India is on a hitherto unseen airport expansion. But is it enough?

DGCA estimates an air passenger growth of 52 per cent this year

58-Terminal-2-of-the-Bengaluru-International-Airport Sky is the limit: Terminal 2 of the Bengaluru International Airport.

It’s not a garden in a terminal; it’s a terminal in a garden!” That is how Hari Marar, managing director & CEO of Bengaluru International Airport, refers to its recently launched Terminal 2. ‘Garden terminal’ is a departure from the steel-and-glass template for most global airports, with a nature theme filling up the terminal complex with six lakh plants and 10,000 sq.ft of green walls, and the use of sustainable materials like bamboo and locally-sourced granite in construction. Bengaluru T2 was among the nine buildings CNN listed as those that will “shape the world in 2023”.

According to the Directorate General of Civil Aviation, 3.75 crore passengers travelled on domestic flights in just three months from January to March this year―a growth of 21 per cent.

In fact, it is already happening. A month ago, walking up this garden path, Foxconn chief Young Liu was so impressed that the contract manufacturer for Apple’s iPhone promptly agreed to build a manufacturing facility near the airport investing Rs8,000 crore. It will create 50,000 jobs.

“It was great to note the infrastructure readiness… and the availability of social infrastructure around the plot earmarked for the project,” Liu wrote later to Karnataka Chief Minister Basavaraj Bommai. “The efficiency of cargo handling at the airport does have a significant bearing on our operations and metrics, as we rely on air freight for our multiple products to a considerable extent.”

Bengaluru T2 is just one of the poster boys of India’s aviation boom, as the country taxies for take off into becoming the world’s biggest domestic aviation market, as Civil Aviation Minister Jyotiraditya Scindia mentioned in an interview with THE WEEK a while ago. “Look at the growth potential,” he said. “You have just 14 crore flyers out of a population of 140 crore. Which other aviation market has the potential that India has? I am looking at 40 crore air travellers by 2027.”

According to the Directorate General of Civil Aviation, 3.75 crore passengers travelled on domestic flights in just three months from January to March this year―a growth of 21 per cent. It is usually a lean season, compared with summer holidays in May and June or the festive season from October to December. In fact, the DGCA estimates an air passenger growth of 52 per cent this year.

All those passengers, and the many aircraft that carriers have ordered to fly them, also need airports and runways. And that is an area that has not kept pace with the spike.

“Big aircraft orders demonstrate the confidence in the India aviation story. But they also need bases to park the aircraft,” said Sidharath Kapur, who was earlier head of the airports divisions of Adani and GMR, two of the biggest private airport operators in India. “Airlines can expand quickly―order new planes or lease to increase capacity. But airports cannot do that. Airport expansion takes years, so airports need to be planned well in advance.”

Despite the number of airports in the country doubling from 74 in 2014 to 141 last year, the real McCoy will be the blitzkrieg in this area in the months to come. A total of Rs98,000 crore have been earmarked for airport expansion across the country over the next two years; a third of it by the state-run Airports Authority of India itself. In addition to the much-talked about new airports adjoining Delhi and Mumbai, a clutch of other airports, some new and some upgraded, are getting ready. Additionally, the government also plans to develop 100 airports by next year under the UDAN regional connectivity scheme.

In November, Prime Minister Narendra Modi inaugurated Donyi Polo airport in Itanagar, the first in Arunachal Pradesh. A month later, he did the honours at Mopa, launching Goa’s second airport. The tally of Mopa (officially Manohar International Airport) in just three months of operations―4,800 flights and 6.64 lakh passengers.

Come September, the country’s biggest airport will get even bigger. The Indira Gandhi International Airport in Delhi is adding a fourth runway and opening the renovated and expanded Terminal 1. A fourth terminal is also being planned. It also has India’s first elevated cross taxiway, which can help decongest the airport.

“After the completion of the Phase 3A expansion project by this year, the terminal capacity of Delhi airport will increase to handle 10 crore passengers a year and the airside capacity to 14 crore,” said I. Prabhakara Rao, deputy managing director, GMR Group, which runs Delhi, Hyderabad and Mopa airports.

Delhi’s numero uno position, however, will soon be challenged by a suburban neighbour next year. The under-construction Noida International Airport in Jewar in Uttar Pradesh will not only act as the secondary airport for the national capital region, but eventually become the biggest in India, with four runways and a massive multimodal cargo hub, spread across 80 acres.

“Noida Airport will enhance connectivity for western UP and add capacity to Delhi NCR, while acting as a catalyst for infrastructure development, economic growth, and employment opportunities in the region,” said Christoph Schnellmann, CEO of Noida International Airport. “The airport is set to be the logistics gateway of northern India and will help establish Uttar Pradesh on the global logistics map.”

Therein lies the true scope and purpose of airport expansion―as a catalyst for economic growth, beyond just a fancy transit hub for the well-heeled. The Jewar airport might push the massive scaling up of industrialisation of the largely agrarian belt between Noida and Agra, just like the second airport planned at Dholera near Ahmedabad, which will come smack on the Delhi-Mumbai industrial corridor.

Similar is the case with the second airport in Visakhapatnam at Bhogapuram, being built by GMR and expected to be operational in early 2027. “It will act as an economic multiplier in the growth of Andhra Pradesh, and support development of cargo, warehousing and other economic activities including commercial property development in its vicinity,” said Rao of GMR.

Already, an uptick in property rates has been noticed in plots near the upcoming Noida airport. A study by property consultants Anarock after the foundation stone laying ceremony of the airport pointed out how commercial activity, particularly warehousing, saw increased momentum around the airport.

“Over the short-to-mid-term, the area in and around the airport will undoubtedly witness significant development activity by players who hold suitable land banks there,” said Santhosh Kumar, vice chairman, Anarock. “Many players have been hoping to cash in on this mega project since it was announced and bought up large land parcels in the vicinity. For these far-sighted developers, the time to come forward and weigh the best options is finally at hand.”

The location is key here. “The airport’s proximity to major industrial corridors, such as the Delhi-Mumbai Industrial Corridor and the Eastern Dedicated Freight Corridor, will further enhance its potential for industrial growth,” said Avneesh Sood, director of Eros Group, a leading realty player. “This will result in the development of industrial parks, warehousing, and logistics facilities, leading to job creation and economic growth in the region.”

But, is everything gung-ho for the end user, the Indian passenger? Sidharath Kapur feels all is not well yet. “Many challenges need to be addressed, from capacity and operational points of view,” he said. “There will still be shortages and there will be requirement and gaps in airport capacity in the next five years.”

Despite the big-ticket airports under construction and numbers being touted, airport operators would still not be able to match the capacity with the growth in demand. Kapur gives the example of Chennai. An integrated terminal was opened recently, but plans for a second airport have been moving slowly. “Passenger growth can be very fast,” he said. “You will need another airport in a few years time, and you need to plan it at least seven years in advance.”

The biggest issue is land acquisition. “It is not easy and it is very expensive,” said Kapur. “It takes time and needs to be done by the government. That is one major gap.”

But airport operators have their reasons. “Airport terminals are designed for a capacity that should be able to meet the peak load for over 99 per cent of the time in a year,” said Marar. “It is to be noted that designing to the busiest hour may lead to overbuilding the infra, with significant cost implications for both airlines and passengers.”

The implication of this strategy came home to roost across the country in December, as the year-end rush saw mob-like scenarios and unending queues at all major airports. The public outcry forced Scindia to visit Delhi’s overflowing T3. Bengaluru saw a record 1.07 lakh passengers two days before Christmas.

Another major issue is connectivity. Seamless connectivity is essential for airlines like Air India and Indigo to realise their ambitions of going global and retrieving India’s international passengers from Gulf carriers. But it remains a mirage. For instance, a passenger arriving by a domestic flight at Mumbai’s Terminal 1 and needs to board an international flight from Terminal 2 will have a harrowing time, right from transferring between terminals. The situation would worsen once secondary airports come up in Delhi and Mumbai. It is unclear whether anything is being planned to connect Mumbai and Navi Mumbai airports (both managed by Adani) or the two airports in the NCR that are 90km apart.

“These challenges need to be addressed,” said Kapur. “We need to redesign our airport infra to ensure we can meet our aspirations for growth.”