Time has come for India to plan hub airport flight path

Converting one of India’s metro gateway airports into a hub airport is worthy of consideration as the aviation market lags behind the novel coronavirus pandemic and increased passenger demand.

Today, India is the third largest domestic aviation market in the world after the United States and China. Consumer confidence in air travel has helped the industry recover faster than expected. Some airports have already broken down or are close to matching the traffic demand seen before the pandemic.

Also, given the rise in passenger demand, India’s airport operators plan to invest more than Rs 90,000 crore in capacity addition over the next four years.

To boot, the conditions are perfect for a hub airport to be built.

Concept

What exactly is Hub Airport?

Hub Airport is served by several airlines, connecting several airports via non-stop flights.

Historically, airports were designed keeping in mind the requirements of the origin/destination passenger. This meant operating separate arrival and departure terminals.

Over time, better space-use concepts led to the creation of a common passenger terminal, with separate arrival/departure flows at different floor levels. This gave rise to a new segment of passengers – transit flyers, who use the airport only for connecting flights.

A typical hub airport operates on the concept of waves. A wave of incoming flights arrives and is joined by another wave of outgoing flights that depart an hour or two later. ‘Hubbing’ allows maximum combination of flight pairs and a wider choice of destinations and frequencies to connect passengers.

Importantly, while an aspirational hub attracts foreign airlines to increase the number of direct point-to-point connections, it thrives on airlines (based on) that airport, providing more resources, aircraft, crew, Dedicated manpower and infrastructure, and are the enablers of growth. Some global examples are (hub airport/home airline): London/British Airways; Frankfurt/Lufthansa; Atlanta/Delta Airlines; Dallas/American Airlines; Singapore/Singapore Airlines; Paris/Air France; Dubai/Emirates; Chicago/United Airlines; New York/American Airlines and Delta Airlines; Hong Kong / Cathay Pacific.

Why is this a win-win for all? A hub creates economies of scale for airports and airlines alike.

The airport benefits from greater revenue opportunities due to increased direct connectivity with other airports and increased passenger numbers. Improved passenger throughput has an impact on the broader airport ecosystem, such as aero and non-aero service providers at airports, including cargo and ground handling, refueling, retail and duty-free, vehicle parking, aircraft maintenance repairs and overhauls. (MRO), and airport fixed-base operation (FBO) services.

Airlines, on their part, serve city pairs that are otherwise financially impractical to have non-stop flights.

Frequent fliers and business travelers get more choice and flexibility with flights, destinations and service frequencies, as well as lower ancillary costs, such as avoiding the time and cost of overnight stays.

a force multiplier

From a government point of view, an airport serves as a force multiplier with economic activity, jobs and employment, investment, trade, trade, commerce, tourism, culture and benefits other sectors of the economy. It is well established that the creation of one job in the aviation sector outweighs the creation of six jobs in allied sectors such as tourism and hospitality.

All this also drives the economic and social development of the city and its inhabitants.

Let’s look at the ideas for hub airport in India. There are three basic requirements to become a major airport hub, whether domestic or international, i.e. sufficient local consumer demand; Good geographical location and the necessary infrastructure to support high volume traffic. In the case of India, the first two needs have been addressed to a large extent and the focus is on addressing the third requirement.

One India Approach

In context, here’s a look at the favorable factors, odds and opportunities.

Factors to consider in favor: India has the largest migrant, or international community, of 18 million people across all six continents and territories (based on the United Nations Department of Economic and Social Affairs, Population Division – Report on International Migration 2020 ); India is located on busy international air corridors that connect Europe, Africa and the Middle East with Asia, making it ideal for transit hubs and alternate/diversion/fuel stops/technical stops; Being the fifth largest economy in terms of nominal GDP (IMF World Economic Outlook Database April 2019) and seventh largest by land mass, India can support the development of multiple hub airports; The airport business in India is largely monopolistic, with no competing airports in the same urban area; Airport development in India is a regulated business with minimal downside risk to investors; Airport fee fixation is a robust, fair and transparent process under the Airports Economic Regulatory Authority of India

Let’s consider the constraints. The lack of landing slots has led to capacity constraints at major airports, especially during peak hours; The Airports Authority of India Act (AAI), 1994 prohibits AAI/airport operators from commercially exploiting available land for non-aeronautical activities; A ‘high-cost-low-fare’ operating environment and increased competition damage airline balance sheets and financials, hurting airport growth; India has 34 operational international airports, yet smaller international airports are either completely abandoned or have very limited scope to start international flight operations; Rationalization of duties and taxes like bringing aviation turbine fuel under the ambit of Goods and Services Tax will help airlines reduce costs and become financially sound, which will benefit airports.

And, finally, opportunity. To develop inter-modal connectivity (rail/road-air) and logistics support infrastructure (warehousing) as a part of the future airport master plan to fully exploit the potential with cargo and freight transportation. is required; Interested hub airports can partner with Tier-2 and Tier-3 airports in their area; Airports can increase their revenue base by developing allied service capabilities such as cargo handling, aircraft MRO and FBO.

Jagannarayan Padmanabhan is the Director and Practice Leader – Transport & Logistics, CRISIL Infrastructure Advisory