Indian airports face capacity crunch as aviation market booms

Indian airports face capacity crunch as aviation market booms

Domestic passenger numbers topped 100 million last year!

India’s aviation industry risks a capacity crunch as an expansion in landing slots and terminals fails to keep pace with the number of jets entering the market and rapid growth in demand from travellers, executives warned lately.

Airlines including Interglobe Aviation’s IndiGo, SpiceJet and GoAir have 880 aircraft on order as they tap into a market growing 20 per cent-plus per annum thanks to rising incomes and low-cost fares. Domestic passenger numbers topped 100 million last year, with most of the growth involving flights into and out of the biggest cities.

“The airport infrastructure at many airports is breaking at the seams because there is no more capacity,” said Sanjiv Kapoor, chief strategy and commercial officer at Vistara, an Indian airline jointly owned by Singapore Airlines and Tata Sons.

“Everyone is scrambling to grab whatever little is left but what happens after that?”, Kapoor told Reuters at an aviation conference in Mumbai.

Most of India’s 40 largest airports will exceed their design capacity within a decade based on projected growth rates, consultancy CAPA estimates, with Mumbai and Chennai fast approaching saturation. Kapil Kaul, chief executive officer (CEO) for South Asia at CAPA, said India could run out of capacity within three to five years. “We are not ready beyond 2020-2021,” he said.

India’s government plans to open 50 disused airports by 2020, and has given approval for 18 greenfield airports. Junior aviation minister Jayant Sinha said this week India would need to triple capacity within 15 years at a cost of up to 3 trillion rupees ($45 billion), mostly from private sources. Delays in acquiring land, as well as the inability of debt-laden domestic airport operators such as GMR Group and GVK to invest, have stymied expansion proposals.

“No one will invest in airports till you open investment in airlines,” Manish Sinha at GMR Hyderabad International Airport Ltd said, referring to a 49 percent cap on foreign ownership of Indian carriers.

Capacity constraints are most acute in Mumbai, where aircraft can wait for landing spots for 45 minutes, according to Martin Consulting. The government wants to build a new airport — under discussion for 20 years — outside the city but has repeatedly delayed plans, with initial bids due this year.

Order Books

Newer Indian carriers are set to swell aircraft order books further. Vistara could order 50 narrow-body and 50 wide-body aircraft this year, Kaul at CAPA said. AirAsia India plans to grow its fleet to 20 aircraft by mid-2018.

In an attempt to lure firms, India last year allowed foreign investors to invest 100 per cent in brownfield airport projects. Operators such as Singapore’s Changi Airport have expressed interest, although questions remain about the government’s revenue sharing model. The looming capacity crunch adds to the worries of Indian carriers, which last year reported their first combined profit in a decade. CAPA estimates airlines will lose $250 million to $300 million this year amid intensifying competition.

“There is a need to look at profitable growth and not just capacity deployment,” said Amitabh Malhotra, managing director at Rothschild Global Advisory in India. Malhotra said it would be tough to maintain a 20 to 25 percent growth rate as rising fuel costs bite.


News Source:

About author

TnH Global
TnH Global 4048 posts

Our platform is the most comprehensive, current and accurate content destination for tourism that also offers the opportunity to connect and network with quality buyers and sellers.

Name: TnH Global              Email:

You might also like


All new double decker Uday Express set to roll out next year

Come new year, railways is all set to roll out Uday Express, its ambitious new long distance double decker train. The trains will run on three routes-Coimbatore-Bengaluru; Bandra-Jamnagar and Visakhapatnam-Vijaywada.


Expansion by Indian carriers to help aviation sector overcome cash ban impact

National carrier Air India is set to reduce its aircraft loans after finance minister Arun Jaitley allocated Rs 1,800 crore toward retiring debt that has been raised to fund fleet


India’s 1st indigenous train with speed of 160 km/hr set to run by December 2018

A train set, much like a Delhi Metro rake, comprises of many coaches that are individually powered by a propulsion system, eliminating the need for a locomotive. India’s first indigenous

9.3% growth in foreign tourist arrivals in November 2016 over the same period in 2015

USA accounts for highest share of tourist arrivals followed by UK and Bangladesh in November 2016 Rs. 14,474 crore Foreign Exchange earned through tourism in November 2016 9.3% growth in


Korean Air adds Delhi in international route revamp

Korean Air unveiled plans for an overhaul of its international route map, including the introduction of a new direct service to Delhi. The non-stop flights linking Seoul’s Incheon International Airport


Air Costa, GoAir join SpiceJet with discounted fares

Air Costa, the regional carrier has lowered its fares by Rs. 555 for four days across nine domestic destinations as part of Republic Day celebrations. Budget airlines GoAir and SpiceJet


Indulge in Festive Fun this August in Frankfurt

Visitors are invited to take in the beautiful views of Frankfurt’s unique riverscape along the majestic River Main with the Main festival and enjoy the Frankfurt’s famous apple wine culture.

flydubai celebrates its 2nd anniversary in Mumbai

Airline continues to build trade and tourism links between Mumbai and Dubai Dubai-based flydubai today marked the second anniversary of its service between Mumbai’s Chhatrapati Shivaji International Airport and Dubai


Mandarin Oriental to manage luxury residences in Barcelona

 Mandarin Oriental Hotel Group has announced an agreement to brand and manage 34 luxurious Residences by Mandarin Oriental, Barcelona housed in a 20-storey tower, with a prime location at the intersection of Passeig

Top Stories

Leisure Hotels Group set to reopen its properties across all states

Announces Worry-Free Staycation for Travellers Introduces Special Packages With Stress Relieving Stays & Nourishing Experiences  Leisure Hotels Group (LH), a prominent hospitality chain in Northern India with Twenty-Seven (27) Hotels across


AAI inks performance MoU with civil aviation ministry

The Airports Authority of India (AAI) has signed its Annual Performance Contract (APC) for the year 2018-19 with ministry of civil aviation. The MoU was signed on April 27 between


Kempinski Grand Hotel appoints Indian specialty Chef Chhotu Kahatik

In terms of cuisine guests visiting the Swiss Alps resort of St. Moritz are spoilt for choice. Next to gourmet food, the restaurants in and around St. Moritz have summed


No Comments Yet!

You can be first to comment this post!