The Government is planning to build around 200 low-cost airports, with infrastructure a little bigger than a railway station, in smaller cities in the next 20 years. In addition to these, fifteen low-cost airports would be taken up in the next few years under the Greenfield Airport Policy. The government says small cities hold the promise for a second wave of growth in the civil aviation industry.
MRO opportunity
Civil Aviation Joint Secretary Mr G Asok Kumar said this will trigger a sharp increase in the aircraft fleet and the MRO (maintenance, repair and overhaul) business. He said it is time to tap the burgeoning demand from the tier II, and tier III cities that hold promise for the second wave of growth. He, however, refused to give a timeframe for the rollout of the plan, citing the Model Code of Conduct for the ensuing elections. “The proposals are under active consideration,” he asserted. The contribution from non-metro airports, which is pegged at 30 per cent now, is expected to grow to 45 per cent. This growth will result in increase in the number of aircraft operating in India to 1,000 from the present 400 by 2020. The country will add 370 aircraft worth $27 billion by 2017. This, in turn, would boost the MRO business, whose market size would go up ₹7,000 crore by 2020 from ₹2,250 crore in 2010.
Cost of operations
Addressing the India Aviation 2014 curtain-raiser press conference here on Monday, he said the aviation industry was poised to emerge as the third largest player after the US and China. He said it is high cost of operations that is hurting the civil aviation industry more. “These low-frills airports will significantly reduce the cost of operations. You can do well with infrastructure a little bigger than, say, a railway station,” he said. He, however, dodged a query on whether the government would do away with user charges for such airports. “Aviation Turbine Fuel (ATF) cost is very high in the country, putting heavy pressure on airlines. Also, dollar appreciation is also causing a problem as 70 per cent of the cost is in dollars,” Kumar said.
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