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Towards Urban Multi-Airport Systems

It is in the disconnect between the second airport plans for Mumbai and Delhi and work on the new airports for Bangalore and Hyderabad that the draft civil aviation policy seems to be flying blind. In the case of the former, a change in the "minimum 150 km separation" rule is being envisaged to facilitate a convenient second airport. In the latter, the government has already agreed to the private consortium's requirement to close existing airports once the greenfield airports are ready.

Towards Urban Multi-Airport Systems

It is in the disconnect between the second airport plans for Mumbai and Delhi and work on the new airports for Bangalore and Hyderabad that the draft civil aviation policy seems to be flying blind. In the case of the former, a change in the “minimum 150 km separation” rule is being envisaged to facilitate a convenient second airport. In the latter, the government has already agreed to the private consortium’s requirement to close existing airports once the greenfield airports are ready.

PHILIP S THOMAS

A
fter many false starts spanning nearly a decade, a draft civil aviation policy is again taxing for take-off. It seems to be in the final stage of getting cabinet clearances. Reportedly, there are glimmerings of an attempt to facilitate low cost traffic in the wake of the dramatic upsurge in “first time” air travel in the past few years. Thus, there is now some talk about multi-airport systems in metros like Mumbai and Delhi, a crucial factor in the development of low cost carriers (LCCs) elsewhere in the world. There is also some interest in upgrading/creating regional airports in tourist hubs in order to disperse traffic patterns in the country (since over 50 per cent of it is now reportedly concentrated on the Delhi-Mumbai sector).

However, on the flip side, airfares have already been hiked due to a fuel surcharge. And now there is a proposal to levy a flat cess of Rs 500 on all air tickets to create an Essential Air Services Fund. These moves will tend to apply brakes on the scorching 20 per cent per annum air traffic growth while simultaneously “skimming the cream” fiscally to boost government coffers. Perhaps the money from the cess (if it is the estimated Rs 1,000 crore a year), will provide ample resources to fund air services in the north-east, etc. It may also partially provide the Airports Authority of India (AAI) the resources to enter the big global business of airport development and operation (in India, for a start) with a concentration on airside (i e, runways, etc) and air traffic control aspects.

Thus, in the aftermath of the Mumbai and Delhi modernisation moves, there is talk of modernisation of Kolkata and Chennai airports on an urgent basis. In addition 35 non-metro airports are to be modernised in one go, starting in 2007, at a cost of about Rs 8,000 crore. As of now it is uncertain whether the Kolkata modernisation will be left to AAI as desired by the left political parties while Chennai opts for a Mumbai/ Delhi style privatisation arrangement. However, the “second” airports for these two metros are expected to follow the publicprivate-partnership (PPP) or joint venture route, like the greenfield airports for Bangalore and Hyderabad where construction is at present going on in full swing. In the event, AAI is going to be cash rich with funds from many directions including an approach to the capital market.

Disconnect

It is in the disconnect between the second airport plans for Mumbai and Delhi and the new airport work for Bangalore and Hyderabad that the draft civil aviation policy seems to be flying blind. In the former case, a change is being envisaged to the “minimum 150 km separation” rule to facilitate a convenient second airport. In the latter, the government has already agreed to the private consortium’s requirement to close existing airports (Hindustan Aeronautics (HAL) in Bangalore and Begumpet in Hyderabad which are ideal for low cost aviation) once the greenfield Bangalore International Airport (BIAL) and Hyderabad International Airport (HIAL) are ready, in keeping with the old rule.

In a rather anomalous move, the civil aviation minister has pushed the Bangalore consortium to accelerate the construction plans for BIAL to cope with the explosion in traffic. However, the option of revoking the clause to close the city’s HAL airport so that two facilities could operate in tandem to carry the higher load has, apparently, been overlooked due to “contractual obligations”! Why is the multi-airport sauce for the goose not sauce for the gander? Tellingly, the Bangalore consortium is prepared to spend an additional Rs 450 crore on the new exercise presumably to keep its monopoly intact. But for how long? The low cost airlines are believed to be making strong representations to the civil aviation minister to retain the HAL airport for their operations. And the left parties are agitating in Hyderabad for a similar deal.

Besides, why is the civil aviation ministry now trying to extract concessions from the new owners of Mumbai and Delhi airports for feeder airlines connecting small towns to the metros? Where is the sanctity of contractual obligations in this move? More importantly, how will this help in reducing the over-concentration of traffic at Mumbai and Delhi. The real need is to promote pointto-point flights of low cost carriers, bypassing the metros or using their secondary airports. The bull of urban multi-airport systems has to be grabbed by the horns.

Disruption and Reservation

In Goa too there is a similar problem. The state is a key tourist destination, both domestic and foreign. It accounts for practically 100 per cent of India’s charter tourist flights but sees hardly any scheduled international flights. Dabolim airport is controlled by the Indian Navy (just as HAL is by the Defence establishment and Begumpet is by the Indian Air Force). The military’s slot control regimes seem to have somehow allowed for the accelerated growth at Bangalore and Begumpet. Perhaps this is because IT naturally trumps tourism! But it may also be due to the fact that test flights of HAL’s military aircraft are not as much of an operational impediment to traffic growth as military flight training is at the other two civil enclaves. The result is that Dabolim airport has slipped slightly in the air traffic sweepstakes in recent times (though it is still probably among the only 10 profitable AAI airports).

To complicate matters further, Dabolim is slated to close once a new greenfield airport is ready (if and when that happens). This was decided by the union cabinet in a resolution six years ago, even before the BIAL and HIAL deals were finally inked! No doubt Goa is technically a state and not a “city”. But it is compact enough in

Economic and Political Weekly October 14, 2006

area and important enough socio-economically to be treated like one for air connectivity purposes rather than as a decorative military outpost that is far (in time and space) from conventional external threats. And the navy is building a huge submarine base at Karwar some 50-70 km away which could conceivably reduce Dabolim’s military flight training load, if an airfield is built there as originally planned. The Navy’s dedicated air station in Cochin could also putatively perform this function. It will be recalled that CIAL came into being there in the 1990s, going “greenfield” via PPP as AAI had to opt out of the old military facility which could not accommodate the bigger passenger planes due to the terrain limitations of the island.

What is questionable is the distinct possibility that Begumpet, HAL and Dabolim will, when closed to the “aam admi of the air”, stay open to serve VVIPs (and the odd VIP flying around in the growing fleet of business jets), on “security” grounds, just as the “technical area” of Palam did in Delhi. In this connection, the prime minister’s cautionary views about factoring in the effects of disruption on “development” (in the aftermath of the recent headlines over the Narmada dam controversy), needs to be taken seriously in airport development policies too. The arbitrary disruption of the civilian economy by the closure of thriving civil enclaves at military air bases to enable the building of greenfield airports usually at a considerable distance, can and must be replaced by the systematic redeployment of the military to more remote areas, thus spearheading economic development.

In a reverse twist it is believed that the military is devising a plan to piggyback on thriving civilian airports on the (perhaps self-serving) pretext that the economically vital assets in their vicinity are in special need to be defended from close range. Thus IAF is reportedly eyeing facilities in Ahmedabad airport when it already has bases in Jamnagar, Vadodara, Bhuj, etc. On the basis of this argument the military need never shift from centres like Pune, Dabolim, etc. This is questionable. Facilities can always be commandeered in emergencies. And as stated earlier, for the long-term, the military needs to locate (now or in future) in remote areas from where national assets (military and civilian) can be defended just as effectively. At the very least, the military should desist from using any “infiltrated” urban airports for flight and armament training purposes in peace time. Flight training not only locks up take-off and landing slots which are valuable for low cost aviation but also poses a safety hazard for dense residential and other localities. Likewise, armament training also poses a major safety hazard.

Thus while no policy can be completely watertight, pundits should examine closely the actual extent to which the draft civil aviation policy helps to “demilitarise” our nation’s economically vital airport facilities in the long overdue bid to upgrade the aviation sector (without, of course, compromising on genuine security needs).

Regulatory Regime

Last but not the least, there is an urgent need to think ahead about the kind of regulatory regime that needs to be established to ensure multiple airport systems work for the long haul. In other words, the functioning of one airport should not render the other(s) redundant over time. For this, first and foremost, thought has to be given to the nature of the traffic sharing that is envisaged. It may be helpful in this connection to plan more in terms of “primary” and “secondary” airports rather than specialised “international” and “domestic” facilities as per conventional wisdom, or even “global hubs” and “regional hubs” in recent thinking. Both airports can and should have a suitable mix of international and domestic traffic to meet passenger needs for connectivity and, more importantly, to ensure long-term viability (i e, subject to the associated costs). Thus secondary airports can and should have a significant amount of international traffic while primary airports would, no doubt, have substantial amounts of both. The problem is that new airports are almost automatically visualised as primary airports and there is a tendency to go overboard on their design in a bid to make up for lost time.

The recent announcement of plans for “second airports” for Kolkata and Chennai introduces another wrinkle in the regulatory regime because it seems to be mixed up with a system of competitive bidding that is different from the Mumbai and Delhi “upgrades”. A system of the “lowest tariff wins” is planned as against the previous one of the “highest revenue share wins”. All this seems to suggest the need for a more localised rather than purely centralised regulatory regime, one which is more amenable to the extensive benchmarking that would be required. But one consequence would be that states would have to be given as much of a say, de jure, as the centre has in civil aviation. This may be more consistent with leading edge US regulatory practice.

Parenthetically, there is some controversy as to whether an Aviation Economic Regulatory Authority as proposed by the draft civil aviation policy is redundant when there is already a Competition Commisssion. How does the situation compare with the creation of the Telecom Regulatory Authority of India (TRAI) and any other sectoral regulatory agencies? Nearer to the present subject, how was the 150 km separation rule applied in the case of Kerala state’s three existing airports and especially the fourth one (at Kannur) which has reportedly been approved?

Real Intention?

However, what is worrisome is the reported plan in the case of Kolkata and Chennai to upgrade the existing airports so as to explicitly prolong the need to build a second airport. Ironically this, in effect, is what was envisaged with Goa’s new airport (at Mopa), namely, to render Dabolim redundant even if, somehow, it remained open. The resultant war cry of the opposing camp, “Dabolim forever, Mopa never”, says it all. The mid-stream upgrade of BIAL referred to above also conforms to this pattern. Thus only Mumbai seems to be genuinely in need of a second airport perhaps due to the severe space constraint it faces. Delhi’s inclusion is largely on “political” gounds, i e, to stay on par with Mumbai even if there is the problem of non-parallel runways to be sorted out to cope with the pressure of the impending Commonwealth Games. So the question is: Does the civil aviation ministry really want multi-airport systems in order to expand low cost aviation or is it just flying by the seat of its pants? Unfortunately, the answer may well be the latter.

Thus the real intention of the planned “scrapping” of the 150 km separation rule has become clearer. It is not to open the floodgates for the building of second airports around the country. It seems to be specifically intended to facilitate the creation of second airports for Mumbai and Delhi only. All others (including those for Kolkata and Chennai) may not be as automatic.

EPW

Email: phlp_thms@hotmail.com

[Thanks are due to Rishikesha T Krishnan forguidance and encouragement. However, he is notresponsible for any residual deficiencies in thearticle.]

Economic and Political Weekly October 14, 2006

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