INTERNATIONAL OPERATORS WOULD EXPECT THE OVERHAULING ECOSYSTEM TO BE TRANSPARENT AND SIMPLER IN INDIA.

Dr. S.K. Mohanty

Managing Director, SM Consultants India

How optimistic are you about the government initiatives and policies in the airport sector, especially development of airports under the Public-Private Partnership (PPP) model?

Given that in 2018-19, only 13 of the total 113 operational airports under AAI made profits (according to an RTI response from AAI), PPP models are likely to be viable mostly for high traffic airports and may not attract entrepreneurs for airports in Tier-2 and Tier-3 cities.

Though minimum service is usually stipulated in such cases, complaints are plenty.  The service quality usually comes down as there will always be effort to cut corners in operation in these type of airports. In such cases, Threshold air traffic should always be mentioned.  The payment by the Concessionaire should be flexible and linked to the air traffic handled.

 The government intends to make India a global hub for Aircraft Maintenance, Repair and Overhaul (MRO) services. Also, the convergence between the Defense sector and the civil MROs will be established to bring down the maintenance cost of airlines. What is your take on this?

The dearth of MRO infrastructure in India compels most Indian carriers to carry out MRO in other Asian or European countries. However, the international operators would expect the overhauling ecosystem to be transparent and simpler in India. The rules, regulations, tax regime regarding overhauling in India are quite complicated to attract international operators.           

There is a need to complete the ongoing projects under the UDAN initiative in a time-bound manner. In addition, the existing capacity of international airports needs to be augmented under the International UDAN initiative. What measures do you think can help the government reach this target?

The UDAN scheme is an ambitious project to develop new/existing airports and to add new regional flight routes.  However much of tax payers money is pumped to subsidize the scheme. This may need to be taken up on cost to cost basis. The airports under UDAN scheme should be decided on the basis of traffic generation.

The system needs to be founded on a self-sustenance mode. Subsidy should not be provided by Government rather the operators should be provided with some leased properties or land to recover part of operation cost.

How do you see the adaptation of smart technologies for digital transformation of airports for the future like Internet of Things (IoT), Artificial Intelligence (AI), tracking system, automation, big data and advanced analytics?

Smart technologies at airports such as automated gates, facial recognition, automated luggage scanning, digital way-finding etc are likely to improve travel efficiency as well as shall completely transform the traveler experience. Contemplating International UDAN, it would definitely be the way forward to adopt smart technologies progressively at airports. The scale of implementation may differ for different categories.

What are the significant concerns/challenges/potential in the airport sector in terms of competitiveness, rising fuel factor, overcapacity, labour unrest, emergence of low-cost carriers etc.?

Low cost carriers are the bulk traffic carriers in the nation. Balancing competitiveness, cost efficiency and profitability is a challenge.

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