Active Stocks
Tue Mar 19 2024 13:41:05
  1. Tata Consultancy Services share price
  2. 4,004.65 -3.38%
  1. Tata Steel share price
  2. 150.30 0.47%
  1. Bharti Airtel share price
  2. 1,231.60 0.53%
  1. Power Grid Corporation Of India share price
  2. 260.35 -1.75%
  1. ITC share price
  2. 410.15 -1.74%
Business News/ Companies / Congested airports to boost demand for bigger planes 
BackBack

Congested airports to boost demand for bigger planes 

With the majority of flights still originating from Delhi, Mumbai, Chennai, Bengaluru and Kolkata, airports at these metros are running to capacity

Photo: Hindustan TimesPremium
Photo: Hindustan Times

Airplane makers Airbus Group SE and Boeing Co. expect Indian airlines to order larger planes to accommodate more passengers as airports managing busy runways are unable to permit more flights.

With the majority of flights still originating from Delhi, Mumbai, Chennai, Bengaluru and Kolkata, airports at these metros are running to capacity. As a result, they have limited the number of slots for each airline or stopped allotting fresh slots altogether.

Mumbai International Airport Ltd, which sees 48-52 flights take off or land on a single runway every hour, has stopped giving new slots.

Dinesh Keskar, senior vice-president of sales (Asia-Pacific and India) at Boeing Commercial Airplanes Inc., said that single-aisle planes will continue to serve the majority of the domestic flights. However, as demand increases, “airlines will either have to add frequency (more flights) between city pairs or put larger aircraft on their routes," he said. Airlines have started doing both, he pointed out, adding that they are adding more daily and weekly flights. Air India has announced it will use Boeing 787s on some of its high-capacity routes such as Mumbai-Delhi, Keskar said. Last year, Boeing estimated India will need 260 wide-body airplanes in 2016. It has now revised its forecast upward to 280.

An Airbus executive said that one of its key customers has recently upgraded its order to higher-capacity A321- neos from A320neos. “While I cannot comment on the specific plans of the airline, some of them want to upgrade their order from A320 to A321," said Kiran Rao, executive vice president, strategy and marketing, at Airbus.

“If you look at the metro cities in India, the airports are reaching the maximum limits so the next step is to have bigger aircraft," Rao said.

Domestic air traffic in August grew nearly 24% from a year ago, according to data released on 19 September by regulator Directorate General of Civil Aviation (DGCA).

Nearly 8.38 million passengers flew in the month compared with 6.76 million a year earlier—up 23.98%.

While Mumbai airport is not issuing any new slots, at Delhi airport, airlines are not getting slots during peak hours. The airport’s Terminal 1, used by low-cost airlines, has reached its annual capacity of 18 million passengers a year, and is choked during peak hours.

The Bengaluru airport, built to handle 20 million passengers a year, serviced nearly 19 million in 2015. Hyderabad airport, built for 12 million passengers a year, has already reached capacity, Mint reported on 20 July.

InterGlobe Aviation Ltd, which runs IndiGo Airlines with a fleet of 112 Airbus A320s, declined to comment for the story.

A spokesperson at Jet Airways Ltd, India’s second largest airline, said fleet expansion depends on like demand and supply, market conditions, the audience profile, and the growth plan of each airline.

“Type of service an airline wishes to offer, viz. no frills or a full-service experience, together with routes that an airline flies (short haul/long haul), also dictate the type of aircraft that is added to an existing fleet," the spokesperson said.

But not everyone believes larger planes are the solution.

“We believe wide-body aircraft on short-haul routes is a challenging model as it is higher in cost to operate in terms of trip costs (resulting in higher fares), and lower in customer convenience as it takes longer to check in, board, de-board, claim bags, etc," said Sanjiv Kapoor, chief strategy and  commercial officer at Vistara, owned by Tata Singapore Airlines India Pvt. Ltd.

At best, said Kapoor, it is a stop-gap measure. “We have seen around the world that other than as tactical tags for international flights, it does not really work for domestic short haul." Vistara’s domestic plans are built around narrow-body aircraft.

Subrata Ray, analyst at ICRA Ltd, said the choice of type of fleet would depend on fuel efficiency as well as maintenance costs. “Generally, airlines with a large similar fleet is able to optimize on their maintenance costs and spares inventory," he said.

The congestion at airports is, however, good news for the planemakers. Keskar said he expects more than 95 million passengers will fly domestically in 2016. Boeing’s forecast, made before the new aviation policy, says that over the next 20 years, airlines in India will need 1,850 new airplanes.

Rao expects India’s domestic air passenger numbers to grow at an average 9% annually, quadrupling over the next 20 years. “In the next 10 years, we will deliver one aircraft per week to India. Whether it’s IndiGo, GoAir, Vistara, Air Asia India, or Air India, they are taking planes and have plans in place. Fortunately for us, all those plans involve Airbus," Rao said.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 10 Oct 2016, 12:40 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie