Airports January 2016

AIRPORTS
JANUARY 2016
For updated information, please visit www.ibef.org
AIRPORTS
Executive Summary.3
Advantage India... 5
Market Overview & Trends........ 7
Porter Five Forces Analysis ...20
Strategies Adopted.. 22
Growth Drivers......... 24
Opportunities.....36
Success Stories.... 38
Useful Information.........................41
JANUARY 2016
AIRPORTS
EXECUTIVE SUMMARY (1/2)
CAGR: 41.02%
Third largest aviation market by

2020
421
106.45
2016*
By 2020, passenger traffic at

Indian airports is expected to
increase to 421 million from
106.45 million in 2016*
2020
million
CAGR: 12.79%
Travel & tourism to be

contributing USD475.43 billion
to GDP by 2025
475.43
The travel & tourism industry is

forecast to grow 12.79 per cent
to USD475.43 billion in 2025
from USD142.65 billion in 2015
142.65
2015
2025E
USD billion
192.83
97.20
Business & leisure travel to

boost growth
19.34
2015
36.53
2025E
Leisure Travel & Tourism spending (in USD Billion)

Business Travel & Tourism spending (in USD Billion)
JANUARY 2016
Spending on business travel is

estimated to increase to
USD36.53 billion in 2025 from
USD19.34 billion in 2015, while
that on leisure travel is forecast
to rise to USD192.83 billion in
2025 from USD97.20 billion in
2015
Source: World Travel and Tourism Council, Airport Authority of India, TechSci Research
*-Data is for April-September 2015; E - Estimated
AIRPORTS
EXECUTIVE SUMMARY (2/2)
CAGR: 0.6%
By 2030, Indias working

population to be thrice the total
population in the US
900
825
2015
Working population (aged

between 15 and 64 years) is
estimated to increase from 825
million in 2015 to 900 million by
2030, almost three times the
US population
2030
million
CAGR: 10.8%
By 2016, Indias middle income

class to be triple the total
population in Germany
267
160
2011
Indias middle income population

is expected to increase from 160
million (over 50 per cent of the
total population in the US) in
2011 to 267 million by 2016
equivalent to over three-times
Germanys population
2016
million
Source: World Travel and Tourism Council, Asian Development Bank, TechSci Research
JANUARY 2016
AIRPORTS
ADVANTAGE INDIA
JANUARY 2016
AIRPORTS
ADVANTAGE INDIA
FY00
No of
operational
airports: 50
Robust demand
Growing
demand
Rising
working group
and widening
JANUARY 2016
Growth in aviation accentuating

demand for MRO facilities
middle class demography is

expected to boost demand
India plans to increase the number

of airports to 250 by 2030 to cater
to growing leisure and business
travel
Expenditure in MRO accounts for

13-15 per cent of total revenues; it
is the second-highest expense after
fuel cost
Freight traffic also likely to go up as

trade with the rest of the world
increases
By 2020, the MRO industry is likely

to grow over USD1.5 billion from
USD0.5 billion currently
Increasing investments
Opportunities in MRO
Advantage
India
Investments totaling USD12.1

billion in the airport sector are likely
to be made during the Twelfth Five
Year Plan (2012-17); of these,
private investments are expected to
total USD9.3 billion
Growing private sector participation
through the Public - Private
Partnership (PPP) route
FY16*
No of
operational
airports: 90
Policy support
The government has been encouraging

private sector participation
Tax incentives for developers;

liberalisation of the aviation sector
Open Sky Policy
Government has allowed 49 per cent FDI

in aviation for foreign carriers, while
NRIs are allowed to pick up 100 per
cent equity in airlines
Source: Ministry of Civil Aviation, MRO India, TechSci Research

Notes: FDI Foreign Direct Investment, MRO Maintenance, Repair and Overhaul; FY Indian Financial Year (April March); *-Data is
till September 2015
AIRPORTS
MARKET OVERVIEW AND TRENDS

JANUARY 2016
AIRPORTS
EVOLUTION OF THE INDIAN AVIATION SECTOR
India is the ninth largest civil aviation market in the world
India ranks fourth1 in domestic passenger volumes (80.16 million2) as of FY16*
Indias civil aviation market is set to become the worlds third3 largest by 2020 and expected to be the largest by 2030
Scheduled airlines: distance

flown (mn km)
199
889.29
(FY154)
Non-scheduled airlines in
operation
39
122
(FY15)
Number of aircrafts
225
1,649
(FY14)
Passenger handling
capacity at airports
66 million
270 million
(FY14)
Number of airports
50
125
(FY15)
2000
Source: Airports Authority of India, Ministry of Statistics and
Programme Implementation, Ministry of Civil Aviation, TechSci Research
Notes: 1 India ranks after US, China and Japan, 2 Data for FY16, 3 India ranks after the US and China,
4 Data is for Financial Year; FY Indian Financial Year (April March), mn km Million Kilometers
* - Data is for April-September 2015
JANUARY 2016
AIRPORTS
INDIA HAS 464 AIRPORTS AND AIRSTRIPS, OF WHICH 125 AIRPORTS ARE OWNED BY AAI
Non-operational
(9)
Domestic airports
(66)
Operational (90)
Customs airports
(7)
Civil enclaves
(26)
International (17)
AAI managed
(125)
Airports and
airstrips in India
(464)
Non-AAI airports
and airstrips
(339)
Aircraft Movement 20.80%
Passenger Traffic
24.70%
Freight Traffic
0.2
0.4
International
JANUARY 2016
Airports Authority of India (AAI) was

Established in 1994 under the Airports
Authority Act
Responsible for developing, financing,
operating, and maintaining all government
airports
The Aircraft Act (1934) governs remaining

airports
75.30%
61.74%
Activity in AAI
airports - shares (%)
FY16*
79.20%
Basic facts
38.26%
0.6
Domestic
0.8
1.2
Source: Airports Authority of India, TechSci Research
Notes: AAI Airports Authority of India, JV Joint Venture,
FY Indian Financial Year (April March)
AIRPORTS
SIX MAJOR AIRLINES OPERATE IN THE COUNTRY
Spicejet
Market share: 11.6%
Passenger load traffic: 93.2%
92.00%
Indigo
Market share: 38.40%
90.00%
Passanger Load Factor
88.00%
86.00%
GoAir
Market share: 8.70%
84.00%
Jet Airways
Market share: 21.90%
82.00%
80.00%
Jetlite*
Market share: 4.30%
Air India
Market share: 15.8%
78.00%
-5.00%
76.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Market Share
JANUARY 2016
Note: Market Share as on August15 and Load Data for the month of
August15 as published by Directorate General of Civil Aviation
* - Data is for April15
10
AIRPORTS
THE SIX MAJOR AIRPORTS IN THE COUNTRY
Delhi
Passenger traffic handled in
FY15: 40.9 million;
FY16*: 22.8 million
Kolkata
FY15: 10.9 million;
FY16*: 5.97 million
Mumbai
Passenger traffic handled in;
FY15: 36.6 million;
FY16*: 20.4 million
Bengaluru
FY15: 15.4 million;
FY16*: 23.5 million
Hyderabad
FY15: 10.4 million
FY16*: 6.0 million
Chennai
FY15: 14.3 million;
FY16*: 7.6 million
Source: AAI, TechSci Research
Note: FY Indian Financial Year (April March)
* - Data is till September 2015
JANUARY 2016
11
AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (1/2)
Passenger Traffic
106.45
190.1
169.03
159.4
162.31
143.43
123.76
108.88
96.49
Growth in passenger traffic has been strong since the new

millennium, especially with rising incomes and low-cost
aviation; passenger traffic expanded at a CAGR of 3.8 per
cent over FY0616*
200
180
160
140
120
100
80
60
40
20
0
73.35
Passenger traffic increased by 12.47 per cent in FY15
116.87
Passenger traffic in FY16*
Total passenger traffic stood at a 106.45 million in FY16*
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
Growth rate
Source: Association of Private Airport Operator, TechSci

Research, Notes: CAGR Compound Annual Growth Rate,
JANUARY 2016
12
AIRPORTS
PASSENGER TRAFFIC HAS EXPERIENCED HEALTHY GROWTH (2/2)
139.3
20.00%
51
80.16
122.41
47
116.37
43
121.51
41
105.52
38
89.39
34
77.3
32
87.06
30.00%
10.00%
0.00%
-10.00%
26
60
40.00%
30
12th Plan Period
50.00%
70.62
Growth in passenger traffic set to remain strong in future
200
180
160
140
120
100
80
60
40
20
0
26
International passenger traffic posted a CAGR of 1.6 per

cent over FY06-16* and is set to touch 60 million by FY17
Growth in domestic passenger traffic has been robust
22 50.98
Domestic passenger traffic expanded at a CAGR of 4.6 per

cent over FY0616*; by FY17 domestic passenger traffic is
expected to touch 209 million
-20.00%
11th Plan Period
41
10th Plan Period
209
26
122
14
FY07
FY12
Domestic
Growth-International(%)
Growth-Domestic(%)
During FY15, domestic passenger traffic increased by

13.80 per cent compared to 5.19 per cent in FY14
71
26
FY02
International
FY17E
International Passenger Throughput International (million)
During FY15, international passenger traffic increased

by 8.97 per cent compared to 8.34 per cent in FY14
Domestic Passenger Throughput Domestic (million)

Source: Airports Authority of India, Ministry of Civil Aviation, TechSci Research
Notes: YoY Year on Year, FY Indian Financial Year (April March)
JANUARY 2016
13
AIRPORTS
FREIGHT TRAFFIC GREW AT A CAGR OF 6.2 PER CENT DURING FY06 TO FY14 (1/2)
International freight traffic was 61.8 per cent of
the total in FY16*
Total freight traffic registered a CAGR of 6.7 per cent over

FY06-15
986
840
784
15.00%
10.00%
5.00%
0.00%
832.00
1542
1440
1407
1468
1496
515
552
689
1271
500
1149
1000
530
1500
568
852
2000
812
20.00%
1147
By 2023, total freight traffic is expected to touch 4.14 million

tonnes growing at a CAGR of 7.27% between FY2016-23.
In addition, International freight traffic is expected to grow at
a CAGR of 7.13% while Domestic freight traffic is expected
to grow at a CAGR 7.50% between FY2016-23.
25.00%
2500
1023
During FY15, domestic freight traffic at 0.98 million

increased by 17.38 per cent while international freight traffic
at 1.5 million increased by 7.08 per cent compared to FY14.
30.00%
484
In FY16*, domestic freight traffic was 0.51 million tonnes,

while international freight traffic was at 0.83 million tonnes
3000
920
Domestic freight traffic increased at a CAGR of 0.6 per cent

over FY06-16* while international freight traffic rose 5.9 per
cent over FY06-15
-5.00%
-10.00%
International('000 Tonnes)
Domestic ('000 Tonnes)
Growth-Domestic(%)

- Data is for April-September 2015
JANUARY 2016
14
AIRPORTS
AND IS POISED TO GROW FURTHER (2/2)
Freight traffic is expected to be five times the current level
by the end of the next two decades. It is expected to be 11.4
million tonnes by 2032
Growth in import and export in India will be the key driver for
growth in freight traffic as 30 per cent of total trade is
undertaken via airways
Freight traffic (million tonnes)

3
25%
2.5
20%
15%
10%
1.5
5%
1
1.35
2.53
2.28
2.19
2.28
2.35
1.96
1.7
1.72
1.4
0.5
1.55
0%
-5%
-10%
Freight Traffic(Million tonnes)
Growth

*- Data is for April-September 2015
JANUARY 2016
15
AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (1/2)
Total aircraft movement (million)
Total aircraft movement recorded a CAGR of 5.1 per cent

over FY07-15
20.00%
15.00%
10.00%
0.87
1.61
1.54
1.48
1.54
1.39
1.33
5.00%
1.31
In FY16*, total aircraft movement stood at 0.87 million
25.00%
1.31
In FY15, total aircraft movement increased by 4.5 per cent

to 1.6 million
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1.08
Both international and domestic aircraft movement have

nearly doubled over this period
0.00%
-5.00%
-10.00%
Total Aircraft Movement
Growth
Source: Association of Private Airport Operators,

Airports Authority of India, TechSci Research
Notes: CAGR Compound Annual Growth Rate
*- Data is for April-September 2015
JANUARY 2016
16
AIRPORTS
GROWTH IN AVIATION HAS ALSO LED TO HIGHER AIRCRAFT MOVEMENT (2/2)
Domestic aircraft movement increased at a CAGR of 4.86
per cent over FY07-15 while international aircraft movement 1800
expanded 6.07 per cent (CAGR) over the same period
1600
Aircraft movement growth

25.00%
20.00%
1400
15.00%
In FY15, domestic aircraft movement increased by 4.94 per 1200

cent, while international aircraft movement expanded by 1000
3.02 per cent
800
10.00%
5.00%
600
During FY15, the total number of domestic aircraft

movement increased to 1.3 million, an increase of 4.94 per
cent compared to FY14
0.00%
400
-5.00%
200
0
-10.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*
During FY15, the total number of international aircraft

movement increased to 0.35 million, an increase of 3.02 per
cent from FY14
In FY16*, domestic aircraft movement stood at 0.689
million, while international aircraft movement stood at 0.181
million
JANUARY 2016
International('000)
Domestic('000)
Growth-Domestic(%)
Source: Association of Private Airport Operators, TechSci Research

Notes: YoY Year on Year; FY Indian Financial Year (April March)
*-Data is for April-September 2015
17
AIRPORTS
AAI DOMINATES, BUT PRIVATE SECTOR PARTICIPATION IS RISING
Until 2013, AAI was the only major player involved in developing and upgrading airports in India
Post liberalisation, private sector participation in the sector has been increasing
Private sector investment is expected to increase to USD9.3 billion during the Twelfth Five Year Plan from USD5.5 billion in
the previous plan
Development of Hyderabad International Airport; modernisation
of Delhi International Airport
Modernisation of Mumbai International Airport
Development of Bengaluru International Airport

Major private
sector players
Development of Simoga and Gulbarga airports in Karnataka

Note: AAI Airports Authority of India
JANUARY 2016
18
AIRPORTS
NOTABLE TRENDS IN THE AIRPORTS SECTOR
Rising private
participation and
Investments
Currently, five international airports have been completed successfully under PPP mode
Investment made by the private sector during the Twelfth Five Year Plan (201217) is
expected to increase by 69.1 per cent to USD9.3 billion over that during the Eleventh Five
Year Plan
Four existing airports and two greenfield projects will be offered on PPP basis which is
expected to attract investments from private players
Greater use of nonscheduled airlines
Rising business activity leading to higher demand for non-scheduled airlines

122 operators with combined fleet of 406 aircrafts in FY15
User development fees
Increasing use of development fees by airport developers and operators

Airport Development Fee: Delhi, Mumbai airports to fund expansion
User Development Fee: Hyderabad, Bengaluru airports for maintenance
Focus on nonaeronautical revenue
Indian airports are emulating the SEZ-aerotropolis model to enhance revenues; focus on
revenues from retail, advertising, vehicle parking, etc.
Absence of complementary meals in low-cost airlines have boosted the food and
beverages retail segment at airports
Source: DGCA
JANUARY 2016
19
AIRPORTS
PORTER FIVE FORCES ANALYSIS

JANUARY 2016
AIRPORTS
PORTERS FIVE FORCES ANALYSIS
Competitive Rivalry*
Competition among major players is very high, especially in LCCs (Low cost
carrier) section because the airlines compete for the middle income group
customers and passengers of air-conditioning segment of railways. This group
has low brand loyalty and is highly price sensitive
Competition might intensify further in LCC segment with Air Asia India being
granted DGCAs operator license
Threat of New Entrants*
Threat remains low because of the

nature of the industry (Regulatory
hurdles, Capital-intensive)
Air Asia India has been granted
DGCA approval (Price War)
Substitute Products*
Bargaining Power of Suppliers*
Bargaining power of suppliers

remain high as there are only few
fuel and aircraft suppliers
Talent pool of pilots, engineers and
other staff is also limited
Threat of New
Entrants
(Low)
Threat remains low in this sector

also as no other means of
transport is as swift, and
convenient as airlines
It saves time
Bargaining Power of Customers*
Bargaining power of customers

remains low as the demand for low
cost air travel is quite high
The costs of switching airplanes
and services offered hardly differ
with each other
Bargaining
Power of
Customers
(Low)
Competitive
Rivalry
(High)
Substitute
Products
(Low)
Bargaining
Power of
Suppliers
(High)
Source: Central Asia-Pacific Aviation, TechSci Research

Note: *(Notes w.r.t airlines)
JANUARY 2016
21
AIRPORTS
STRATEGIES ADOPTED
JANUARY 2016
AIRPORTS
STRATEGIES ADOPTED*
Expansion
LCC segment is poised to grow, led by plans of induction of an additional 20 aircrafts on domestic
routes by the second half of FY14
Expansion of CAPA
Further, rise of LCCs was also supported by the exit of Kingfisher, which created a void
Capacity will also increase with new terminals coming up in Mumbai, Bengaluru, Chennai and
Kolkata
Indian carriers to double their fleet capacity by 2020 to around 800 aircrafts
Indian LCCS are looking forward to increase their ancillary services, without tampering their
business models. This includes services like lounge access, priority boarding, customer loyalty
memberships and customer meals
Both Indigo and GoAir are eyeing a larger share of corporate market
Ancillary services
Indian LCCs are expected to increase their regional, international (Asia-pacific, Middle East)
operations
Indian LCCs are looking forward to increase their low cost products on routes which will take up to
four hours (shorter international routes)
This will allow deleveraging of domestic fleet, increasing aircraft utilisation and improving commercial
performance
Chennai, with its strategic location in South India has a strong potential to become a hub, with
connecting flights to Gulf and across South East Asia
Increasing operations
Governments push
Although India is heavily characterised by LCCs, there is shortage of low cost airports. Government
has plans to develop around 100 low cost airports, which will significantly lower the operating costs
NIAMAR (National Institute of Aviation Management and Research) has been developed to bridge
the supply gap of aviation personnel
Source: Central Asia-Pacific Aviation, TechSci Research

Note: *(Notes w.r.t airlines), LCC Low Cost Carrier
JANUARY 2016
23
AIRPORTS
GROWTH DRIVERS
JANUARY 2016
AIRPORTS
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS
Growing demand
demand
Growing
Increasing
investments
Policy support
Strong
government
support
Greater
government focus
on infrastructure
Expanding middle
income group and
working population
Inviting
Resulting in
Rising domestic
and foreign
tourists and
travellers
Increasing
liberalisation,
Open Sky Policy
Strong growth in
external trade
Policy sops, FDI

encouragement
JANUARY 2016
AAI driving large

modernisation,
development
projects; expansion
and upgradation of
existing airports;
development of
low-cost airports
Increasing private
sector
participation,
increasing
greenfield projects
Strong projected
demand making
returns attractive
25
AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (1/2)
10,000
12
8,000
10
8
6,000
6
4
8,027
7,411
6,796
4,948
4,686
3,457
3,141
2,914
2,000
2,789
4,000
2,509
Per capita income is expected to increase at a CAGR

of 13.5 per cent during 2005-2015
The population belonging to the working age group
(1564 years), at 65.7 per cent of the total population
currently, is expected to grow; this indicates the
employee base and the frequency of business travel
are expected to increase
GDP growth and per capita income
2,260
Rising per capita income and growing working

population
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Gross domestic product based on purchasing power parity (PPP)
per capita GDP (in USD)
Real GDP Growth Rate (%)
Source: IMF, World Travel and Tourism Council, TechSci Research
Note: E - IMF estimates
JANUARY 2016
26
AIRPORTS
PASSENGER TRAFFIC SPIKES UP AS DEMAND FOR AIR TRAVEL SOARS (2/2)
Travel and tourism spending (USD billion)
Rising domestic and foreign tourists
JANUARY 2016
77.87
26.4
20.80
17.78
19.10
68.7
69.3
25.5
2008
22.3
48.7
2007
CAGR: (1.81%)
18.6
46.2
42.1
24.4
India is one of the fastest growing economies

Business travel & tourism spending decline by CAGR
1.81% between 2007-15.
Emergence of business hubs like Mumbai (Finance),
Bengaluru (IT), Chennai (IT), Delhi (Manufacturing, IT)
Business travel market grew to USD28.8 billion in
2015 from USD24.9 billion in 2014, making India the
10th largest business travel market in the world in
2015.
40
60.9
80
60
More business travellers as well
CAGR: 10.85%
90.16
100
96.01
120
22.1
Improving tourism infrastructure

Successful ad campaigns abroad
The share of travel & tourism in Indias GDP showed
7.5 per cent growth in 2015; and is expected to grow
by 7.3 per cent per annum by 2015-2025E
2009
2010
2011
2012
2013
2014
2015
20
0
Leisure Travel & Tourism Spending( In USD Bn)
Business Travel & Tourism Spending(In USD Bn)
Source: World Travel and Tourism Council,

Make in India, Global Business Travel Association, TechSci Research
Notes: IT Information Technology, F Forecast
27
AIRPORTS
MORE PASSENGERS AND RISING TRADE AIDING HIGHER AIRCRAFT MOVEMENT
FDI in aviation and

liberalised aviation
policy
FY14
FY15
100
0
FY11
FY12
Exports
Increasing airline
operators
FY13
2.13
1.02
FY10
309.56
447.52
FY09
314.41
450.20
200
490.74
300
300.40
400
178.75
288.37
500
249.82
369.77
600
185.29
303.69
Over FY09-15,
Indias exports expanded at a CAGR of 8.93
per cent to USD309.5 billion in FY15.
Imports registered a CAGR of 6.68 per cent
which has reached to USD447.52 billion in
FY15
In FY16*, Indias imports and exports were
USD1.02
billion
and
USD2.13
billion
respectively
Growing trade augurs well for airports as they handle
about 30 per cent of Indias total trade (by value)
305.96
489.32
Rising exports and imports (USD billion)
Growing trade benefits of freight movement
FY16*
Imports
Source: Ministry of Commerce, TechSci Research

Notes: CAGR Compound Annual Growth Rate,
*-Data is for April-August 2015
Higher aircraft
movement
Growth in passenger
traffic
JANUARY 2016
Rise in freight traffic
28
AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (1/2)
Greater focus on
infrastructure
Government of India (GOI) envisions airport infrastructure investment of USD11.4 billion

under the Twelfth Five Year Plan (2012-17)
The Ministry of Civil Aviation has approved annual planned outlay of USD1.6 billion for
FY14 for the development of airport infrastructure
Liberalisation, Open
Sky Policy
Encouragement to FDI
With the opening of the airport sector to private participation, six airports across major
cities are being developed under the PPP model
Currently, 60 per cent of airport traffic is handled under the PPP model, while the
remaining 40 per cent is managed by the AAI
Increased traffic rights under bilateral agreements with foreign countries
100 per cent FDI under automatic route for greenfield projects
100 per cent FDI for existing airports is also possible with an approval from FIPB
Approval of 49 per cent FDI in aviation for foreign carriers
Notes: India currently has bilateral air service agreements with 104 countries. These include Brazil, 27 members of the EU, and
China. In 2008 traffic rights were been enhanced with Mexico, Saudi Arabia, Netherlands, Qatar, Iran, Japan and Turkey,
FDI Foreign Direct Investment, FIPB Foreign Investment Promotion Board
JANUARY 2016
29
AIRPORTS
POLICY SUPPORT AIDING GROWTH IN THE AIRPORTS SECTOR (2/2)
Taxes and duties
100 per cent tax exemption for airport projects for a period of 10 years
Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers are exempted
completely from customs and countervailing duties
Budgetary support
In the Union Budget for FY13, the Finance Minister has proposed budgetary support worth
USD58.3 million to AAI to develop airport infrastructure in the North-Eastern states of India
At the same time, the aviation regulator DGCA has been allocated USD12.5 million for its
development plan
In the Union Budget for FY15, Finance Minister has said that there are 7 airports under
construction which includes Guwahati, Dibrugarh, Silchar, Agartala, Shillong, Imphal, and
Dimapur. India also plans to build 200 low-cost airports in the next 20 years to connect
tier-II and tier-III cities in the country
In the Union Budget for FY16, budgetary support of USD13.27 million has been allocated
to the Civil Aviation Sector out of which USD3.65 million has been attributed towards
Pakyong, Sikkim project
Source: Ministry of Civil Aviation
Notes: AAI Airports Authority of India,
DGCA Directorate General of Civil Aviation,
JANUARY 2016
30
AIRPORTS
AAI LEADS THE WAY IN AIRPORTS INFRASTRUCTURE INVESTMENT
Metro airports
The AAI aims to bring around 250 airports under operation across the country by 2020
The AAI has developed and upgraded over 23 metro airports in the last five years
Non-metro airports
The Airports Authority of India (AAI) is planning to spend USD1.3 billion on non-metro
projects over the five years (201317); it is mainly focusing on the modernisation and up
gradation of airports; New airports at Itanagar, Kohima and Gangtok are also planned
The Government of Andhra Pradesh plans to develop greenfield airports in six cities
(Nizamabad, Nellore, Kurnool, Ramagundam, Tadepalligudem, and Kothagudem) under
the PPP model
Upfront subsidy has been proposed through which non-metro airports would be funded by
imposing 2 per cent levy on both domestic and international airfares
Northeast India
Over 30 airport development projects are under progress across various regions in
Northeast India
AAI plans to develop over 20 airports in tier II and III cities in next five years
The AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and
Dibrugarh as intra-regional hubs
Source: TechSci Research
JANUARY 2016
31
AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (1/2)
Recourse to the Public Private Partnership (PPP) model has boosted private sector investments in airports
PPP route for five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) most noteworthy
On December 31, 2014, Government of India decided to transfer four existing airports (Chennai, Kolkata, Ahmedabad and
Jaipur) and two greenfield airport projects(at Navi Mumbai and Goa) into PPP model in order to attract investments from
private players.
Increasing share of private sector in equity component of major airports

74 per cent private share holding in IGI Airport (Delhi) - owned majorly by GMR (54 per cent),
Fraport AG (10 per cent), Eraman Malaysia (10 per cent); rest of the shares owned by
Airports Authority of India
74 per cent private shareholding in CSI Airport (Mumbai) - owned majorly by GVK (50.5 per
cent), Bid Services Division (Mauritius) Limited (13.5 per cent), ACSA Global (10 per cent);
rest of the shares owned by Airports Authority of India
74 per cent private shareholding in RGI Airport (Hyderabad) - owned majorly by GMR (63 per
cent), Malaysia Airports Holdings Berhad (11 per cent); rest of the shares owned by
Government of India (13 per cent) and Government of Andhra Pradesh (13 per cent)
74 per cent shareholding in Kempagowda International Airport (Bengaluru) owned majorly
by Siemens Project Ventures, Germany (40 per cent), Unique (Flughafen Zurich AG) Zurich
Airport, Switzerland (17 per cent), Larsen & Tourbo, India (17 per cent); rest of the shares
owned by Airports Authority of India (13 per cent) and KSIIDC, which is an agency owned by
the state of Karnataka, India (13 per cent)
Note: KSIIDC Karnataka State Industrial and Infrastructure Development Corporation Ltd.
JANUARY 2016
32
AIRPORTS
PRIVATE SECTOR INVESTMENT IN AIRPORTS RISING (2/2)
Delhi
(Modernisation,
Terminal 3)
Participation in
international
airport projects
Mumbai
(Modernisation)
Hyderabad
Terminal 3
construction in
Delhi completed in
2010
Terminal 3 - Total
cost
PPP format likely to

continue
Shimoga Airport
15 greenfield
projects with
private sector
participation has
been approved
in May 2015
USD2.7 billion
Bengaluru
(including Terminal 3
and 1- D)
Bijapur Airport
USD5.8 billion of
investments likely;
USD6.1 million of
investments has
been approved for
Shimoga Airport in
July 2015
Hassan Airport
Gulbarga Airport
Mopa Airport, Navi
Mumbai Airport, Shirdi
and Sindhudurg
Airports, Kannur and
Aranmula Airports,
Durgapur Airport,
Dabra Airport,
Pakyong Airport,
Karaikal Airport and
Kushinagar Airport
JANUARY 2016
33
AIRPORTS
SUCCESSFUL PPP AIRPORTS IN INDIA
Presently India has five PPP airports each at Mumbai, Delhi, Cochin, Hyderabad and Bengaluru, which together handle over
60 per cent of countrys air traffic
Government of India has approved 15 greenfield PPP projects which are expected to increase the air traffic in India. These
projects would be setup in Goa, Navi Mumbai, Maharashtra, Bijapur, Gulbarga, Karnataka, Kerala, West Bengal, Madhya
Pradesh, Sikkim, Puducherry and Uttar Pradesh.
Name of airport
Operator
Type of project/
PPP structure
Revenue sharing
Chhatrapati Shivaji
International Airport
Mumbai International Airport Ltd

(MIAL)
Brownfield/BOOT
38.7 per cent of gross revenue to be

shared with AAI
Indira Gandhi
Delhi International Airport Ltd

(DIAL)
Brownfield/BOOT
45.9 per cent of gross revenue to be

shared with AAI
Rajiv Gandhi
GMR Hyderabad International

Airport Ltd (GHIAL)
Greenfield/BOOT
Concession fees - 4 per cent of

gross revenue to be shared with AAI
Bengaluru
Bengaluru International Airport

Ltd (BIAL)
Greenfield/BOOT
Concession fees 4 per cent of

gross revenue to be shared with AAI
Cochin
Cochin International Airport Ltd

(CIAL)
Greenfield/BOO
Payment of dividend to the

Government towards their 26 per
cent of equity capital
Source: Association of Private Airport Operators, TechSci Research

Notes: BOOT - Build Own Operate Transfer; BOO - Build Own Operate
JANUARY 2016
34
AIRPORTS
FOREIGN PLAYERS ARE SHOWING INCREASING INTEREST IN THE SECTOR
Major foreign players
Airport
Stake (%)
Description
Airports Company South

Africa Global
Mumbai International
Airport Pvt Ltd
10
Operates and owns nine airports in South Africa
Delhi International Airport

Pvt Ltd
10
Hyderabad International
Airport Pvt Ltd
11
Malaysia Airports Holdings

Berhad
Frankfurt Airport Services

Worldwide
AirAsia
Delhi International Airport

Pvt Ltd
Joint venture with Tata

sons and Arun Bhatia
Operates and manages 5 international gateways,

16 domestic airports, to 18 short take-off and
landing ports (Short Take-off and Landing ports)
that serves the rural and remote areas in
Malaysia
10
Global airport operator that offers airport

management services including terminal and
traffic management, baggage and cargo
handling, and aviation ground handling
49
AirAsia is a Malaysian low-cost carrier. It has

formed a joint venture AirAsia (India) Pvt Ltd with
Tata Sons (30 per cent stake) and Arun Bhatia
via Telestra Tradeplace (21 per cent stake) in
March 2013. Tata Sons planning to raise its
stake to 41.06% as on August 14, 2015
JANUARY 2016
35
AIRPORTS
OPPORTUNITIES
JANUARY 2016
AIRPORTS
OPPORTUNITIES
Policy support and demand
growth unlocking large
investment potential
Huge potential to develop

India as an MRO hub
Leverage on nonaeronautical revenues,

improved technology
The Indian Aviation sector likely to
The Indian Aviation Industry aims to
Airport developers can now
see investments totalling USD12.1

billion during the Twelfth Five Year
Plan
boost MRO business in India, which

is currently worth US500 million and
is estimated to grow over US1.5
billion by 2020
draw on wider revenue

opportunities such as retail,
advertising and vehicle
parking
Indian airline companies spend over
Future operators will benefit
Of the total investment, USD9.3
billion is expected to come from the

private sector
Success of PPP formats will raise
investment in existing and

greenfield airports
Private sector participation in six
existing airports operated by AAI is

likely to increase investment
opportunities for airport sector
1315 per cent of their revenues on

maintenance, which is the secondhighest cost component after fuel
Inauguration of MRO facility at
from greater operational

efficiency due to satellite
based navigation systems like
Project Gagan which is in
development phase
Hyderabad in May 29, 2015 by Air

India Engineering Services Limited
(AIESL) which is a 100% owned
subsidiary of Air India
Notes: Project Gagan is directed towards transitioning from a ground-based navigation system to a satellite-based one. AAI and ISRO are
jointly working on this. A Space Based Augmentation System (SABS) will be operational by 2013,
MRO Maintenance, Repair and Overhaul
JANUARY 2016
37
AIRPORTS
SUCCESS STORIES
JANUARY 2016
AIRPORTS
IGI INTERNATIONAL AIRPORT, DELHI - A COMPELLING SUCCESS STORY
Awarded at the Skytrax World Airport Awards 2015 for the Best Airport in Central Asia region and for the Best Airport
Staff. Also, they were felicitated with the prestigious Golden Peacock National Quality Award 2015 for their continuous
efforts in building a culture across IGI Airport
Ranked first in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers) up
from second in 2012
Delhi International Airport Ltd became the first in the world to receive the ISO 22301:2012 certification for its robust business
continuity management system
Phase I
Final
Passenger handling
capacity per annum
34 million
100 million (by 2020)

(60 million as on October
2013)
Area (acres)
1,907
5,106
Operational status
Completed on Mar-2010
Ongoing 20-year project
Facts and features

Passenger Traffic: 41.0 mn (FY15)
Aircraft movement: 0.3 mn (FY15)
Cargo: 0.7 mn tonnes (FY15)
Terminal 3
Retail space: 0.2 mn sq feet
Apron area: 6.7 mn sq feet
Multi level car park: 4,300 cars/day
(mn: million; sq: square)
Phase 1 of modernisation of IGI International Airport (at a cost of INR86 billion) involved
renovation of terminals 1A, 1B, 1C and Terminal 2. It also included construction of a
new domestic terminal along with an integrated passenger terminal (Terminal 3)
Source: Delhi International Airport Ltd, Association of Private Airport Operators,
Airports Authority of India, TechSci Research;
Note: ACI Airports Council International
JANUARY 2016
39
AIRPORTS
CSI INTERNATIONAL AIRPORT, MUMBAI - HARNESSING THE POWER OF PPP
During the World Travel Awards, 2015, CSI International Airport, Mumbais GVK Lounge at Terminal 2 has been felicitated
with Asias Leading Airport Lounge Award. Also, the Architizer A+ Award for the Best Architectural Structures in the
World was bagged by CSI International Airport in the Transportation-Airports category, 2015
Ranked fifth in the world at the ACI Annual Service Quality Awards in 2014 (category: handling 25-40 million passengers)
Plans to increase the handling capacity at the airport from 36 to 48 flights/hr and to increase the passenger capacity to 40
million annually
Facts and features
In FY15, CSI handled
Passenger traffic: 36.6 million
Cargo movement: 0.7 million tonnes

Passenger handling
capacity per annum
Cargo handling capacity
per annum
Modernisation of the Mumbai International Airport will

entail investments worth USD1.3 billion over a period of
20 years
Parts of the project completed till now:
Phase I (2008): New airport lounges, retail outlets,

duty-free shops, temporary cargo facilities, and
multilevel car parks
Phase II (2010): Involved construction of a new

terminal at Sahar, a parallel runway, and new
cargo facilities
40 million
1.5 million tonnes
Government of India to provide USD1.1 billion
Source: Airports Authority of India, Mumbai International Airport Ltd, TechSci

Research
Note: ACI Airports Council International
JANUARY 2016
40
AIRPORTS
USEFUL INFORMATION
JANUARY 2016
AIRPORTS
INDUSTRY ASSOCIATIONS
Airports Authority of India (AAI)
Rajiv Gandhi Bhawan, Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24632950
Directorate General of Civil Aviation (DGCA)

Aurbindo Marg, Opp. Safdarjung Airport,
New Delhi 110 003
Phone: 91 11 24622495
Fax: 91 11 24629221
E-mail: dri@dgca.nic.in, dfa@dgca.nic.in
JANUARY 2016
42
AIRPORTS
GLOSSARY
AAI: Airports Authority of India
ACI: Airport Council International
CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
FY: Indian Financial Year (April to March)
So FY10 implies April 2009 to March 2010
GOI: Government of India
INR: Indian Rupee
MRO: Maintenance, Repair and Overhaul
PPP: It could denote two things (mentioned in the presentation accordingly)
Purchasing Power Parity (used in calculating per-capita GDP slide 12, GROWTH DRIVERS)
Public Private Partnership (a type of joint venture between the public and private sectors)
JANUARY 2016
43
AIRPORTS
EXCHANGE RATES
Exchange rates (Fiscal Year)
Exchange rates (Calendar Year)
Year
INR equivalent of one USD
Year
INR equivalent of one USD
200405
44.81
2005
43.98
200506
44.14
2006
45.18
200607
45.14
2007
41.34
200708
40.27
200809
46.14
2008
43.62
200910
47.42
2009
48.42
201011
45.62
2010
45.72
201112
46.88
2011
46.85
201213
54.31
2012
53.46
201314
60.28
2013
58.44
2014-15
61.06
2014
61.03
2015-16(Expected)
61.06
2015(Expected)
63.72
JANUARY 2016
Source: Reserve bank of India,

Average for the year
44
AIRPORTS
DISCLAIMER
India Brand Equity Foundation (IBEF) engaged TechSci Research to prepare this presentation and the same has
been prepared by TechSci Research in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The
same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any
medium by electronic means and whether or not transiently or incidentally to some other use of this presentation),
modified or in any manner communicated to any third party except with the written approval of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of TechSci Research and IBEFs knowledge and
belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.
TechSci and IBEF neither recommend nor endorse any specific products or services that may have been mentioned
in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result
of any reliance placed on this presentation.
Neither TechSci nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission
on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
JANUARY 2016
45

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AIRPORTS

For updated information, please visit www.ibef.org

Market Overview & Trends........ 7

Porter Five Forces Analysis ...20

For updated information, please visit www.ibef.org

Third largest aviation market by

By 2020, passenger traffic at

Travel & tourism to be

The travel & tourism industry is

Business & leisure travel to

Leisure Travel & Tourism spending (in USD Billion)

Spending on business travel is

For updated information, please visit www.ibef.org

By 2030, Indias working

Working population (aged

By 2016, Indias middle income

Indias middle income population

For updated information, please visit www.ibef.org

Growth in aviation accentuating

middle class demography is

India plans to increase the number

Expenditure in MRO accounts for

Freight traffic also likely to go up as

By 2020, the MRO industry is likely

Investments totaling USD12.1

The government has been encouraging

Tax incentives for developers;

Government has allowed 49 per cent FDI

Source: Ministry of Civil Aviation, MRO India, TechSci Research

For updated information, please visit www.ibef.org

MARKET OVERVIEW AND TRENDS

Scheduled airlines: distance

For updated information, please visit www.ibef.org

Aircraft Movement 20.80%

Airports Authority of India (AAI) was

The Aircraft Act (1934) governs remaining

For updated information, please visit www.ibef.org

Passanger Load Factor

For updated information, please visit www.ibef.org

For updated information, please visit www.ibef.org

Growth in passenger traffic has been strong since the new

Passenger traffic increased by 12.47 per cent in FY15

Passenger traffic in FY16*

Total passenger traffic stood at a 106.45 million in FY16*

Source: Association of Private Airport Operator, TechSci

For updated information, please visit www.ibef.org

12th Plan Period

Growth in passenger traffic set to remain strong in future

International passenger traffic posted a CAGR of 1.6 per

Growth in domestic passenger traffic has been robust

Domestic passenger traffic expanded at a CAGR of 4.6 per

11th Plan Period

10th Plan Period

During FY15, domestic passenger traffic increased by

International Passenger Throughput International (million)

During FY15, international passenger traffic increased

Domestic Passenger Throughput Domestic (million)

For updated information, please visit www.ibef.org

Total freight traffic registered a CAGR of 6.7 per cent over

By 2023, total freight traffic is expected to touch 4.14 million

During FY15, domestic freight traffic at 0.98 million

In FY16*, domestic freight traffic was 0.51 million tonnes,

Domestic freight traffic increased at a CAGR of 0.6 per cent

Domestic ('000 Tonnes)