Smaller Cities on AAI's Development Radar

January 2020
Smaller Cities on AAI

The Airports Authority of India (AAI) in tandem with the government is developing airports across the country to add value to the aviation infrastructure. Improved connectivity will certainly boost the nation's economy.

Today, connectivity via the airports is seen as a vital element in the economic development of regions and cities. The Government of India and the Airports Authority of India (AAI) have been actively working to improve the aviation infrastructure in the country. And this improvement is visible not just across metros but is scripting the growth story of smaller cities.

Air transport is vital for tourism, particularly for remote and island destinations. Very often, it positively impacts the city's real estate development and business environment. The presence of an airport augments the city's image as a business destination thereby increasing the demand for commercial real estate as well. Several sectors are benefited by the development of airports. As per an International Civil Aviation Organisation (ICAO) study, the output multiplier and employment multiplier are 3.25 and 6.10, respectively.

Today's airports are not mere points of transit. They have evolved into hubs of shopping, work and other related commercial activities. Termed as aerotropolis, the self-sustainable entity has businesses that include, among others, manufacturing, logistics, e-commerce, destination retail, sports, entertainment, medical and wellness, and hotels.

Newer cities have started reaping the benefits of these greenfield developments. For example, the airport development at Surat, Rajahmundry, Prayagraj (Allahabad), Pakyong and Jharsuguda are few examples for regions that have immensely benefitted through airport development.

India is now counted among the high-density development markets in the world. According to data, the country has the fastest-growing aviation market in the world. As per Airports Council International (ACI), India leaped to third place worldwide in 2018 in terms of total passenger traffic, behind the US and China, thereby solidifying its status as a major aviation market. During 2018-19, all Indian airports taken together handled 345 million passengers - 70 million international and 275 million domestic - registering a growth of 11.6 per cent over 2017-18 fiscal.

To provide a big push to the civil aviation sector, the government in its Union Budget 2018 announced the "NABH Nirman" or Nextgen Airports for Bharat Nirman initiative. This scheme aims to increase the traffic handling capacity of airports by more than five times amounting to billion trips a year in the next 10-12 years.

In the Union Budget 2019-20, the government laid greater emphasis on investment-led growth. One of the prerequisites for investment-led growth is capital and asset recycling. Asset recycling can be utilised for funding development of new infrastructure without putting a strain on government finances. The union cabinet also cleared a mechanism for asset monetisation in 2018.

Accordingly, a group of officers under the chairmanship of CEO, NITI Aayog with secretaries of finance & economic affairs, civil aviation and Chairman AAI, were asked to monitor the progress of identification of assets for monetisation in the aviation sector within a reasonable period.

AAI is in the process of monetisation of its city side land as per the AAI Act. The act provides for planning, development, construction and maintenance of institutions and training centres, workshops, hotels, restaurants, guesthouses, warehouses and cargo complexes catering to the needs of passengers and air traffic services. Huge tracts of land on the city side have been identified for development purposes at Lucknow, Raipur, Tirupati, Jaipur, Bhubaneswar, Varanasi, Kolkata and Amritsar airports in the first phase. Construction of multi-level car park with commercial facilities has also been taken up at Chennai, Ahmedabad, Pune, Calicut, Jaipur and Amritsar.

India's future resides in the development of its tier-2 & 3 cities, which are now competing with metros. Having understood the power of these cities and the merits of decentralisation of development initiatives, AAI along with the Government of India has embarked on a mission to develop smaller airports. There has been a growth in the number of passengers in smaller cities. Cities such as Surat, Vijayawada, Tirupati, Prayagraj and Rajahmundry Airports have witnessed passenger growth rates of 82, 59, 43, 281 and 64 per cent, respectively, in 2018-19 over 2017-18.

The Ministry of Civil Aviation had come up with the National Civil Aviation Policy (NCAP), 2016, which lays greater emphasis on developing airports in smaller cities. The introduction of Regional Connectivity Scheme-Ude Desh Ka Aam Nagrik (RCS-UDAN) by the government in October 2016 accelerated the air traffic. So far, flights are operational from 44 unserved and underserved airports.

AAI has also developed a model for no-frills airports for smaller cities, which will provide essential services needed to operationalise airports. Following the concept of a modular building, the no-frills airport will consist of a pre-fabricated structure with maximum use of natural light and optimum commercial spaces. Energy-efficient technology for lighting, air-conditioning, water management, sewage treatment, etc., will be adopted. The airport will have a pre-fabricated ATC tower and fire station. Going ahead, fast-growing cities will register consistent growth in infrastructure. Therefore, AAI is also upgrading its airside infrastructure at a rapid pace with works like runway extension, strengthening and resurfacing of runways and setting up adequate ground installations like Instrument Landing System (ILS).

Around Rs 1 trillion ($14.5 bn) of investments are expected to be pumped into the civil aviation sector in the next five years. Out of this, AAI alone will invest Rs 250 billion ($3.6 bn) on infrastructure creation.

To create additional capacity, work is in progress in Port Blair, Agartala, Guwahati, Chennai, Lucknow, Dehradun, Leh, Trichy, Pune, Patna, Darbhanga (Civil Enclave), Kolhapur, Bareilly (CE), Jabalpur, Surat, Kanpur (CE) and Adampur (CE).

Development work is in the planning stage at Jaipur, Srinagar, Vijayawada, Agra, Indore, Goa, Ahmedabad, Bihta (CE), Bhubaneshwar and Varanasi. As many as 583 additional parking bays have been planned at various airports in the next five years for night parking of new aircraft being purchased by airline operators.

The major challenge in airport expansion is the availability of land. All efforts are being made in coordination with the state governments to augment existing land to facilitate expansion at airports. In case, no additional land is available alternative site is being looked at for the development of second airports.

Going ahead, while the decentralisation plan of AAI will work in favour of improving the country's infrastructure, plans for a second airport across major metros are already being envisaged and executed. A principal approval has already been given for the construction of 20 greenfield airports. Second airports are being constructed or planned in cities where the scope of further expansion at existing airports doesn't exist. These include Mumbai (Navi Mumbai), New Delhi-NCR (Jewar), Ahmedabad (Dholera), Goa (Mopa), Patna (Bihta), Pune (Purandar) and Vizag (Bhogapuram). There will be a time when air connectivity will be on the lines of the railways and will be accessible to all. And AAI will continue to help in building the nation's infrastructure and supporting the economy.

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