For airlines, south’s where tailwind is

BANGALORE: It’s Southward ho! For airlines lured by better airports and high air travel growth.

With Mumbai and Delhi airports overflowing, airlines are looking at setting up their bases in southern cities such as Bangalore and Hyderabad, which are in the process of developing world-class airports.

Chennai and Trivandrum airports are also on their radar. So much so that the soon-to-be-launched budget carrier EasyAir, promoted by a group of NRIs based in the US, has chosen Chennai as the operating base for its first four aircraft.

In the first three years, the carrier is planning to provide air connectivity to cities in other regions from major southern airports.

Kapil Kaul, CEO of Centre for Asia Pacific Aviation, who is advising EasyAir on fund-raising, business model and project implementation, feels South India, at this moment, is the best bet as far as aviation growth was concerned.  

“South has four major states - Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, which have aviation growth rates above the national average of 25%. The traffic in this region is being driven by IT and manufacturing sectors. Also, two world-class airports (Bangalore and Hyderabad) are expected to be completed by 2008, which will give a further boost to the aviation sector in this part of the country,” says Kaul.

No-frills airline SpiceJet Ltd CEO and chairman Siddhanta Sharma agrees.

“South,” he says, “has greater concentration of good (aviation) infrastructure than other regions. There are more numbers of potential airports that can be connected in the south than in the north, west and east.”

Sharma said in the north, if you look beyond J&K, then you have only Amritsar, Delhi, Jaipur and Lucknow; and in the west, there is just Mumbai, Pune and Ahmedabad.

SpiceJet itself is setting up its fourth base in Hyderabad (after Delhi, Kolkata and Ahmedabad).

Air Deccan has four its eight bases in southern cities (Trivandum, Hyderabad, Chennai and Bangalore). Kingfisher has night parking facilities in three southern cities (Bangalore, Chennai and Hyderabad) besides Delhi and Mumbai.

“We have begun talks with GMR Group (developing Hyderabad’s greenfield airport) for setting up a maintenance base at the Hyderabad airport. They have also allotted us five parking bays. In addition, we will also be putting up administration offices and staff quarter there,” Sharma said.

Bangalore International Airport Ltd (BIAL), a consortium of Siemens-Zurich Airports, L&T, Airports Authority of India (AAI) and Karnataka State Industrial and Investment Corporation of India (KSIIC), will complete the first phase of the Greenfield Bangalore airport by April, 2008.

It will have a capacity to handle 11 million passengers per year, which a company executive says would be higher than the projected traffic of 8.5 million in 2008.

Another major airport coming up in the South - Hyderabad - with a passenger handling capacity of 12 million is expected to open by the first quarter of 2008.

GMR Group chief financial officer Madhu Terdal believes there are more “operative airports” in the South than other parts of the country.

“With capacity in Mumbai saturated, there is very little scope for its expansion.  Bangalore and Hyderabad have huge potential to develop as major airports.

Jet Airways and Air Sahara had come to Hyderabad more than one and half years back. We now have international carriers like AliItalia, Saudia, Lufthansa and Singapore Airlines, which want to set up base here. Vijay Mallya of Kingfisher Airlines is also quite keen on making this airport as a hub,” says Terdal.

But Air Deccan managing director Capt G R Gopinath begs to differ on the issue. “They (airports) are as bad as anywhere else.” He, however, feels that higher rate urbanisation and per capital income could be drawing airlines to the region.

“The modernisation and privatisation of airports in southern states kicked off faster because of their dynamic chief minister and strong political will,” says Gopinath.