"Now, developers plan low-cost airports"

Monday, June 23, 2008

Now, developers plan low-cost airports
By Saurabh Sinha 
India - The Times of India

 
NEW DELHI - The financial turbulence that airlines are experiencing these
days due to soaring fuel cost, is pushing airport developers to think on
lines of building low cost airports. 

GMR Group is looking at this model, where efficient greenfield airports
could be built in smaller cities for anywhere between one-fifth to half the
cost of the Rs 2,500-crore airport it has built in Hyderabad. 

Such airports would mean lower charges for airlines, helping their survival
and also no extra charges for passengers that would help reverse the trend
of lower demand. Cities that already have an operational runway could get a
new low-cost terminal for as low as Rs 150 crore, said a senior GMR
official. 

This thinking comes shortly after airlines are bleeding heavily due to high
global oil prices and delayed payments to airports by them have become
common. Recovering costs of fancy airports through levy of user development
fee (UDF) has also become a touchy issue in these times of high surcharges
and taxes. 

"We are looking at developing very efficient basic airports with quality of
service is of highest standards. These airports would not have too many
fancy things, like perhaps one aerobridge for each million passenger traffic
annually," said the official. While the blueprint is being finalised, the
group estimates that in a city like Pune a low-cost airport could be built
for Rs 1,000 crore, while cities of size of Coimbatore, Amritsar or Udaipur
could get an airport for half this cost. 

The GMR group said it would be adding a low-cost terminal at its Hyderabad
airport once annual traffic reaches the 12-million mark by 2011-12. Delhi,
where the same group is modernising the IGI Airport, is also likely to get a
low-cost terminal. 

Interestingly, the demand for low-cost terminals was raised some months back
first by the pioneer of low-cost travel in India, Air Deccan founder Captain
G R Gopinath. He had even formed a consortia with some leading industry
players but the idea did not click then. 

But the record spurt in crude prices that has crippled the airlines
financially, has now given a fresh impetus to the idea. "Fancy airports can
either be built with government support or levying very high charges on
airlines and UDF on passengers. In the current scenario, this is
increasingly becoming a difficult option for cities where traffic is going
to be less than 10 to 20 million. So low cost but ultra efficient airports
are the need of the day," said an airline official. 

Creation of low-cost airports with economical charges has been a major
demand of Indian LCCs as they offer relatively cheaper tickets while paying
the same amount as airport charge as full service carriers.  

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