Monthly Newsletter January 2014

Members:

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CONTENTS

1. Aviation Sector ……………………………………………………………………………3

2. Airports

2.1 Bangalore International Airport Limited……………………………….………………9

2.2 Cochin International Airport Limited………………………….……………………….9

2.3 GMR Hyderabad International Airport Limited……………………………....………10

2.4 Mumbai International Airport Limited………………………………………..………10

3. Airlines

3.1 Air India……………..…….…………………………………………………………12

3.2 Jet Airways.…………………………………………………………….…………….12

3.3 SpiceJet…..…………….…………………………………………….………………13

3.4 IndiGo…..…………….…………………………………………….……………..…13

4. International News……………………………………………….………………………15

5. Traffic…….………………………………………………………………………………18

6. Review of Report…...….….....................………………………………..........................25

Disclaimer: The information contained in this newsletter has been collected from news/articles

appeared in various newspapers and other publications and also collected from respective airport

operators. APAO makes no warranties as to the accuracy or authenticity or completeness of the

information.

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ABBREVIATIONS

AAI Airports Authority of India

AERA Airports Economic Regulatory Authority of India

BIAL Bangalore International Airport Limited

CAPA Centre for Aviation

CIAL Cochin International Airport Limited

CSIA Chhatrapati Shivaji International Airport, Mumbai

DGCA Directorate General of Civil Aviation

DIAL Delhi International Airport Limited

FAA Federal Aviation Administration

GHIAL GMR Hyderabad International Airport Limited

IATA International Air Transport Association

ICAO International Civil Aviation Organisation

IGIA Indira Gandhi International Airport, New Delhi

ISRO Indian Space Research Organisation

MIAL Mumbai International Airport Limited

MoCA Ministry of Civil Aviation

MRO Maintenance, Repair and Overhaul

PPP Public-Private Partnership

RGIA Rajiv Gandhi International Airport, Hyderabad

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1. AVIATION SECTOR1

1. According to CAPA analysis, Indigo and SpiceJet are in the top-five list of low cost carriers

in Asia-Pacific region having the highest number of planes in its services. The analysis also

said that the low cost airlines in the region already have 992 planes and will cross the 1,000

mark this month. The carriers have placed orders for 1,591 planes. While IndiGo is placed

third with 73 planes as on December 2013, SpiceJet is a distant fourth with 56 flights. In the

Asia Pacific region, currently there are 47 low cost carriers, including 23 in south-east Asia,

16 in north Asia, six in south Asia and two in Australia. The year-end analysis also showed

that the low cost carriers have 15% of the total in-service commercial aircraft, which numbers

around 6,800. In the region, Indonesia’s Lion Air has the highest number of 94 planes

followed by Malaysia’s AirAsia and Australia’s Jetstar Airways with 74 each planes ahead of

Indigo and SpiceJet. The analysis said that 2014 will see a record level of start-up activity as

about 10 low cost carriers are being launched, which includes AirAsia India. Others are

AirAsia X, Thai VietJet, NokScoot, Jetstar Hong Kong, Spring Airlines Japan, China United

Airlines, Jiu Yuan, Tigerair Taiwan and a yet to be named LCC subsidiary of TransAsia

Airways. Last year, five low cost carriers–Golden Myanmar, Malindo, Hong Kong Express,

Thai Lion and Vanilla Air–were launched. There were six such launches in 2012, including

AirAsia Japan, which has now re-launched as Vanilla following the sale of the AirAsia stake

to All Nippon Airways.

2. MoCA has decided to follow the ‘Hybrid Till’ model for six airports that are in the process of

being privatized - Chennai, Kolkata, Jaipur, Lucknow, Guwahati and Ahmedabad - by taking

60% of the non-aeronautical revenues into account while calculating charges at these airports,

and leaving the remaining 40% for the airport operator. MoCA has also done away with the

proposal of the Planning Commission to determine landing and parking charges at the six

airports identified for privatisation prior to the award of the project and of linking the increase

in tariff to the Wholesale Price Index in the new model concession agreement drafted by the

Key Infrastructure Department, AAI. AERA would determine the landing and parking

charges at the airports identified for privatisation. Linking the tariff to Wholesale Price Index

would have introduced an upward bias. Charges would have increased even after the operator

recovers investment. The Planning Commission’s mechanism of determining tariffs had been

termed as "flawed" by IATA. The redrafted model concession agreement also limits the

concession period of the project to 30 years. The airport operator may be granted an extension

for operating the airport for an additional 30 years thereafter.

3. DGCA has certified the GPS Aided Geo Augmented Navigation (GAGAN) system paving the

way for satellite-based flight navigation over the vast airspace of India, its neighbours and

surrounding high seas. GAGAN would enable aircraft fitted with satellite-based augmentation

equipment to use its signals in space for en route navigation and precision approach without

vertical guidance over the huge air space. Developed jointly by AAI and ISRO, GAGAN

would expand India's navigation coverage not only over the national and neighbouring

countries' airspace, but also over Indian Ocean, Bay of Bengal and Arabian Sea. The

availability of GAGAN signal in space would bridge the gap between European Union's

similar system EGNOS and Japan's MSAS coverage areas, thereby offering seamless

navigation to the aviation industry. GAGAN would also help pilots navigate in all-weather

conditions by an accuracy of up to three metres, a capability that would enable landing

aircraft in tough weather and terrain. The system would also allow an aircraft to fly on a

1 Newspaper Clippings

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specific path between two three-dimensional defined points, straighten routes and reduce fuel

burn.

4. AAI has given its in-principle consent to the project site of Greenfield Cargo airport at Bhaini

Bhairon in Haryana's Rohtak district, after conducting a preliminary site visit and pre-

feasibility study. The Ministry of Defence has also issued a "No Objection Certificate (NOC)"

to MoCA.

5. DGCA has now made it mandatory for all small aircrafts and helicopters operators to fit black

boxes in them by 2014-end. The amendment to the Civil Aviation Rule (CAR) also makes it

mandatory that all aircraft being imported or leased from now on should be fitted with

Cockpit Voice Recorders (CVRs) or black boxes and Cockpit Audio Recording System

(CARS). During recent safety audits, it was found that a large number of turbine-powered

planes and helicopters, including turboprops (turbine-powered propeller aircraft), were not

fitted with CVRs or CARS. Two audits of DGCA by FAA last year had also pointed towards

the deficiency. Rule 57 of the Aircraft Rules of 1937 requires that every aircraft should be

fitted and equipped with instruments and equipment, including radio apparatus and special

equipment as may be specified. A specific CAR on the fitting of CVRs and CARS, introduced

in 2012, was amended to make it mandatory for all operators to have these instruments on

board the planes or choppers, including those to be imported or leased, by December 31,

2014. The objective of the amendment is to ensure the recording of the aural environment on

the flight deck during flight time.

6. DGCA on 7th January decided to set up a cell comprising officials from DGCA and of all

Indian carriers at a meeting with representatives of airlines, AAI, IGI Airport, the Met

department and CISF. A total of 247 flights have been cancelled due to fog since December

17 including 119 flights on a single day late last week. The cell would daily monitor the fog

situation and take quick decisions to help airlines mount flights to clear the backlog of

stranded passengers. The meeting also reviewed the deployment of pilots, trained to operate

the Instrument Landing System under Category III when the runway visibility range (RVR) of

around 75 metres. Under CAT-II and CAT-I conditions, the RVR is around 150-200 metres

and 550 metres respectively. The airlines have already been instructed to deploy adequate

number of CAT-III trained pilots to operate flights to and from Delhi during fog. They have

also been asked to reschedule flights of non-CAT-III compliant aircraft like turboprop ATRs,

Q-400, Canadian Regional Jets in this period. The meeting took stock of the facilities airlines

were providing to passengers to minimise their inconvenience, including advance information

about delays or cancellations and provision of food and beverages at such times. On

improvement of fog situation, the Air Traffic Control was also instructed to give priority to

diverted flights. ATC should sequence the aircraft and give clearance for take-off based on the

start-up request to avoid congestion. Meteorological information for passengers should be

shown on Flight Information Display systems at the airport and it should be updated regularly.

7. The Bureau of Immigration is doing away with the immigration check of Indian passengers.

The trial run will begin at IGIA, Delhi by February end. Currently, passengers landing at any

international airport of the country have to fill a disembarkation form which has over 20

questions. The form is then submitted at the immigration counter at the arrival hall of the

airport and a passenger loses 15 minutes to one hour in the process. The bureau is installing

software which will flash details of passengers before immigration officials and they do not

need to stop at the counters. The facility will be available only to Indian passengers and they

will just have to show their passport to leave the airport. The disembarkation form which is

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given to the passenger inside the aircraft contains questions such as date of birth, address,

travel history, contact number and flight details.

8. The full service airline to be launched by Tatas and Singapore Airlines has decided to acquire

20 Airbus A-320s on lease. The start-up airline plans to launch its flights by July, subject to

regulatory approvals, and the planes are likely to start getting inducted weeks before that.

9. DGCA on 9th January started examining issues to make Delhi airport a ‘zero diversionary’ by

the year-end. A technical committee has been set up. The main term of reference of the 10-

member panel would be to make Delhi a zero diversionary airport without compromising on

safety of aircraft operations. The committee has been asked to submit its report by March 31.

The committee, which would include representatives of the met department, AAI, DIAL, Air

Traffic Control and BCAS, would also prepare a comprehensive document on low visibility

operations defining duties and responsibilities of all the stakeholders. It would also look

into issues pertaining to international operations and the modalities to deal with passengers

stranded due to fog. Over 300 flights have been cancelled due to fog since Dec 17 last year,

including 119 flights on a single day last week.

10. The City and Industrial Development Corporation (CIDCO), nodal agency for the Navi

Mumbai International Airport, has sent the request for qualification (RFQ) terms to a leading

legal firm, Sahai Associates, for vetting. CIDCO hopes to issue the RFQ by January-end. The

agency also indicated it would soon be able to take on board the villagers opposing the

project. CIDCO is currently carrying out surveys along with the project-affected villgers. The

villagers had earlier rejected the state's rehabilitation package. Further, CIDCO is also making

efforts to bring on board PAVs from Pargaon and Ovla where the joint surveys are yet to

begin. CIDCO's efforts to get PAVs on board has received a major boost after villagers failed

to win the recently held gram panchayat polls on the issue of their opposition to the proposed

international airport. The joint surveys, which are currently underway in Dungi, Kohli and

Upper Ovla, will cover present structure of the house of project affected person (PAP), its

area, type of construction, member of the family, their education, profession and business,

whether or not PAPs from the below poverty line, number of handicapped persons. Besides,

PAPs will also give details with regard to the total income of the family and number of

vehicles. PAPs would get 1 floor space index (FSI) for 12.5% developed land and 2.5% FSI

for another 10% developed land. Besides, PAPs would get three times more land to the

current residential plot which they have occupied.

11. The government has accorded infrastructure status to MRO of aircraft and engines. The MRO

industry would now on be considered part of the sub-sector of airport in the transport sector

infrastructure for the purpose of External Commercial Borrowings (ECBs). The RBI circular,

issued on January 6, says "On a review, it has been decided that, for the purpose of ECB,

'Maintenance, Repairs and Overhaul' will also be treated as a part of airport infrastructure".

Accordingly, MRO, as distinct from the related services which are other than infrastructure,

will be considered as part of the sub-sector of Airport in the Transport Sector of

Infrastructure. At present, the MRO industry in India accounts for $800 million out of a $50

billion international market. Analysts said that given the right environment, the MRO industry

in India has the potential to achieve annual growth rate of 10% for the next 10 years.

12. MoCA is preparing a cabinet note for the abolition of the 5 year / 20 aircraft rules, which

prevents Indian registered airlines from flying abroad until they have been operating

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domestically for five years and have a fleet of at least 20 aircraft. In addition MoCA is also

looking into a proposal to allow A380 planes to land in Indian airports.

13. DGCA has set up a special cell called SUGAM to address the difficulties faced by air

travellers relating to flights or airport facilities. The cell, headed by Joint Director General,

has been tasked to first acknowledge the complaint electronically and direct the airline or

airport operator concerned to address the issues “latest within a fortnight”. The cell would

also seek replies from airlines and airports on a monthly basis on the complaints made and

take “suitable action” in case of non-compliance by them. A dedicated email id,

‘sugam@dgca.nic.in’, has been created in the DGCA website for the complaints to be lodged.

14. DGCA on 13th January issued a notice saying "In order to comply with the requirements of

Schedule XI of Aircraft Rules 1937, a notice is hereby given to the public and all the persons

likely to be affected by the grant of this permit to submit their objections or suggestions, if

any, on the Statement of Intent (submitted by AirAsia), along with the particulars, as

enclosed, within Thirty Days of the issue of this notice". The notice will delay the grant of Air

Operators Permit (AOP) to AirAsia. The procedure for award of AOP is being conducted in

accordance with CAP3100, which involves a checklist of 36 items. The DGCA grants the

AOP after assessing the preparedness of a start-up airline to launch flights by examining

issues like availability of aircraft, manpower to operate flights as well as on the ground,

aircraft parking space at airports and engineering facilities. After receiving the AOP, AirAsia

India will have to apply to airport operators and the DGCA for approval of its routes and

network before officially launching the airline.

15. According to a latest report by CAPA, the total estimated losses for domestic carriers are

expected to be Rs 1,065-1,600 crore, despite the third quarter being the strongest quarter

traditionally for airlines on account of festive period. In September 2013 quarter, Indian

airlines collectively lost over $500 million (Rs 3,000 crore). As per the estimates, Jet Airways

may report a loss of Rs 400-500 crore, while SpiceJet may witness a loss of Rs 170-215 crore

in the December quarter. Air India may post a loss of Rs 900-1,100 crore during the period.

The report said “When the industry is reporting significant losses in peak season it is clear

that the domestic Indian aviation market has a fundamental problem with viability”. Fall in

rupee, higher fuel prices and pricing pressure led to a worst-ever quarterly loss of Rs 891

crore for Jet in July-September quarter, while SpiceJet reported a loss of Rs 559 crore during

the same period. With continuing losses, capa estimates that Jet and SpiceJet may witness

record full-year losses. “Every carrier is expected to post losses in the current fourth quarter

based on current trends and a fare war is not ruled out in February/March 2014, which will

likely result in Jet Airways and SpiceJet reporting record full year losses for the 12 months

ending March 31, 2014,” said the report. With mounting losses, CAPA said that Jet is

expected to burn through almost the entire capital generated from the 24% stake sale to

Etihad. The report said “New entrants including AirAsia India, Tata-Singapore Airlines and

Air One are expected to add around 20 aircraft to the domestic market in fiscal 2015”.

16. MoCA has issued an order stating that commission paid to intermediaries in the process of

sale of air tickets should be a part of the airfare tariff charged by airlines and that “no amount

will be collected from the consumers over and above this”. MoCA has made it clear that

current aviation rules “require airlines to determine tariff which by definition includes

commission”. Airlines are also required to “display a ‘single consolidated fare’ and give its

break-up also for the consumers’ benefit”.

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17. The Parliamentary Standing Committee on Transport, Tourism and Culture has rejected the

Civil Aviation Authority (CAA) Bill in the present form, saying the proposal for setting up a

new aviation regulator lacks teeth in empowering the authority and asked the Centre to come

out with a comprehensive Bill after revisiting the Aircraft Act, 1934. The panel in its report

recommended creation of such an authority but pointed out that the current provisions could

not ensure the autonomy that is being sought to be given to the CAA. The panel observed

“We feel that the proposed Bill seeks to create an authority which simply will be as good as

the existing Directorate General of Civil Aviation (DGCA) without much changes in its

powers and authority; it would be simply changing the nomenclature from the DGCA to the

CAA”. The Union Cabinet had last year cleared the proposal to create a new aviation

regulator with full operational and financial autonomy. It was proposed that the CAA would

recruit its officers, including specialists, advisors and consultant, to carry out the functions of

the authority. Once operational, the CAA would replace the DGCA and be responsible for

issuing licenses, certificates, permits, approvals and any other legal document required for the

safety of the civil aviation sector. The panel said rather than bringing a standalone Bill, it will

be better to come out with a comprehensive Bill after revisiting the Aircraft Act, 1934, which

has been too old to tackle the emerging problems in the aviation sector, and incorporating the

Civil Aviation Authority in it. It also noted that the Bill did not include regular safety aspects

of helicopters and recommended that the provisions be more comprehensive and include all

aspects pertaining to safety of helicopters also. The panel said “We feel that relevant

provisions of the Bill require suitable amendment to remove possible duplication, overlapping

and ambiguities”.

18. MoCA on 27th

January lifted the prohibition on the Airbus A380 to land in India. The planes

have been cleared for landing at Delhi, Mumbai, Hyderabad and Bangalore airports, the only

ones having the required infrastructure for operations of A380. The operations would be

subject to overall traffic entitlements within the bilateral Air Service Agreements (ASAs) with

different countries. It has also been decided that wherever the entitlements are not expressed

in terms of seats per week, the same should be rationalized and converted into seats per week

before allowing A380 operations to India from these countries. If any ASA specifically

prohibits operation of A380 to India, the same will also be required to be amended before

A380 operations from that country are allowed. The rationalization of traffic rights from

services per week to seats per week shall be done through mutual negotiations through

Memorandum of Understanding. Before operations of A380 are allowed, all the airports shall

have to get DGCA certification and make adequate preparation in terms of various services

required. The operation of A380s will help airports to generate more revenue, give more

comfortable and luxurious travel to passengers, liberalize the Civil Aviation environment in

India and boost the image of Indian civil aviation in the international market.

19. The Madras High Court on 29th January granted an interim injunction till February 5,

restraining the Centre from proceeding any further with regard to Request for Qualification

(RFQ) from private parties for the management of Chennai airport. The order was passes on a

writ petition by the Airports Authority Employees Union questioning the validity of the

decision of the department of civil aviation and the AAI to privatise the Chennai airport. The

challenge was on the grounds of violation of the AAI Act and also as being ultra-vires of the

Constitution. The petition said “the AAI issued an order under the subject ‘infrastructure

development’ purportedly to implement the report of the Planning Commission for

development, operation and maintenance of identified airports through public, private

participation (PPP) and created the Key Infrastructure Development Cell”.

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20. FAA on 31st January downgraded India’s aviation safety ranking to Category 2 from the

Category 1 status it held since August 1997. The downgrade means airlines from India that

already operate to the US can continue to operate existing services, but are not permitted to

establish new services to the US. A Category 2 rating means a country either lacks laws or

regulations necessary to oversee air carriers in accordance with international standards set by

ICAO, or that its civil aviation authority is deficient in one or more areas—such as technical

expertise, trained personnel, record-keeping or inspection procedures. In December 2012, an

ICAO audit identified deficiencies in DGCA standards for oversight of aviation safety. FAA

subsequently began reassessing the DGCA’s compliance with ICAO standards under the

IASA program. It concluded in September 2013 that India’s civil aviation safety oversight

regime does not currently comply with the ICAO safety standards. As part of the International

Aviation Safety Assessment (IASA) program, FAA assesses on a uniform basis the civil

aviation authorities of all countries with air carriers that operate or have applied to operate to

the US. It then makes that information available to the public. The assessments determine

whether or not foreign civil aviation authorities are meeting ICAO safety standards, not FAA

regulations. FAA said that it would continue to work with the DGCA to identify the

remaining steps necessary to regain India’s Category 1 status.

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2. AIRPORTS

2.1 Bangalore International Airport Pvt. Ltd.1

1. BIAL has received the Gold rating for Leadership in Energy and Environmental Design

(LEED) India from the Indian Green Building Council (IGBC). BIAL received the award for

its energy efficient, eco-friendly and sustainable terminal building design. LEED is an

internationally-recognized green building certification system that provides building owners

and operators with a framework for identifying and implementing practical and measurable

green building design, construction, operations and maintenance solutions. BIAL was

acknowledged for its outstanding contributions to sustainable building and development

practices.

2.2 Cochin International Airport Pvt. Ltd.2

1. CIAL has awarded contract for the construction of 15 lakh sq ft new international terminal

complex to L&T, Chennai. The CIAL board approved the tender for a total project cost of Rs

284.14 crore, which is 11.24% above the estimate of Rs 255 crore. The proposed terminal will

have three levels. Base level will handle baggage and other utility services. Duty-free shop

and baggage conveyors will also be here. Level one will house arrival services, including the

immigration check counters, Customs etc, and level two will provide departure services that

include an expansive launch, check-in counters, emigration check, shops, snack bars etc. The

two-level terminal will have provisions for 112 check-in counters, with in-line baggage

screening facilities, 100 immigration counters, duty free shops of 30,000 square feet at

departure and arrival lounges, 19 boarding gates, 15 aero bridges, six baggage conveyer belts

and fully covered alighting and boarding area. The proposed state-of-the-art terminal will

have the capacity to handle 10 million passengers a year. The foundation stone for the new

international terminal will be laid on 1st February.

2. CIAL has been adjudged as recipient of ‘The Excellent Performance Award’ for the year

2013-14, instituted by Yasoram Charitable Trust as part of their Organic Waste Utilization

and Organic Farming initiative. CIAL was selected for the prestigious award from among

several industrial establishments for exemplary sustainable practices adopted for captive

utilization of organic waste generated for organic farming in CIAL.

3. CIAL has enhanced its operational facilities with the acquisition of a comprehensive aircraft

recovery equipment (ARE). ARE is transportable by air and capable of recovering all

conventional aircraft in the range of single aisle aircraft, including Airbus 320 and Boeing 737

from an accident site. With an investment of`3.25 crore, CIAL has become the first airport in

the country that is capable of recovering aircraft or their body parts of those that become non-

operational.

4. CIAL has inaugurated a host of facilities which include 18-hole golf course, warehouse for

duty-free items, a solar power unit, an aviation security training institute and an integrated

airport management system. The proposed golf course will be an expansion of the existing

golf course developed with an investment of Rs 15.50 crore and consisting of eight fairways

1 Information provided by BIAL

2 CIAL Website & Newspaper Clippings

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and one driving range. Its driving range will be 300 yards long and 120 yards wide. The

warehouse with modern racks will have a storage area of 32,000 sq ft and advanced forklifts

will be made available to transfer items coming from abroad directly from containers to the

racks. Advanced cold storage facilities and security infrastructure will also be available at the

warehouse. The new solar plant will have a capacity of 1 MW and it will be in addition to a

100-kv unit. The airport is implementing a Rs 15-crore project for migrating to a paper-less

office and an integrated office management concept. Aviation Security Training Institute

being set up with an investment of Rs 2 crore is also expected to cater to the requirements at

airports like Mangalore, Calicut, Coimbatore, Trichy, Madurai and Trivandrum as well as the

upcoming airport at Kannur.

2.3 GMR Hyderabad International Airport Pvt. Ltd.1

1. RGIA organized the Passing out Parade of trainees who have undergone 4 months training in

the Basic Fire Fighters Course conducted by GMR Aviation Academy (GMR AA) at Main

Fire Station. The Basic Fire Fighters Course adheres to ICAO guidelines (STP.111). The

duration of this Course is 16 weeks / four months. The course is designed to equip entry-

level Fire Fighters with the necessary knowledge, skills and attitude to perform Fire Fighting

tasks. A major part of the training is devoted to practical exercises to make the participants

physically and mentally sound enough to combat any adverse incidents or accidents. During

the training, their skills are sharpened to react to any given situation swiftly enabling them to

be physically fit, to bear any amount of stress and strain.

GMR AA was setup in 2009 with the key objective of providing professional training and

enhancing the knowledge and skills of Airport personnel in all disciplines of airport

functioning. GMR AA facilitates/provides/hosts ICAO, ACI, IATA and BCAS approved

Training programs for Asia Pacific, Middle East and Africa Region. The major advantage

enjoyed by GMR AA is reinforcing its training with real time familiarization visits and

activities carried out from a world class operational international airport, Rajiv Gandhi

International Airport in live environment.

2.4 Mumbai International Airport Pvt. Ltd.2

1. MIAL commissioned its new Air Traffic Control (ATC) tower on 1st January 2014. The ATC

operations have been taken over by the new tower, which stands at 83.8 metres, over 20

metres higher than the existing structure. The new tower, built at a cost of around Rs.1.25

billion (Rs.125 crore) affords an uninterrupted five-mile 360-degrees view of the

surroundings for better navigation and surveillance. Equipped with the latest technology in

communications, navigation and surveillance (CNS) systems, the new ATC has a capacity of

handling 46 flight operations per hour, including around 750 take-offs and landings, and

controlling other air traffic movements like international air traffic in a 24-hour cycle making

it among the busiest in the country. The new ATC tower was inaugurated in October 2013 and

since then was working in co-ordination with the old ATC tower before the formal migration

took place on 1st January. The new ATC tower is spread over 2,884 square metres with an

award-winning design. The old ATC tower will be soon be demolished and will enable the

GVK Group that runs the airport provide more amenities and facilities to improve operations

and efficiency at the airport.

1 Information provided by GHIAL

2 MIAL Website & Newspaper Clippings

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2. MIAL new international terminal (T2) was inaugurated on 10th January. The state-of-the-art

T2 is an integrated four-level terminal spread over 4.39 lakh square metres that can

accommodate over 40 million passengers per year. T2, built at a cost of Rs 5,500 crore, will

commence international operations from February 12 and domestic operations are expected to

begin in July 2015. It will be able to accommodated 9,900 passengers during peak hours and

has a 7 lakh sq ft area of retail space, lounges and travel services. The facilities include 188

check-in counters, 60 immigration counters for departing passengers, 76 immigration counters

for incoming fliers, 52 boarding gates, around 11,000 seats, 101 toilets, 47 escalators, 73

elevators, 44 travelators, 16 lounges and 10 baggage carrousels, among others. Of the four-

level terminal, level 1 will be used for ground transportation and level 2 for arrivals. Level 3

will have domestic security and retail space, while level 4 is meant for common international

and domestic check-ins, international security and retail.

3. CSIA Terminal 2 or T2 has been awarded Indian Green Building Council’s (Leadership in

Energy & Environmental Design) LEED gold rating for green buildings for sustainable and

environment friendly design features. The terminal is the third in the country and the largest

to receive the ‘gold’ rating, after Delhi and Bengaluru’s terminals. The peacock feather-

inspired roof has dichroic lenses that allow defused daylight and natural sunlight to illuminate

the terminal. The head-roof system has 28 large skylights, measuring 5,000 square feet each

and 244 minor skylights, measuring 1,400 square feet each. The 6,420 dichroic lenses on the

roof’s sculpted ceiling eliminate the need to use artificial lighting inside the terminal during

daytime. The terminal boasts of 1.6 lakh sq ft of green landscape, which has 77,000 plants of

80 species. The mutli-level car park has LED light signages over each slot that shows green

light for an empty spot.

4. MIAL has entered into a partnership with Tata Teleservices Maharashtra Limited to provide

cost-effective fixed voice and data services at the T2 terminal. Tata Docomo will provide

voice and data telecommunication services including Internet line, ISDN PRI, ADSL, MPLS,

broadband connection. The broad scope of collaboration will also entail supplying, installing,

commissioning, operating, managing and maintaining the related telecommunications

infrastructure and equipment at the airport for a seven year period.

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3. AIRLINES1

3.1 Air India (AI)

1. AI has dropped its voluntary retirement scheme owing to high attrition rate and government’s

disinclination to provide committed funds. The carrier had expected some 5,000 employees to

avail themselves of the package, which was aimed at reducing the huge salary bill- pegged at

Rs 3,100 crore this fiscal.

2. AI has introduced flight tracker service on its website which will enable people receiving

friends and relatives at airports to track the location of any AI flight enroute the journey by

keying in the flight number. AI has become the second domestic carrier in the country to

introduce the service. The service currently tells the location of any flight, it would be able to

predict its exact time of arrival in the second phase of the project.

3. AI is seeking a bridge loan of up to Rs 1,417.72 crore ($230 million) for taking delivery of

two Boeing787 Dreamliner aircraft from an ongoing order and has invited offers from banks

or financial institutions to arrange the bridge financing for a period of six months to one year.

AI is offering the aircraft as security and will repay the loan after it concludes a sale and

leaseback arrangement adding there will be no government guarantee for the loan. The

delivery of two 787 aircraft is due in February and March.

4. AI would constitute a committee to evaluate the performance of the 14 Boeing 787

Dreamliners it is set to add to its fleet by the end of the current financial year, before taking a

final decision on induction of the remaining 13 aircraft on order for delivery by 2016. A

committee comprising senior officials from AI, MoCA, the ministry of law and the ministry

of finance would do the audit, assisted by executives with technical expertise. There were

certain performance and operational guarantees specified in the purchase agreement. The

review committee will assess if the parameters specified match the actual functioning. In the

event of slippage, AI can either seek compensation from Boeing or reconsider induction of

additional Dreamliners.

5. AI is planning to seek approval from the MoF for raising Rs. 10,000 crores (Rs. 100 bln)

through tax-free bonds. MoF had earlier rejected the proposal on the grounds that such issues

were permitted only for infrastructure companies. The proposal to issue tax-free bonds worth

Rs. 100 bln is one of the 46 recommendations suggested by the airline’s cost cutting

committee headed by R.H. Dholakia. The airline has a loan book of around Rs. 440 bln, of

which it has already restructured Rs. 180 bln of debt through issuance of non-convertible

debentures worth Rs. 74 bln to its lenders.

3.2 Jet Airways

1. Jet Airways will restart its daily flights to New York with a stopover in Abu Dhabi from 1st

May which it had stopped last year due to losses on the route. Jet Airways will also launch a

daily direct service from Mumbai to Paris with effect from May 14, 2014 which will be

operated by Airbus A330 aircraft. Jet Airways will launch of two new international flights,

Bengaluru’s maiden flight to Abu Dhabi as well as a new daily direct service from Hyderabad

1 Newspaper Clippings

Page 13 of 27

to Abu Dhabi effective March 01, 2014 which will be serviced by the Boeing 737–800

aircraft.

3.3 SpiceJet

1. SpiceJet has placed a firm order for as many as 42 Boeing 737 MAX aircraft that offer fuel

savings compared to its existing fleet of current-generation 737s The order would be worth

$4.4 billion at list prices without adjusting for either inflation or price discounts. SpiceJet has

also negotiated options to buy as many as 42 more jets depending on its future growth.

2. SpiceJet on 10th January said that the board of directors at a meeting on January 9 has

decided to issue up to 64.17 million shares of the face value of Rs 10 each on preferential

basis to promoters with the option to apply for and be allotted an equivalent number of equity

shares. Promoters would infuse around Rs 133.34 crore through a warrant issue, which will

lead to an increase in their stake in the firm to 58.46% from 52.41% currently.

3. SpiceJet on 16th January announced it had filed its summer 2014 schedule, which includes

plans to reconfigure its Boeing 737 aircraft to offer five rows of seats, with enhanced legroom

and value-added services. On the product front, the airline announced the launch of enhanced

products and services, including SpiceMAX, a priority-handling product for passengers

opting for premium seats, seat priority check-in, enhanced 10-kg hand baggage allowance and

priority checked-baggage handling and delivery. It would also be launching a cabin refresh

program shortly, along with rolling out several enhancements to its inflight product, including

an entirely new menu and service delivery model in partnership with top caterers, and an

increase in online meal ordering options. SpiceJet ground and cabin crew will also be

undergoing an intensive service refresh training program. The airline announced that it would

remove Pondicherry, Trichy and Allahabad stations from its network, as part of scheduling its

destinations. It is adding new international destinations, including Hong Kong and Dhaka,

while it would be discontinuing its Pune-Bangkok, Varanasi-Sharjah and Delhi-Guangzhou

flights. As per the new schedule, Sharjah will continue to be served from Pune and Lucknow,

and Bangkok from Bangalore. Guangzhou (China) will be served from Kolkata, along with

Hong Kong.

4. Spicejet will resume services between Bangalore - Mysore from February 1. It has withdrawn

services due to lack of aircraft.

3.4 IndiGo

1. IndiGo from 7th January allowed travel agents to collect 2% transaction fee on each ticket.

The fee would be applicable on basic fare and fuel surcharge and adjusted against sale or

remitted to agents at the end of the month. The decision to implement the fee follows MoCA

order of September 2013 which allowed airlines to include a transaction fee in the fare. The

Order said transaction fee, commission or convenience fee were all the same - payment of

remuneration to an intermediary. The order said all these were permissible, if shown as part of

the fare and no sum was collected from consumers over this. The order also allowed airlines

to follow dual pricing “Price differential can exist between a ticket purchased directly from an

airline counter or their website or through its website and through an intermediary”. Low-cost

airlines do not pay a regular commission to travel agents and had instead introduced a

transaction fee that was collected by agents on each transaction. These airlines pay a

Page 14 of 27

productivity-related sale incentive each month and on annual sale but there is no regular

commission on an ordinary sale. The imposition of transaction fee will make buying tickets

on airlines’ websites cheaper as it will not include the transaction fee. This will also boost

airlines’ web sales.

2. IndiGo on 15th January launched a new daily non-stop flight between Pune and Kolkata and a

fourth daily non-stop flight between Pune and Delhi. The airline has introduced six new

flights on its route connecting various destinations with effect from February 1 - non- stop

flight between Delhi and Bagdogra, non-stop flight between Kolkata and Bagdogra and

Bangaluru-Chennai, non-stop flight between Chennai-Kolkata, ninth non-stop flight between

Mumbai-Bangalore and one stop flight between Chennai and Bagdogra via Kolkata.

INTERNTAIONAL AIRLINES

1. Emirates Airlines have launched a visa processing service in India, in partnership with Visas

of the World (VOW). Emirates’ customers can now log on to www.emirates.com/in to apply

for visas to ten destinations, namely UK, USA, Canada, Switzerland, France, Germany, Italy,

Netherlands, Nigeria and South Africa. With the partnership with VOW, Emirates’ passengers

will not need to visit a visa office to collect their application forms or check their

documentation. The initiative makes it easier for Indian passport holders to connect with

friends, family and business contacts in ten key global travel destinations.

The VOW service will initially be offered from all ten of Emirates’ Indian gateways, namely

Mumbai, New Delhi, Chennai, Kolkata, Ahmedabad, Bengaluru, Kochi, Kozhikode,

Hyderabad, and Thiruvananthapuram. In addition, the VOW service will be available in six

cities where Emirates does not operate direct flights—Baroda, Pune, Goa, Jaipur, Lucknow

and Mangalore.

2. Drukair has announced plans to launch a bi-weekly flight connecting Bhutan’s Paro

International Airport with Mumbai, starting May 1.

Page 15 of 27

4. INTERNATIONAL NEWS1

1. The Government of Malaysia has introduced visa on arrival (VOA) facility for visiting Indian

tourists from January 1 onwards. The VOA facility is applicable to Indians travelling to

Malaysia from a third country – Singapore or Thailand - holding valid visa for the respective

countries and having confirmed return tickets to India. Visiting Indian tourists can avail of

visa on arrival at all major airports of Malaysia, namely, Kuala Lumpur International Airport

(KLIA), Low cost Terminal LCCT (KLIA), Penang International Airport, Sultan Ismail

International Airport, Johor Bahru, Kota Kinabalu International Airport, Sabah and Kuching

International Airport, Sarawak, at a fee of $100.

2. Dubai International Airport registered 15.2% growth in annual passenger traffic in 2013 as

compared to 2012. The airport handled 66,431,533 passengers in 2013 as compared to

57,684,550 during 2012. Passenger numbers in December 2013 reached 6,047,126, an

increase of 13.6% compared to 5,320,961 recorded during the same month in 2012. The

airport continues to benefit from the efficiencies offered by the large number of wide-body

jets that operate into it with the average number of passengers per aircraft movement rising to

198 in 2013, up 4.5% from the 189 recorded in 2012. Aircraft movements in 2013 reached

369,953, up 7.5% compared to 344,245 movements recorded during 2012. Aircraft

movements in December totalled 32,832, compared to 30,945 movements during the same

month in 2012, an increase of 6.1%. During the year, a total of 28 new passenger destinations

were added by flydubai and Emirates bringing the total passenger destinations served by

Dubai International to 239. India retained its position as Dubai’s single largest destination

country with 8,401,253 passengers, a year on year growth of 14.3% compared to 7,347,270 in

2012. The UK placed second with 5,099,843 passengers (+19%) followed by Saudi Arabia at

4,825,114 (+34.2%). In terms of destination cities served by Dubai International, Doha

retained the top spot with 2,516,866 passengers (+12.9%) followed closely by London with

2,494,555 passengers (+24.1%) and Kuwait with 1,813,603 passengers (+13.3%). Eastern

Europe was the fastest expanding regional market in terms of percentage growth in 2013

(+57.4%) due to network expansion by flydubai and Emirates, followed by Australasia

(+33.4%) thanks to additional services and traffic resulting from the Emirates partnership with

Qantas while Asia Pacific placed third (+25.1%). Cargo volumes also reached record levels in

2013 with 2,435,567 tonnes of air freight passing through Dubai International during 2013, up

6.8% compared to 2,279,624 tonnes recorded during 2012. Monthly freight volumes in

December totaled 218,138, up 8% compared to 201,949 recorded during the same month in

2012.

3. Abu Dhabi International Airport has registered record passenger traffic for 2013 and an

increase of 12.4% on 2012. More than 16.7 million travellers passed through the three

terminals, 1.5 million more than the year before, while aircraft movements increased to a total

of 135,213, a rise of 11.2% from the previous year. Freight traffic also increased with more

than 706,000 tonnes of cargo handled in 2013, a hike of 24.4%.

4. Singapore Changi Airport handled 53.7 million passengers in 2013 up 5% on 2012. Aircraft

movements were also up 5.9% compared to 2012 totalling 343,800. On the cargo front,

airfreight movements were stable at 1.85 million tonnes for the year.

1 ACI Airport World

Page 16 of 27

New Airport Initiatives Internationally

1. Frankfurt Airport (FRA) has increased the free HotSpot access time from 30 to 60 minutes.

The service is available throughout FRA’s passenger terminals, and is facilitated via the

HotSpot portal of Deutsche Telekom. With only a few clicks to get online, passengers can

check their e-mails and surf the Internet. Each user can take advantage of this free Wi-Fi

access once per day. Although the online session ends automatically after one hour, a timer

continuously shows how much free time is still left, so users are not surprised. Users can

remain online after the free hour expires by purchasing a 24-hour ticket.

2. Pittsburgh International Airport will introduce self-service customs kiosks to improve

efficiency for international travellers. The two Global Entry kiosks for low-risk passengers

will allow expedited clearance for pre-approved international travellers entering the US. Arriving

passengers will be able to process their entry into the US through the kiosks rather than

waiting in line for a customs officer and they will able to clear the primary inspection process in

less than a minute. Upon arriving, approved travellers will be able to proceed directly to the

kiosks, present their machine-readable passport or US permanent resident card, place their

fingertips on the scanner for fingerprint verification, and make a customs declaration. The

kiosk then issues the traveller with a transaction receipt and directs them to the baggage claim

area and the exit.

3. Seattle Tacoma International Airport (Sea-Tac) has installed new self-service automated

passport control (APC) kiosks which are expected to speed up the customs entry process for

US and Canadian citizens. The passengers’ waiting time will be cut in half once the APC

kiosks are operational. Sea-Tac is the 15th largest airport in the US and it will be the fifth US

airport to use the APC’s.

4. Copenhagen Airport (CPH) has launched a Chinese app and website to meet the needs of

travellers. The move follows on the success of offering Chinese guides and courses in Chinese

culture to airport retail staff, along with Chinese language signs and a welcome brochure. The

initiatives are essential for Denmark to attract Chinese travellers and add to the 60,000 that

currently travel through Copenhagen each year. CPH currently handles about 23 million

passengers a year.

5. London Heathrow airport have installed virtual assistants (VA) called ‘Louise’ to help speed

up their security checks. The Tensator VA’s use cutting-edge technology to project an image

and create the illusion of a real person and one has been installed in the terminal's check-in

area and the other in the security area. VA ‘Louise’ wears a full Heathrow security uniform,

and is stationed at check-in and security and informs passengers about acceptable liquids and

other security processes. The installation follows a successful trial at Heathrow, which

resulted in a reduction in bag rejections at security and fewer delays for passengers. VA’s are

part of the airport’s check in and security process and are intended to engage passengers with

consistent and clear communications.

6. Philadelphia International Airport (PHL) has launched a new indoor digital media network to

amplify traveller experience and brand exposure. Clear Channel Airports, a division of Clear

Channel Outdoor has signed on a number of major brands to use the innovative network to

better engage with travellers passing through the city. It features 35 advanced digital

components, with eco-friendly digital technology, including two 15’ video walls; eight

Page 17 of 27

vertical column displays that allow for synchronized digital content to accompany passengers

along the highest traffic corridor in the airport; and 25, 70-inch screens running throughout

the concourses and bag-claim areas.

7. London Heathrow Airport is testing auto-stereoscopic 3D display technology as part of a trial

for assisting passengers through designated security check point areas. The glasses-free 3D

solution provided by Exceptional 3D is aimed at reducing traveller delay within the security

areas prior to entering Terminal 1. Flat panel displays will be installed capable of displaying

high-definition 3D content without the need to wear specialised eyewear. The 3D technology

acts as a part of the security checkpoint process in an effort to reduce the amount of items

travellers inadvertently pack in their ‘carry on’ luggage, which should be disposed of prior to

boarding.

8. Kuala Lumpur International Airport has installed a solar power system which is expected to

save it around $627,000 annually in energy costs. The 19 MW (megawatt) DC (direct current)

installation, is the largest in Malaysia and combines ground-mount, parking canopy and roof-

top systems to maximise electricity savings and return on investment while minimising the

use of space. Parking canopies combine the benefits of covered parking with the economic

benefit of generating electricity at an economical and predictable price. Utilising airport roof-

top space and the land surrounding the airport allows electricity to be generated at the point of

consumption, removing the need for costly transmission lines.

Page 18 of 27

5. TRAFFIC1

1. According to DGCA, domestic airlines flew 55.86 lakh passengers in December 2013

registering a growth of 3.36% over the 54.04 lakh passengers carried by them in December

2012. The domestic airlines flew 614.2 lakh passengers registering an increase of 4.43% over

the 588.1 lakh passengers flown during calendar year 2012.

2. The market share of scheduled domestic airlines for the month of December 2013 is:

1 ACI, IATA, DGCA and Press Information Bureau

Page 19 of 27

3. The passenger load factor of scheduled domestic airlines for December and November 2013

is:

4. Flights by Indian Airlines – International flights by domestic carriers were more packed than

domestic flights. (Figures pertain to the entire calendar year of 2013.)

Aircraft flown Domestic International

Departures (lakh) 5.61 0.91

Hours (lakh) 9.35 3.88

Kilometres (crore) 48.42 27.47

Passengers carried (crore) 6.01 1.32

Kms performed (crore) 5,890.92 4,760.68

Available seat kms (crore) 7,887.18 6,170.00

Passenger load factor (%) 74.70 77.20 Source: DGCA

5. According to IATA Air Passenger Market Analysis November 2013, air travel markets

increased 4.1% in November 2013 compared to November 2012. This was slower than the

6.5% year-over-year growth recorded in October. In November capacity expanded by 6.1%

which out-paced demand growth. This led to a 1.4 percentage point slip in the load factor to

76.3%. Demand drivers such as consumer and business confidence, however, continue to

improve. This suggests that growth may accelerate in the coming months.

Page 20 of 27

International Passenger Markets –

November 2013 international passenger demand was up 4.8% compared to the year-ago

period. Capacity rose 6.3% versus November 2012 and load factor dipped 1.0 percentage

points to 75.5%. All regions except Africa recorded year-over-year increases in demand.

However, compared to October, all regions reported slower demand growth for November.

Asia-Pacific carriers recorded an increase in demand of 5.5% compared to November 2012.

This was supported by the stronger performance of major economies such as China and Japan.

With capacity up 6.8% on the previous year, the load factor slipped 0.9 percentage points to

75.4%.

Domestic Passenger Markets –

Demand for domestic travel rose 3.1% in November 2013 compared to the year-ago period, a

significant deceleration versus the October increase of 5.9%. There was significant variation

in performance among markets. Total domestic capacity was up 5.6% and load factor dipped

1.9 percentage points to 77.7%. Indian domestic traffic rose 3.4% in November compared to

a year ago, after an 8.6% rise in October, signaling that conditions remain volatile.

6. According to IATA Air Freight Market Analysis November 2013, air freight markets surged

in November with a 6.1% rise in global freight tonne kilometers compared to a year ago. This

is a solid improvement on the October increase of 4.4%. All regions reported growth except

for Latin America and Africa. The strongest performing region was the Middle East where

carriers reported a 16.5% improvement.

Asia-Pacific carriers saw cargo demand grow by 4.9% in November compared to November

2012. This is up from the 1.8% year-on-year growth recorded in October. The expansion was

fueled by a rebound in Asian trade volumes and the improving Chinese economy. Stronger

demand for Asian manufactured consumer goods in North America and Europe has also

supported the rise in Asian trade and air freight volumes. The jump in demand among the

Asia-Pacific carriers–which account for some 40% of the global market–is a good indicator

for broader air freight improvements in the coming months.

Page 21 of 27

7. According to ACI, the world’s airports reported an overall passenger growth of 3.1% in

November driven mainly by international traffic, which saw an increase of 4%, while

domestic traffic grew modestly by 2.2%. Latin America-Caribbean, Asia-Pacific and the

Middle East all experienced robust year-over-year growth of 8.9%, 6.1% and 6.1%

respectively. Europe experienced growth of 3.3%. On the other hand, both North America and

Africa were in decline for the month of November contracting by 0.9% and 8.4%

respectively. Among the world’s major airports, Dubai (DXB) reported the highest year-over-

year growth in passenger traffic at 9.5%, which placed it fifth overall in total passenger

numbers for the month of November.

Growth in air freight stayed in positive territory for the second month in a row posting gains

of 3.4% in November. This comes after a sluggish year for most of 2013 with growth almost

flat over the last twelve months. The growth in freight traffic is primarily fuelled by the

international market, which was up by 5.4% in November, while domestic markets remain

weak (-1%). Dubai (DXB) and Hong Kong (HKG), which are key international freight hubs,

posted high growth of 11.6% and 6.6%. Conversely, airports serving a large domestic market

did not fare as well. Memphis (MEM) domestic traffic was flat as compared to November

2012 while Louisville (SDF) and Beijing (PEK) declined by 4.1% and 1.7% in November.

Page 22 of 27

8. Preliminary figures for the full calendar year 2013 by the Association of Asia Pacific Airlines

(AAPA) reaffirmed the pattern of continued steady growth in international air passenger

demand, in contrast to soft air cargo market conditions. Asia Pacific airlines carried a

combined total of 220 million international passengers in 2013, 12 million more than in the

previous year, representing 6.0% growth. Regional economic growth remained a positive

driver of increases in business and leisure travel demand, coupled with improving business

and consumer confidence in the major developed markets. Reflecting comparatively strong

demand on regional routes, international passenger traffic, measured in revenue passenger

kilometre (RPK) terms, registered a more moderate 5.2% increase. Combined with a 4.8%

expansion in available seat capacity, the average international passenger load factor reached

78.2%, 0.3 percentage points higher compared to the previous year. International air cargo

demand for Asia Pacific carriers, expressed in freight tonne kilometre (FTK) terms, recorded

a marginal contraction of 0.6% in 2013, albeit an improvement from the steeper declines seen

in 2012 and 2011. In spite of the fall in demand, the year saw a 1.1% expansion in cargo

capacity, resulting in a 1.1 percentage point decline in the average international freight load

factor to 65.4%.

Overall, Asia Pacific airlines recorded another year of solid growth in international passenger

traffic in 2013. Regional economies slowed a little but maintained positive growth rates, while

signs of recovery in Europe and a stronger pickup in the US economy led to broader

improvements in business and consumer sentiment. Air cargo markets remained subdued in

2013, but picked up towards the end of the year in line with increasing demand for Asian

exports in the major developed markets. Domestic air travel markets in the Asia Pacific region

also enjoyed strong growth, with domestic passenger numbers up 10% to an estimated 740

million for the year, led by China. Overall, therefore, Asia Pacific airlines carried close to 1

billion passengers in 2013, a significant milestone.

Given expectations of a continuing modest improvement in global economic conditions, the

outlook for Asian carriers remains broadly positive. Nevertheless, operating margins remain

compressed as a result of weak cargo revenues and other competitive pricing pressures.

Airlines are responding by investing in newer more fuel-efficient aircraft, other productivity

improvements, and value added service enhancements.

Page 23 of 27

9. According to IATA Premium Traffic Monitor November 2013, premium travel recorded a

solid 5.4% rise in November, in line with October growth of 5.6%. Current growth is up on

year-to-date expansion (4.0%), indicating premium travel has picked-up in H2. The

acceleration has been supported by rising business confidence and stronger international trade

growth. By contrast, growth in economy class travel was relatively slow in November, up just

2.4%. Key premium travel markets maintained strength in November, with the North Atlantic

up 5.9%. Better conditions in the US and Europe also supported Europe-Far East (9%) and

North-Mid Pacific (7%). The outlook for premium travel continues to improve slowly,

together with improvements in the business environment. Business confidence is rising and

the outlook for world trade is improving on growth in export orders. Premium travel's share of

total travel has already started to gain, which should provide support to yields.

10. According to IATA Airlines Financial Monitor November – December 2013, worldwide

airline shares declined in December with a 4% fall compared to November. But compared to

the start of 2013, worldwide airline shares are up 21% with US and European carriers seeing

the strongest gains (78% and 48%) from significant improvements in financial performance.

The opposite is true for Asia Pacific airlines, where shares have fallen 9% compared to the

start of 2013. Air freight markets picked-up in November on a rise in international trade, but

passenger growth moderated. Growth in available seats increased slightly to 4%, as the net

number of aircraft entering storage declined.

11. Foreign Tourist Arrivals (FTAs) during the Month of December 2013 were 8.00 lakh as

compared to 7.53 lakh during the month of December 2012 and 7.37 lakh in December

2011. There has been a growth of 6.3% in December 2013 over December 2012 as compared

to a growth of 2.2% registered in December 2012 over December 2011. FTAs during the

period January to December 2013 were 68.48 lakh with a growth of 4.1%, as compared to

FTAs of 65.78 lakh with a growth of 4.3% during January to December 2012 over the

corresponding period of 2011.

12. Foreign Exchange Earnings (FEEs) during the month of December 2013 were Rs 11,680

crore as compared to Rs 10,549 crore in December 2012 and Rs 8,870 crore in December

Page 24 of 27

2011. The growth rate in FEEs in December 2013 over December 2012 was 10.7% as

compared to 18.9% in December 2012 over December 2011. FEEs from tourism during

January to December 2013 were Rs 1,05,836 crore with a growth of 12.0%, as compared to

the FEEs of Rs 94,487 crore with a growth of 21.8% during January to December 2012 over

the corresponding period of 2011.

13. The tourist Visa on Arrival (VoA) Scheme during the month of December 2013 recorded a

growth of 23.8% as compared to the corresponding period of the year 2012. During the month

of December 2013, a total of 2,700 VoAs were issued as compared to 2,181 VoAs during the

month of December 2012. During the period January to December 2013, a total number of

20,294 VoAs were issued as compared to 16,084 VoAs during the corresponding period of

2012 registering a growth of 26.2%.

Page 25 of 27

6. REVIEW OF REPORT

Inside the world's biggest airport construction projects in 2013/14 by CAPA India

CAPA India has published a report on the slow pace of airport growth in India. As per the report,

airport projects in India account for just 1% of $385 billion dollar worth airport development

works which are underway around the world.

The report further mentions that China is taking a lead among the Asian countries in the airport

construction with projects worth $115 billion. Other cities in India's neighbourhood like Dubai

and Singapore which look up to India as important source markets are also investing heavily in

airports. The report mentions that Singapore is planning a fifth terminal for Changi airport (fourth

terminal will be complete by 2017) to increase airport capacity to 135 million passengers per

annum by mid-2020s. Dubai is executing $34 billion Dubai World Central project which will

involve construction of five runways and capacity to handle 160 million passengers annually.

According to the report, airport projects valuing $4.9 billion are underway or in planning in India.

The largest project is Mumbai airport modernisation project valued over Rs 12,000 crore. The

report further mentions that there is no large capital expenditure in airport projects in India. The

modernisation of 35 non metro airports by AAI is complete and also Mumbai airport's T2.

Uncertainty surrounds Navi Mumbai airport as it is difficult even in best case scenario to see the

second airport opening before the current Mumbai airport reaches saturation.

As per the report, the reason for India lagging behind in airport development are twofold - the

small nature of India's civil aviation market and financial difficulties of Indian airlines which has

hindered their growth and limited their expansion. The report further mentions that the country

like India having a population of 1.2 billion people, the aviation market is small with just 61

million passengers last year. Much of the market is concentrated in six cities (Mumbai, Delhi,

Kolkata, Chennai, Bangalore and Hyderabad) which account for 70% of domestic traffic. The

remaining 30% traffic is shared by other 100 odd airports in the country. The other reason

hindering airport development in country is that financial condition of airlines is pathetic and they

are uncompetitive. Today foreign airlines are picking up traffic from India and India is the biggest

market for Emirates and second biggest for British Airways after the US. The report further

Page 26 of 27

points that the growth in traffic has been slower than expected in regional and tier II airports

making operations unprofitable.

The report also has given a comparison of projected cost of some of the world’s biggest airport

projects. The details are given below:

Country City/airport Project

Actual (A)

or Planned

(P)

Projected

cost USD

(billion)

Projected

completion

date

China Beijing

(Daxing) New airport A 11 2018

China Chengdu New airport A 9.5 2017

China Chongqing New runway & terminal A 4.7 2015

India Mumbai Second terminal A 2.6 (Jan) 2014

India Navi Mumbai New airport P 2.3 2017?

Singapore Changi Airport Fourth terminal A 1 2017

Singapore Changi Airport Fifth terminal P ? ?

Malaysia Kuala Lumpur New terminal (KLIA2) A 1.3 2014

Thailand Bangkok

Suvarnabhumi

Phase 2 development /new runway A/P 3 2016/?

Korea Seoul Incheon

Third construction phase including

second terminal A 3.3 2017

Taiwan Taipei Taoyuan Airport City A 11.7 2030

Dubai Dubai World

Central New airport A 8.2 2027

Qatar Hamad

International New airport A 15.5 2014

Abu

Dhabi

International

Airport Midfield terminal A 3.2 2017

Oman Muscat New terminal and other works A 5.2 2014

Saudi

Arabia Jeddah Terminal expansion A 7 2014

Turkey Istanbul New airport A 6.5 2019

Germany Berlin New airport based on old one A 8.2 2015

Germany Frankfurt Various including fourth runway

and third terminal A/P 10 2015

UK London

Heathrow

Various, including T2 replacement,

T6 and third runway A/P/P 13 2025?

UK London river

estuary airport New airport P 50 2025?

Norway Oslo Various including second terminal A 6.4 2023

Italy Rome Fiumicino Capacity enhancement A 12 2044

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Russia Moscow

Domodedovo

Various including airport city A/P 3.9 ?

US Atlanta Long-term development project A 9 2015

US Chicago O’Hare Long-term development project A 6 2017

US Los Angeles

LAX

Various including new terminal A/P 12 2015

Canada Toronto Terminal and runways P 3 2016

Brazil Sao Paulo Third airport P 2.2 ?

Libya Tripoli Twin terminals A 2 2015

Egypt Cairo Various including new terminal and

Airport City A/P 18.4 2021

Source: CAPA Construction & Cap Ex database, Airport Data Suite

The report has concluded that an airport cannot be viable until it gets a good throughput. The cost

of running an airport is high. In rural airports where Central Industrial Security Force (CISF) is

not deployed the state police provides security. The security cost is high and can work out to

around a crore rupees a year. Slow pace of airport growth in India owes to lower than expected

growth in non metro and regional airports, financial crisis in airlines and policy inaction by

government.