Lack of airport infrastructure biggest challenge to ‘Make in India’: Kapil Kaul

The biggest hurdle to the successful implementation of ‘Make in India’ was the lack of airport infrastructure and the sheer absence of a strategic vision towards creating it, outlined Kapil Kaul, CEO- CAPA India. Excerpts of his speech:

kapil-kaul-1India bereft of a strategic plan to develop airport infra
The excess infrastructure at the T3 is going to choke in the next 3-5 years, even if you put metro. It means that you will have a challenge of capacity – which would mean that it will challenge, even if you have airport capacity, you will have an excess infrastructure issue.
I want to reiterate that airport infrastructure is going to be the biggest challenge. You cannot have ‘Make in India’, if Mumbai airport is saturated and we cannot take any more flights; we cannot have ‘Make in India’ if Pune airport is closed – and we cannot have ‘Make in India’ with capacity shortage challenges. And we have no strategic plan to develop airport infrastructure, apart from incremental plans to improve capacity.       

Connectivity and chocking tier-1 capacity
In terms of connectivity, there are four tiers. First is the tier-1 – where jumbo aircrafts like the A 380s come to India. There is a 90% load factor of every airline in tier-1. Sometimes in the peak, it 95-97%. When we talk about connectivity, anything over 70% means that you need to initiate more traffic and give more bilaterals. Unfortunately, we have a very faulty design with respect to bilaterals. I must say, there is no courage for strategic liberalization, just incremental liberalization.
90% load factor from a tourism perspective means that the cost of tickets are going to be high and the capacity is going to be short. And, therefore, your tier-1 has a challenge of getting people from a tourism perspective.
When we look at tier-2, with A-320s and I must say we are going to have massive capacity in A-320s, so that is one tier where we have significantly structured. But when you go to critical tiers, when you look at ATR, under-50 and under-70 seater capacity, a country of India’s size has 50 planes! It is unthinkable that Shimla, Mysore and Jaisalmer remain massive cities without any infrastructure, because we do not have the tier-3 – which are the ATRs and other smaller aircrafts. That is a big challenge. How can ‘Make in India’ come if we do not have the tier-3?

Make Indian aviation cost-competitive
If you need to make viable and investable airlines, you need to ensure that you have cost-competitiveness. It suffices to say that anything that Indian aviation produces is the costliest in the world – whether it is fuel charges, host charges and whole set of taxation. It may not be of interest to you directly, but if you do get cost-competitiveness you do not get investable grade airlines, resulting in making connectivity impossible.  

Leave a Reply

Your email address will not be published. Required fields are marked *