Low-cost Carriers Propel Delhi Airport Into the 60-Mn Passenger Club

1. Low-cost carriers propel Delhi airport into the 60-mn passenger club A robust number of domestic air passengers last year made Delhi’s Indira Gandhi International (IGI) airport the sixth-busiest airport in Asia and one of the top 20 busiest in the world. It entered the 60-million club by handling as many as 63.5 million passengers in 2017 – more than some of the busiest airports like Changi, Incheon and Jakarta. Of the 21 airports that handled more than 60 million passengers during the year, 10 were in Asia, five in North America, five in Europe, and one in the Gulf. The rate of overall traffic growth, however, slowed to 14 per cent in 2017, against 21 per cent a year earlier, primarily due to less capacity addition by low-cost carriers. A technical glitch with Pratt Whitney engines impacted the capacity induction plan of IndiGo, which is based out of Delhi’s IGI airport. In contrast to global peers, the Delhi airport saw a lion’s share of its passenger growth coming from domestic flyers, which, at 46.6 million, accounted for 73 per cent of total passengers. The passenger growth was attributed mainly to Delhi-

2. based low cost carriers like IndiGo and SpiceJet. Additionally, a steady expansion by full-service carrier Vistara and the addition of new international routes by national carrier Air India also contributed. “This traffic surge is mainly because of domestic growth. Many first-time fliers are adding to the boom, the ability to spend has grown manifold with a simultaneous boost from a low-fare environment,” said a senior executive at Delhi Airport. Despite a slowdown in 2017, 116.7 million domestic passengers took the aerial route mainly because the fares were cheaper due to low fuel price. Low-cost carriers carried the bulk of passengers, with market leader IndiGo accounting for 40 per cent of the flyers. The Delhi airport saw its peak during the end of the year, with 6 million passengers flying in December alone – 90 per cent of the planes that the three low-cost players IndiGo, SpiceJet and GoAir flew were all full. Airline executives said a limited growth opportunity in Mumbai due to capacity constraints and the unavailability of a large airport in the north Indian region were contributing to Delhi’s growth. “Airlines mainly design their network keeping two cities in mind –Delhi and Mumbai. In Mumbai, we can’t add flights. In the North, Chandigarh and Amritsar are no alternatives to Delhi, so the capital enjoys a large catchment area,” said a senior airline executive. Indeed, airlines have been aggressive in launching new destinations from New Delhi. In the domestic sector, SpiceJet added flights to Port Blair and Jaiselmer, while rivals IndiGo and GoAir started additional flights on their existing routes. On the international front, while Air India took the lead, connecting the Delhi airport to three new destinations of Copenhagen, Stockholm and Washington, Jet Airways and IndiGo started flying to Riyadh and Doha. Among foreign airlines, Alitalia started direct flights to Rome. Kazakhstan- based airline Air Astana started direct flights to Astana, while Afghan airline Kam Air started flights to Mazar-i-Sharif. Experts say the airport’s future growth plans will be tested by the strength of airlines’ expansion plans and depend on how fast it can finish the upgrade work. The Delhi airport’s Rs 160-billion mega expansion plan, which includes building a new terminal and ATC tower, a fourth runway and the addition of parking bays and terminal capacity, is facing a delay due to an ongoing legal tussle.

3. “The new ATC tower commissioning was expected last year. That would have increased the aircraft movement per hour. But it remains to be seen if the airport will allot slots to airlines at T1 or T2, and with or without dispute resolution. Though there is no dearth of demand in the domestic sector, growth will be lower with limited bays and slots leading to an increase in international flights,” said Ameya Joshi, founder of the aviation blog Network Thoughts. International growth might stem from the fact that Delhi-based airlines IndiGo and SpiceJet will get aggressive on the international front, connecting new destinations with long-range planes. Vistara, also based out of Delhi, will start its international operations from middle of this year. Article By - Business Standard