure and business is the second-highest expense after
travel fuel cost

Freight traffic also likely to go up as By 2020, the MRO industry is likely


trade with the rest of the world to grow over USD1.5 billion from
increases USD0.5 billion currently
Advantage
India Policy support
Increasing investments The government has been
Investments totaling USD12.1 encouraging private sector
billion in the airport sector are likely participation
to be made during the Twelfth Five
Year Plan (2012-17); of these,
private investments are expected to Tax incentives for developers;
total USD9.3 billion liberalisation of the aviation sector
Open Sky Policy
Growing private sector participation
through the Public - Private Government has allowed 49 per
Partnership (PPP) route cent FDI in aviation for foreign
carriers, while NRIs are allowed to
pick up 100 per cent equity in
airlines
Source: Ministry of Civil Aviation, MRO India, TechSci Research
Notes: FDI Foreign Direct Investment, MRO Maintenance, Repair and Overhaul; FY Indian Financial Year (April March)
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AIRPORTS

MARKET OVERVIEW AND TRENDS

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AIRPORTS
EVOLUTION OF THE INDIAN AVIATION SECTOR

India is the ninth largest civil aviation market in the world

India ranks fourth1 in domestic passenger volumes (139.3 million2) as of FY15

Indias civil aviation market is set to become the worlds third3 largest by 2020

Scheduled airlines: distance


flown (mn km) 199 772 (FY144)

Non-scheduled airlines in
39 122 (FY15)
operation

Number of aircrafts 225 1,649 (FY14)

Passenger handling
capacity at airports 66 million 270 million (FY14)

Number of airports 50 125 (FY15)


2000

Source: Airports Authority of India, Planning Commission, Ministry of Statistics and


Programme Implementation, Ministry of Civil Aviation, TechSci Research
Notes: 1 India ranks after US, China and Japan, 2 Data for FY15, 3 India ranks after the US and China,
4 Data for Financial Year and not Calendar Year; FY Indian Financial Year (April March), mn km Million Kilometers

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AIRPORTS
INDIA HAS 449 AIRPORTS AND AIRSTRIPS, OF WHICH 125 AIRPORTS ARE OWNED BY AAI

Non-operational Domestic airports


AAI managed (31) (49)
(125)

Airports and
airstrips in India Customs airports
Operational (68) (7)
(449)
Non-AAI airports
and airstrips
(324)
Civil enclaves International (12)
(26)

Freight traffic 63% 37% Activity in AAI


airports - shares (%) Airports Authority of India (AAI) was
FY14 Established in 1994 under the Airports
Authority Act
Passenger traffic 27% 73%
Responsible for developing, financing,
operating, and maintaining all government
airports
Aircraft movement 22% 78% Basic facts The Aircraft Act (1934) governs remaining
airports

International Domestic
Source: Airports Authority of India, TechSci Research
Notes: AAI Airports Authority of India, JV Joint Venture,
FY Indian Financial Year (April March)

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AIRPORTS
SIX MAJOR AIRLINES OPERATE IN THE COUNTRY

Spicejet
92.00% Market share: 9.80%
Passenger load traffic: 88.70%

90.00% Indigo
Market share: 36.90%
Passenger load traffic: 85.70%
88.00%
Passanger Load Factor

86.00% GoAir
Market share: 8.80%
Passenger load traffic: 85.50%
84.00%

82.00% Jet Airways


Market share: 19.90%
Passenger load traffic: 82.00%
80.00% Jetlite
Market share: 4.30%
Passenger load traffic: 81.90%
Air India
78.00%
Market share: 17.4%
Passenger load traffic: 78.50%
76.00%
-5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
Market Share
Note: Market Share as on April15 and Load Data for the month of April15
as published by Directorate General of Civil Aviation
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AIRPORTS
THE SIX MAJOR AIRPORTS IN THE COUNTRY

Delhi
Passenger traffic handled in
FY14: 36.8 million
FY15: 40.9 million;

Kolkata
Passenger traffic handled in
FY14: 10.1 million
FY15: 10.9 million;

Mumbai
Passenger traffic handled in;
FY14: 32.2 million
FY15: 36.6 million

Hyderabad
Passenger traffic handled in
FY14: 8.7 million
Bengaluru FY15: 10.4 million
Passenger traffic handled in
FY14: 12.9 million
FY15: 15.4 million;
Chennai
Passenger traffic handled in
FY14: 12.9 million
FY15: 14.3 million;

Source: AAI, TechSci Research


Note: FY Indian Financial Year (April March)

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AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (1/2)

Total passenger traffic stood at a 190.1 million in FY15 Passenger traffic in FY15
200 35.00%
Passenger traffic increased by 12.47 per cent in FY145 180 30.00%
160 25.00%
Growth in passenger traffic has been strong since the new 140 20.00%
millennium, especially with rising incomes and low-cost 120
15.00%
aviation; passenger traffic expanded at a CAGR of 11.16 100
10.00%
per cent over FY0615 80
60 5.00%
40 0.00%
20 -5.00%
0 -10.00%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Passanger Traffic Growth Rate

Source: Association of Private Airport Operator, TechSci


Research, Notes: CAGR Compound Annual Growth Rate,
FY Indian Financial Year (April March)

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AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (2/2)

Domestic passenger traffic expanded at a CAGR of 11.8 per Growth in domestic passenger traffic has been robust
cent over FY0615; by FY17 domestic passenger traffic is
expected to touch 209 million 200 50.00%
180
40.00%
160
International passenger traffic posted a CAGR of 9.5 per
140 30.00%

139.3
cent over FY06-15 and is set to touch 60 million by FY17

122.41
120

121.51

116.37
20.00%

105.52
100

89.39
87.06
80 10.00%
Growth in passenger traffic set to remain strong in future

77.3
70.62
22 50.98
60 0.00%
40
-10.00%

51
47
43
12th Plan Period

41
38
20

34
32
30
26
0 -20.00%
60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

11th Plan Period International Domestic


41 Growth-International(%) Growth-Domestic(%)
10th Plan Period
209
26
122
14 During FY15, domestic passenger traffic increased by
71
13.80 per cent compared to 5.19 per cent in FY14
26

FY02 FY07 FY12 FY17E During FY15, international passenger traffic increased
International Passenger Throughput International (million) by 8.9 per cent compared to 8.3 per cent in FY14
Domestic Passenger Throughput Domestic (million)

Source: Airports Authority of India, Ministry of Civil Aviation, TechSci Research


Notes: YoY Year on Year, FY Indian Financial Year (April March)

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AIRPORTS
FREIGHT TRAFFIC GREW AT A CAGR OF 6.2 PER CENT DURING FY06 TO FY14 (1/2)

Total freight traffic registered a CAGR of 6.7 per cent over International freight traffic was 61 per cent of the
FY06-15 total in FY15
3000 50.00%
Domestic freight traffic increased at a CAGR of 8.23 per
cent over FY06-15 while international freight traffic rose 5.9
40.00%
per cent over the same period 2500

30.00%

986
In FY15, domestic freight traffic was 0.98 million tonnes, 2000

852

812

840
while international freight traffic was at 1.5 million tonnes

784
20.00%

689
1500

568

552
During FY15, domestic freight traffic at 0.98 million

530
10.00%
increased by 17.38 per cent while international freight traffic

484
at 1.5 million increased by 7.08 per cent compared to FY14. 1000

1542
0.00%

1496

1468

1440
1407
1271
1149
1147
1023
By 2023, total freight traffic is expected to touch 4.14 million

920
500
tonnes growing at a CAGR of 7.27% between FY2016-23. -10.00%
In addition, International freight traffic is expected to grow at
a CAGR of 7.13% while Domestic freight traffic is expected 0 -20.00%
to grow at a CAGR 7.50% between FY2016-23. FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

International ('000 Tonnes) Domestic('000 Tonnes)


Growth-Internation(%) Growth Domestic(%)

Source: Airports Authority of India, TechSci Research

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AIRPORTS
AND IS POISED TO GROW FURTHER (2/2)

Freight traffic is expected to be five times the current level Freight traffic (million tonnes)
by the end of the next two decades. It is expected to be 11.4
3.00 25%
million tonnes by 2032
2.50 20%

Growth in import and export in India will be the key driver for 15%
2.00
growth in freight traffic as 30 per cent of total trade is 10%
1.50

2.53
undertaken via airways

2.35

2.28

2.28
5%

2.19
1.96
1.72
1.00

1.70
1.55
0%

1.40
0.50 -5%
0.00 -10%

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15
Million Tonnes Growth(%)

Source: Airports Authority of India, TechSci Research


Note: FY Indian Financial Year (April March)

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AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (1/2)

Total aircraft movement recorded a CAGR of 5.1 per cent Total aircraft movement in FY15 (000)
over FY07-15
1800 25.0%
Both international and domestic aircraft movement have 1600 20.0%
nearly doubled over this period 1400
15.0%
1200
In FY15, total aircraft movement increased by 4.5 per cent 1000 10.0%

1606.04
1536.59
1478.9
1544
to 1.6 million 800

1394
5.0%

1331
1308

1306
1078
600
0.0%
400
200 -5.0%
0 -10.0%
FY07FY08FY09FY10FY11FY12FY13FY14FY15

Total Aircraft Movement Growth Rate(%)

Source: Association of Private Airport Operators,


Airports Authority of India, TechSci Research
Notes: CAGR Compound Annual Growth Rate
FY Indian Financial Year (April March)

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AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (2/2)

Domestic aircraft movement increased at a CAGR of 4.86 Aircraft movement growth


per cent over FY07-15 while international aircraft movement
expanded 6.07 per cent (CAGR) over the same period 1800 25.0%
1600 20.0%
In FY15, domestic aircraft movement increased by 4.94 per 1400
15.0%
cent, while international aircraft movement expanded by 1200
1000 10.0%
3.02 per cent
800 5.0%
600
During FY15, the total number of domestic aircraft 0.0%
400
movement increased to 1.3 million, an increase of 4.94 per 200 -5.0%
cent compared to FY14 0 -10.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015

During FY15, the total number of international aircraft International ('000) Domestic('000)
movement increased to 0.35 million, an increase of 3.02 per Growth-Domestic(%) Growth-International(%)
cent from FY14
Source: Association of Private Airport Operators, TechSci Research
Notes: YoY Year on Year; FY Indian Financial Year (April March)

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AIRPORTS
AAI DOMINATES, BUT PRIVATE SECTOR PARTICIPATION IS RISING

Until recently, AAI was the only major player involved in developing and upgrading airports in India

Post liberalisation, private sector participation in the sector has been increasing

Private sector investment is expected to increase to USD9.3 billion during the Twelfth Five Year Plan from USD5.5 billion in
the previous plan

Development of Hyderabad International Airport; modernisation


of Delhi International Airport

Modernisation of Mumbai International Airport

Development of Bengaluru International Airport


Major private
sector players
Development of Bengaluru International Airport

Development of Bengaluru International Airport

Development of Simoga and Gulbarga airports in Karnataka

Note: AAI Airports Authority of India

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AIRPORTS
NOTABLE TRENDS IN THE AIRPORTS SECTOR

Currently, five international airports have been completed successfully under PPP mode
Rising private
Investment made by the private sector during the Twelfth Five Year Plan (201217) is
participation and
expected to increase by 69.1 per cent to USD9.3 billion over that during the Eleventh Five
Investments Year Plan

Greater use of non- Rising business activity leading to higher demand for non-scheduled airlines
scheduled airlines 122 operators with combined fleet of 406 aircrafts in FY15

Increasing use of development fees by airport developers and operators


User development fees Airport Development Fee: Delhi, Mumbai airports to fund expansion
User Development Fee: Hyderabad, Bengaluru airports for maintenance

Indian airports are emulating the SEZ-aerotropolis model to enhance revenues; focus on
Focus on non- revenues from retail, advertising, vehicle parking, etc.
aeronautical revenue Absence of complementary meals in low-cost airlines have boosted the food and
beverages retail segment at airports

Source: DGCA
Note: FY Indian Financial Year (April March)

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AIRPORTS

PORTER FIVE FORCES ANALYSIS

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AIRPORTS
PORTERS FIVE FORCES ANALYSIS

Competitive Rivalry*

Competition among major players is very high, especially in LCCs (Low cost
carrier) section because the airlines compete for the middle income group
customers and passengers of air-conditioning segment of railways. This group Threat of New
has low brand loyalty and is highly price sensitive Entrants
Competition might intensify further in LCC segment with Air Asia India being (Low)
granted DGCAs operator license

Threat of New Entrants* Substitute Products*

Threat remains low because of the Threat remains low in this sector Bargaining Competitive Substitute
nature of the industry (Regulatory also as no other means of Power of Rivalry Products
hurdles, Capital-intensive) transport is as swift, and Customers (High) (Low)
Air Asia India has been granted convenient as airlines (Low)
DGCA approval (Price War) It saves time

Bargaining Power of Suppliers* Bargaining Power of Customers*


Bargaining
Power of
Bargaining power of suppliers Bargaining power of customers
Suppliers
remain high as there are only few remains low as the demand for low
fuel and aircraft suppliers cost air travel is quite high (High)
Talent pool of pilots, engineers and The costs of switching airplanes
other staff is also limited and services offered hardly differ
with each other
Source: Central Asia-Pacific Aviation, TechSci Research
Note: *(Notes w.r.t airlines)

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AIRPORTS

STRATEGIES ADOPTED

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AIRPORTS
STRATEGIES ADOPTED*

LCC segment is poised to grow, led by plans of induction of an additional 20 aircrafts on domestic
routes by the second half of FY14
Expansion of CAPA
Expansion Further, rise of LCCs was also supported by the exit of Kingfisher, which created a void
Capacity will also increase with new terminals coming up in Mumbai, Bengaluru, Chennai and
Kolkata
Indian carriers to double their fleet capacity by 2020 to around 800 aircrafts

Indian LCCS are looking forward to increase their ancillary services, without tampering their
business models. This includes services like lounge access, priority boarding, customer loyalty
Ancillary services
memberships and customer meals
Both Indigo and GoAir are eyeing a larger share of corporate market

Indian LCCs are expected to increase their regional, international (Asia-pacific, Middle East)
operations
Indian LCCs are looking forward to increase their low cost products on routes which will take up to
Increasing operations four hours (shorter international routes)
This will allow deleveraging of domestic fleet, increasing aircraft utilisation and improving commercial
performance
Chennai, with its strategic location in South India has a strong potential to become a hub, with
connecting flights to Gulf and across South East Asia

Although India is heavily characterised by LCCs, there is shortage of low cost airports. Government
Governments push has plans to develop around 100 low cost airports, which will significantly lower the operating costs
NIAMAR (National Institute of Aviation Management and Research) has been developed to bridge
the supply gap of aviation personnel
Source: Central Asia-Pacific Aviation, TechSci Research
Note: *(Notes w.r.t airlines), LCC Low Cost Carrier
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AIRPORTS

GROWTH DRIVERS

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AIRPORTS
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS

Increasing
Growing
Growing demand
demand Policy support
Strong investments
government
support

AAI driving large


Expanding middle Greater
modernisation,
income group and government focus
development
working population on infrastructure
projects

Inviting Resulting in
Rising domestic
Increasing Increasing private
and foreign
liberalisation, sector
tourists and
Open Sky Policy participation
travellers

Strong projected
Strong growth in Policy sops, FDI
demand making
external trade encouragement
returns attractive

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AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (1/2)
GDP growth and per capita income
Rising per capita income and growing working
population
5000 12
Per capita income is expected to increase at a CAGR 4000 10
of 7.37 per cent during 2005-2015E 8
3000

4,601
4,307
The population belonging to the working age group

4,077
6

3,900
3,708
3,457
3,141
2000

2,914
2,789
2,509
(1564 years), at 65.7 per cent of the total population 4

2,260
currently, is expected to grow; this indicates the 1000 2
employee base and the frequency of business travel 0 0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E
are expected to increase

Gross domestic product based on purchasing-power-


parity (PPP) per capita GDP( In USD)
Real GDP Growth Rate (%)

Source: IMF, World Travel and Tourism Council, TechSci Research


Note: E - IMF estimates

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AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (2/2)
Travel and tourism spending (USD billion)
Rising domestic and foreign tourists

Improving tourism infrastructure 120

96.01
90.16
Successful ad campaigns abroad
100 CAGR: 10.85%

77.87
The share of travel & tourism in Indias GDP showed

69.3

68.7
7.5 per cent growth in 2014; and is expected to grow 80

60.9
by 7.0 per cent per annum by 2014-2023E

48.7
46.2
60

42.1
CAGR: (1.81%)
More business travellers as well

26.4
25.5

20.80
24.4

19.10
40

22.3

17.78
22.1

18.6
India is one of the fastest growing economies
20
Business travel & tourism spending decline by CAGR
1.81% between 2007-15. 0
Emergence of business hubs like Mumbai (Finance), 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bengaluru (IT), Chennai (IT), Delhi (Manufacturing, IT) Leisure Travel & Tourism Spending( In USD Bn)
Business travel market grew to USD28.8 billion in Business Travel & Tourism Spending(In USD Bn)
2015 from USD24.9 billion in 2014, making India the
10th largest business travel market in the world in Source: World Travel and Tourism Council,
2015. Make in India, Global Business Travel Association, TechSci Research
Notes: IT Information Technology, F Forecast

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AIRPORTS
MORE PASSENGERS AND RISING TRADE AIDING HIGHER AIRCRAFT MOVEMENT

Rising exports and imports (USD billion)


Growing trade benefits of freight movement

489.32

490.74
600

447.52
450.2
Over FY09-15,

369.77
Indias exports expanded at a CAGR of 8.93 500

314.41

309.56
305.96
303.69

288.37

300.4
per cent to USD309.5 billion in FY15.

249.82
400
Imports registered a CAGR of 6.68 per cent

185.29

178.75
which has reached to USD447.52 billion in 300
FY15 200
Growing trade augurs well for airports as they handle
100
about 30 per cent of Indias total trade (by value)
0
FY09 FY10 FY11 FY12 FY13 FY14 FY15
FDI in aviation and
Increasing airline
liberalised aviation Exports Imports
operators
policy

Source: Ministry of Commerce, TechSci Research


Notes: CAGR Compound Annual Growth Rate,
FY Indian Financial Year (April March)
Higher aircraft
movement

Growth in passenger
Rise in freight traffic
traffic

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AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (1/2)

Government of India (GOI) envisions airport infrastructure investment of USD11.4 billion


Greater focus on under the Twelfth Five Year Plan (2012-17)
infrastructure The Ministry of Civil Aviation has approved annual planed outlay of USD1.6 billion for
FY14 for the development of airport infrastructure

With the opening of the airport sector to private participation, six airports across major
cities are being developed under the PPP model
Liberalisation, Open
Currently, 60 per cent of airport traffic is handled under the PPP model, while the
Sky Policy remaining 40 per cent is managed by the AAI
Increased traffic rights under bilateral agreements with foreign countries

100 per cent FDI under automatic route for Greenfield projects
Encouragement to FDI 100 per cent FDI for existing airports is also possible with an approval from FIPB
Approval of 49 per cent FDI in aviation for foreign carriers

Notes: India currently has bilateral air service agreements with 104 countries. These include Brazil, 27 members of the EU, and
China. In 2008 traffic rights were been enhanced with Mexico, Saudi Arabia, Netherlands, Qatar, Iran, Japan and Turkey,
FDI Foreign Direct Investment, FIPB Foreign Investment Promotion Board

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AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (2/2)

100 per cent tax exemption for airport projects for a period of 10 years
Taxes and duties Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers are exempted
completely from customs and countervailing duties

In the Union Budget for FY13, the Finance Minister has proposed budgetary support worth
USD58.3 million to AAI to develop airport infrastructure in the North-Eastern states of India
At the same time, the aviation regulator DGCA has been allocated USD12.5 million for its
development plan
Budgetary support In the Union Budget for FY15, Finance Minister has said that there are 7 airports under
construction which includes Guwahati, Dibrugarh, Silchar, Agartala, Shillong, Imphal, and
Dimapur. India also plans to build 200 low-cost airports in the next 20 years to connect
tier-II and tier-III cities in the country
In the Union Budget for FY16, budgetary support of USD13.27 million has been allocated
to the Civil Aviation Sector out of which USD3.65 million has been attributed towards
Pakyong, Sikkim project
Source: Ministry of Civil Aviation
Notes: AAI Airports Authority of India,
DGCA Directorate General of Civil Aviation,
FY Indian Financial Year (April March)

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AIRPORTS
AAI LEADS THE WAY IN AIRPORTS INFRASTRUCTURE INVESTMENT

The AAI aims to bring around 250 airports under operation across the country by 2020
Metro airports
The AAI has developed and upgraded over 23 metro airports in the last five years

The Airports Authority of India (AAI) is planning to spend USD1.3 billion on non-metro
projects over the five years (201317); it is mainly focusing on the modernisation and up
gradation of airports; New airports at Itanagar, Kohima and Gangtok are also planned
Non-metro airports
The Government of Andhra Pradesh plans to develop greenfield airports in six cities
(Nizamabad, Nellore, Kurnool, Ramagundam, Tadepalligudem, and Kothagudem) under
the PPP model

Over 30 airport development projects are under progress across various regions in
Northeast India
Northeast India AAI plans to develop over 20 airports in tier II and III cities in next five years
The AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and
Dibrugarh as intra-regional hubs

Source: TechSci Research

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AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (1/2)

Recourse to the Public Private Partnership (PPP) model has boosted private sector investments in airports

PPP route for five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) most noteworthy

Increasing share of private sector in equity component of major airports

74 per cent private share holding in IGI Airport (Delhi) - owned majorly by GMR (54 per cent),
Fraport AG (10 per cent), Eraman Malaysia (10 per cent); rest of the shares owned by
Airports Authority of India
74 per cent private shareholding in CSI Airport (Mumbai) - owned majorly by GVK (50.5 per
cent), Bid Services Division (Mauritius) Limited (13.5 per cent), ACSA Global (10 per cent);
rest of the shares owned by Airports Authority of India
74 per cent private shareholding in RGI Airport (Hyderabad) - owned majorly by GMR (63 per
cent), Malaysia Airports Holdings Berhad (11 per cent); rest of the shares owned by
Government of India (13 per cent) and Government of Andhra Pradesh (13 per cent)

Source: TechSci Research

AUGUST 2015 For updated information, please visit www.ibef.org 32


AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (2/2)

Delhi PPP format likely to


(Modernisation, Bijapur Airport
Terminal 3 continue
Terminal 3) construction in
Delhi completed in
2010 Shimoga
Mumbai
Greenfield Airport
(Modernisation)
Participation in projects with
international private sector
airport projects participation
Hyderabad Terminal 3 - Total Hassan Airport
cost
USD2.7 billion
USD5.8 billion of Gulbarga
(including Terminal 3
Bengaluru investments likely Airport
and 1- D)

Source: TechSci Research

AUGUST 2015 For updated information, please visit www.ibef.org 33


AIRPORTS
SUCCESSFUL PPP AIRPORTS IN INDIA

Presently India has five PPP airports each at Mumbai, Delhi, Cochin, Hyderabad and Bengaluru, which together handle over
60 per cent of countrys air traffic

Type of project/
Name of airport Operator Revenue sharing
PPP structure
Chhatrapati Shivaji Mumbai International Airport Ltd 38.7 per cent of gross revenue to be
Brownfield/BOOT
International Airport (MIAL) shared with AAI

Indira Gandhi Delhi International Airport Ltd 45.9 per cent of gross revenue to be
Brownfield/BOOT
International Airport (DIAL) shared with AAI

Rajiv Gandhi GMR Hyderabad International Concession fees - 4 per cent of


Greenfield/BOOT
International Airport Airport Ltd (GHIAL) gross revenue to be shared with AAI

Bengaluru Bengaluru International Airport Concession fees 4 per cent of


Greenfield/BOOT
International Airport Ltd (BIAL) gross revenue to be shared with AAI

Payment of dividend to the


Cochin Cochin International Airport Ltd Greenfield/BOO Government towards their 26 per
International Airport (CIAL) cent of equity capital

Source: Association of Private Airport Operators, TechSci Research


Notes: BOOT - Build Own Operate Transfer; BOO - Build Own Operate

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AIRPORTS
FOREIGN PLAYERS ARE SHOWING INCREASING INTEREST IN THE SECTOR

Major foreign players Airport Stake (%) Description

Airports Company South Mumbai International


10 Operates and owns ten airports in South Africa
Africa Global Airport Pvt Ltd

Delhi International Airport Operates and manages 5 international gateways,


10
Pvt Ltd 16 domestic airports, to 18 short take-off and
Malaysia Airports Holdings landing ports (Short Take-off and Landing ports)
Berhad Hyderabad International that serves the rural and remote areas in
11
Airport Pvt Ltd Malaysia

Global airport operator that offers airport


Frankfurt Airport Services Delhi International Airport management services including terminal and
10
Worldwide Pvt Ltd traffic management, baggage and cargo
handling, and aviation ground handling

AirAsia is a Malaysian low-cost carrier. It has


formed a joint venture AirAsia (India) Pvt Ltd with
Joint venture with Tata
AirAsia 49 Tata Sons (30 per cent stake) and Arun Bhatia
sons and Arun Bhatia
via Telestra Tradeplace (21 per cent stake) in
March 2013

Source: TechSci Research

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AIRPORTS

OPPORTUNITIES

AUGUST 2015
AIRPORTS
OPPORTUNITIES

Policy support and demand Huge potential to develop Leverage on non-


growth unlocking large India as an MRO hub aeronautical revenues,
investment potential improved technology

The Indian aviation sector The Indian Aviation Industry Airport developers can now
likely to see investments aims to boost MRO business draw on wider revenue
totalling USD12.1 billion in India, which is currently opportunities such as retail,
during the Twelfth Five Year worth US500 million and is advertising and vehicle
Plan estimated to grow over US1.5 parking
billion by 2020
Of the total investment, Future operators will benefit
USD9.3 billion is expected to MRO facilities are developed from greater operational
come from the private sector at Gurgaon and Nagpur efficiency due to satellite
based navigation systems like
Success of PPP formats will Indian airline companies Project Gagan which is in
raise investment in existing spend over 1315 per cent of development phase
and greenfield airports their revenues on
maintenance, which is the
second-highest cost
component after fuel

Notes: Project Gagan is directed towards transitioning from a ground-based navigation system to a satellite-based one. AAI and ISRO are
jointly working on this. A Space Based Augmentation System (SABS) will be operational by 2013,
MRO Maintenance, Repair and Overhaul

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AIRPORTS

SUCCESS STORIES

AUGUST 2015
AIRPORTS
IGI INTERNATIONAL AIRPORT, DELHI - A COMPELLING SUCCESS STORY

Ranked first in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers) up
from second in 2012

Delhi International Airport Ltd became the first in the world to receive the ISO 22301:2012 certification for its robust business
continuity management system

New Terminal 3 won the British Construction Industry Award for the best international project in 2010

Phase I Final
Facts and features
Passenger Traffic: 40.9 mn (FY15) 100 million (by 2020)
Passenger handling
34 million (60 million as on October
Aircraft movement: 0.3 mn (FY15) capacity per annum 2013)
Cargo: 0.7 mn tonnes (FY15)
Terminal 3 Area (acres) 1,907 5,106

Retail space: 0.2 mn sq feet


Apron area: 6.7 mn sq feet Operational status Completed on Mar-2010 Ongoing 20-year project
Multi level car park: 4,300 cars/day
(mn: million; sq: square)
Phase 1 of modernisation of IGI International Airport (at a cost of INR86 billion) involved
renovation of terminals 1A, 1B, 1C and Terminal 2. It also included construction of a
new domestic terminal along with an integrated passenger terminal (Terminal 3)

Source: Delhi International Airport Ltd, Association of Private Airport Operators,


Airports Authority of India, TechSci Research;
Note: ACI Airports Council International
AUGUST 2015 For updated information, please visit www.ibef.org 39
AIRPORTS
CSI INTERNATIONAL AIRPORT, MUMBAI - HARNESSING THE POWER OF PPP

Ranked fifth in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers)

23rd across all categories among a survey of 146 international airports in 2010

Plans to increase the handling capacity at the airport from 36 to 48 flights/hr and to increase the passenger capacity to 40
million annually

Facts and features Modernisation of the Mumbai International Airport will


entail investments worth USD1.3 billion over a period of
In FY15, CSI handled
20 years
Passenger traffic: 36.6 million Government of India to provide USD1.1 billion
Parts of the project completed till now:
Cargo movement: 0.7 million tonnes
Phase I (2008): New airport lounges, retail outlets,
duty-free shops, temporary cargo facilities, and
Passenger handling 40 million multilevel car parks
capacity per annum
Phase II (2010): Involved construction of a new
terminal at Sahar, a parallel runway, and new
Cargo handling capacity
1 million tonnes cargo facilities
per annum

Source: Airports Authority of India, Mumbai International Airport Ltd, TechSci


Research
Note: ACI Airports Council International

AUGUST 2015 For updated information, please visit www.ibef.org 40


AIRPORTS

USEFUL INFORMATION

AUGUST 2015
AIRPORTS
INDUSTRY ASSOCIATIONS

Airports Authority of India (AAI)


Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24632950

Directorate General of Civil Aviation (DGCA)


Aurbindo Marg, Opp. Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24622495
Fax: 91 11 24629221
E-mail: dri@dgca.nic.in, dfa@dgca.nic.in

AUGUST 2015 For updated information, please visit www.ibef.org 42


AIRPORTS
GLOSSARY
AAI: Airports Authority of India

ACI: Airport Council International

CAGR: Compound Annual Growth Rate

FDI: Foreign Direct Investment

FY: Indian Financial Year (April to March)

So FY10 implies April 2009 to March 2010

GOI: Government of India

INR: Indian Rupee

MRO: Maintenance, Repair and Overhaul

PPP: It could denote two things (mentioned in the presentation accordingly)

Purchasing Power Parity (used in calculating per-capita GDP slide 12, GROWTH DRIVERS)

Public Private Partnership (a type of joint venture between the public and private sectors)

AUGUST 2015 For updated information, please visit www.ibef.org 43


AIRPORTS
EXCHANGE RATES

Exchange rates (Fiscal Year) Exchange rates (Calendar Year)

Year INR equivalent of one USD Year INR equivalent of one USD
200405 44.81
2005 43.98
200506 44.14
2006 45.18
200607 45.14
2007 41.34
200708 40.27
2008 43.62
200809 46.14

200910 47.42 2009 48.42

201011 45.62 2010 45.72


201112 46.88
2011 46.85
201213 54.31
2012 53.46
201314 60.28
2013 58.44
2014-15(Expected) 60.28 2014 61.03

2015(Expected) 61.03

Source: Reserve bank of India,


Average for the year

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AIRPORTS
DISCLAIMER

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