Airport capacity falling behind pace of growth in passengers, airlines?

New Delhi: Passengers and airlines have been hit hard by choked airports in some of the country’s largest cities. The phenomenon is the result of the return of double-digit growth in air traffic.

But airlines, many of which are now profitable, primarily because of benign fuel prices, and passengers are discovering the other side.

For the former, it means no new flights. For the latter, it means an unpleasant experience. And because there are not enough flights, airlines can start charging more.

The worst-hit airports are those in Mumbai, Delhi, Bengaluru, Hyderabad, Goa, Lucknow and Calicut.

“Most of these airports have either reached saturation or are reaching saturation,” said a government official who did not want to be named.

India will have around 100 million air passengers a year by early 2017. It had around 80 million in 2015.

Goa, which sees high fares, especially during the peak season and on weekends, has already exceeded its capacity of 5 million passengers a year. The airport cannot be expanded further as it is a Naval airport where the Airports Authority of India runs a civilian section that has few flights.

Once India’s largest by traffic, the Mumbai airport has been congested for the past few years and has since given away its pole position to Delhi airport.

Now at Delhi, too, airlines are not getting slots during peak hours.

Its Terminal 1, used by low-cost airlines, is choked during peak hours. It has reached its capacity of 18 million passengers a year. But they keep coming.

The Bengaluru airport, built to handle 20 million passengers a year, serviced nearly 19 million in 2015.

Hyderabad’s airport, built for 12 million passengers a year, has reached its capacity.

The Lucknow airport, which was built to accommodate 3 million passengers a year, handles 3.5 million and Calicut is nudging its 2.5 million passengers-a-year capacity.

“There is acute shortage of overnight parking bays and slots at most metros,” said an airline executive, who did not want to be named.

New airlines such as Vistara (the brand name of Tata-SIA Airlines Ltd), which debuted in the third round of airline liberalization in 2012, are not happy.

“Some airports are refusing slots for flights operated on small planes but granting international flights operated by bigger planes as they bring more revenue,” said a second airline executive who also did not want to be named, “Someone has to intervene”.

The slots left by the 2012 grounding of Vijay Mallya’s Kingfisher Airlines Ltd have already been taken over by existing airlines such as IndiGo, Jet Airways, GoAir and Air India, all of which have expanded.

Meanwhile, the airlines continue to shop for more aircraft. This fiscal, they will bring at least 50 planes into the country, with IndiGo alone accounting for 24 and Air India another 20.

Older airlines control most of the prized peak-hour slots at major airports that are preferred by business travellers. These are the slots sought after by new airlines such as Vistara as well.

In March, the airline said it was finding it difficult to add capacity at airports such as Mumbai due to a lack of slots.

A SpiceJet Ltd spokesperson said the airline faces capacity issues in Mumbai and Delhi where planes have to hover, burning extra fuel. “Despite factoring the delay and hovering over the airport, we cannot pass the entire cost to customers due to heavy competition on these sectors,” the spokesperson said.

A spokesperson for the GMR Infrastructure Ltd-run Delhi International Airport Ltd (DIAL) said the firm is working on a plan to increase capacity of Terminal 1 from 18 to 30 million per annum. “The current demand is less than 50 million, while the current capacity is over 62 million,” the spokesman added, referring to the airport as a whole.

The numbers show the newly-built Terminal 3 is underutilized, while Terminal 1, which was to be demolished, has been overrun by flights and passengers.

DIAL denies this is a case of bad planning.

“Domestic traffic of low-cost carriers (LCC) have shown faster growth than anticipated,” the spokesperson said, adding that while the airport has “enough slots”, it “has been working towards flattening the peak” hours.

DIAL also did not appear keen on the prospect of a second airport. “There is ample room for growth and capacity addition at the IGI Airport, Delhi.”

The civil aviation ministry said last month that Delhi would need a second airport sooner than anticipated.

Spokespersons at the GVK Power and Infrastructure Ltd-run Mumbai airport did not respond to emails seeking comment.

A spokesperson of the GVK Power-run Bengaluru airport said its terminal 1 is undergoing expansion to accommodate the increasing growth till the first phase of terminal 2 is completed in 2021.

Most airport projects in India are slow to take off, and then run into further delays. A plan to build a second airport in north Goa has been delayed by many years, as has another to build Mumbai’s second airport at Navi Mumbai.

This means congestion will only increase in the foreseeable future.

“It’s a serious problem. Delays are common. Traffic has affected the quality of service,” said Bengaluru-based Amrit Pandurangi, senior director at consulting firm Deloitte and Touche Consulting India Pvt. Ltd. “If you go to any airport, the quality of service is not up to the mark; there are long queues, no place to sit, limited restaurants.”

One way out is to build more terminals at existing airports, but this is not easy.

In Mumbai, for example, there is little scope for building a new terminal. There are few slots and air traffic control can’t handle more aircraft.

“I think what the airport operator, airlines and the government should do is to come together to streamline capacity management. That mechanism is very weak,” added Pandurangi.

The Airports Economic Regulatory Authority also has to step up its game.

The regulator has so far depended on airports to regulate and monitor the quality of their services and send their reports to it. That is not enough as no airport will show itself in poor light. Experts recommend third-party audits.

In their quest for revenue, some airports have also expanded commercial outlets such as food and retail showrooms so much that the space for passengers has shrunk drastically. This is something Aera needs to look into, the experts add.

“Today, nobody is putting the passenger in the middle of the solutions,” Pandurangi said.