airports november 2011 - ibef · airports november 2011 . 2 contents ... • aviation sector growth...
TRANSCRIPT
2 2
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
3 3
Airports
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
NOVEMBER
2011
Advantage India
• Growth in passenger traffic likely to go up as incomes rise and more tourists flow in
• Freight traffic also likely to go up as
trade with the rest of the world increases
• Aviation sector growth accentuating need for maintenance, repair and overhaul
• Bright prospects due to location advantage and demand for new facilities
• USD7.5 billion worth of investments in airports infrastructure likely under the Eleventh Five Year Plan (2007-12)
• Growing private sector participation through public – private partnership
• Encouragement to private sector participation; relaxation of FDI norms
• Tax incentives for developers; liberalisation of the aviation sector – Open Sky Policy
No of operational airports: 82
2010
No of operational airports: 50
2000
Notes: FDI – Foreign direct investment, MRO – Maintenance, repair and overhaul
Growing demand Opportunities in MRO
Increasing investments Policy support
4 4
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
5 5 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Evolution of the Indian aviation sector
Source: Airports Authority of India, Ministry of Statistics and Programme Implementation, Aranca Research
Notes: * data for FY10(P), ** data for financial year and not calendar year; FY – Indian financial year (April – March), mn km – million kilometers
Airports NOVEMBER
2011
→ India is the 9th largest civil aviation market in the world → India is ranked 4th in domestic passenger volumes (45.3 million*)
Scheduled airlines: distance flown (mn km)
Non-scheduled airlines in operation
Number of aircraft
Passenger handling capacity at airports
Number of operational airports 50
66 million
225
39
199**
82
235 million
735
123
710**
2000
2010
6 6 For updated information, please visit www.ibef.org
India has 136 airports, 128 of which are owned by AAI
Source: Airports Authority of India, Aranca Research Note: JV – Joint venture
MARKET OVERVIEW AND TRENDS
Airports NOVEMBER
2011
Airports in India (136)
AAI managed (128)
Non-AAI (8)
International, including JVs
(14)
Others
Civil enclaves (25)
Customs airports (8)
Domestic airports (81)
• Airports Authority of India (AAI) was –
• Established in 1994 under the Airports Authority Act
• Responsible for developing, financing, operating, and maintaining all government airports
• The Aircraft Act (1934) governs remaining airports
Activity in AAI airports - shares (%)
Basic Facts 87%
97%
80%
13%
3%
20%
Passenger traffic
Freight traffic
Aircraft movement
International airports Others
7 7 For updated information, please visit www.ibef.org
Six major airlines operate in the country
Note: All statistics are for the month of August 2011 as published by Directorate General of Civil Aviation
MARKET OVERVIEW AND TRENDS
Airports NOVEMBER
2011
Market Share (%) Flight Occupancy Rate (%)
26.3 (combined) 72.1 (Jet)
73.9 (Jet Lite)
18.8 75.9
18.7 73.2
17.4 72.8
13.4 66
5.3 65
8 8 For updated information, please visit www.ibef.org
Passenger traffic has experienced healthy growth … (1/2)
MARKET OVERVIEW AND TRENDS
→ Passenger traffic growth moved back to double digits in FY11, clocking 15.9 per cent
→ Over FY05-11, passenger traffic increased at a CAGR
of 15.9 per cent
Passenger traffic stood at 143.4 million in FY11
Source: Airports Authority of India, Aranca Research
Notes: CAGR – Compound annual growth rate FY – Indian financial year (April – March)
Airports NOVEMBER
2011
59.3 73.3
96.4
116.9 108.9 123.7
143.4
-8
0
8
16
24
32
0
20
40
60
80
100
120
140
160
FY05 FY06 FY07 FY08 FY09 FY10 FY11
Passenger traffic (in millions) Growth (%) - right axis
9 9 For updated information, please visit www.ibef.org
Passenger traffic has experienced healthy growth … (2/2)
MARKET OVERVIEW AND TRENDS
→ Domestic passenger traffic expanded at 17.6 per cent CAGR over FY05–11
→ International passenger traffic rose 11.8 per cent over the same period
Growth in domestic passenger traffic has been robust
Source: Airports Authority of India , Aranca Research
Airports NOVEMBER
2011
39.9 51.0
70.6 87.1 77.3
89.4 105.5 19.4
22.3
25.8
29.8
31.6
34.4
37.9
-12
-6
0
6
12
18
24
30
36
42
0
20
40
60
80
100
120
140
160
FY05 FY06 FY07 FY08 FY09 FY10 FY11
Domestic (million,left axis) International (million,left axis)
Growth - domestic (%) Growth - international (%)
10 10 For updated information, please visit www.ibef.org
Freight traffic has also logged steady growth … (1/2)
MARKET OVERVIEW AND TRENDS
Airports NOVEMBER
2011
→ Total freight traffic registered a CAGR of 10.6 per cent over FY05-11
→ Annual growth in FY11 accelerated to 20.0 per cent
Total freight traffic touched 2.3 million tonnes in FY11
Source: Airports Authority of India , Aranca Research
Notes: CAGR – Compound annual growth Rate, FY – Indian financial year (April – March),
1.3 1.4 1.6
1.7 1.7
2.0
2.3
-5
0
5
10
15
20
25
0
1
2
3
FY05 FY06 FY07 FY08 FY09 FY10 FY11
Freight traffic handled (million tonnes)
Growth (%) - right axis
11 11 For updated information, please visit www.ibef.org
Freight traffic has also logged steady growth … (2/2)
MARKET OVERVIEW AND TRENDS
Airports NOVEMBER
2011
→ Domestic freight traffic increased at 10.9 per cent CAGR over FY05-11
→ International freight traffic rose 10.4 per cent over the same period
International freight traffic was 64% of the total in FY11
Source: Airports Authority of India , Aranca Research
457 484 530 568 552 689 852
824
920 1,023 1,147 1,149 1,271
1,493
-5
0
5
10
15
20
25
0
500
1000
1500
2000
2500
FY05 FY06 FY07 FY08 FY09 FY10 FY11
International ('000 tonnes) Domestic ('000 tonnes)
Growth - domestic (%, right axis) Growth - international (%, right axis)
12 12 For updated information, please visit www.ibef.org
Growth in aviation has also led to higher aircraft movement … (1/2)
MARKET OVERVIEW AND TRENDS
→ Total aircraft movement recorded a CAGR of 11.7 per cent over FY05-11
→ Both international and domestic aircraft movement
have nearly doubled over this period
Total aircraft movement was 1.4 million in FY11
Source: Airports Authority of India , Aranca Research
Notes: CAGR – Compound annual growth rate FY – Indian financial year (April – March)
Airports NOVEMBER
2011
718 838
1,078
1,308 1,307 1,331 1,394
-5
0
5
10
15
20
25
30
0
200
400
600
800
1000
1200
1400
1600
FY05 FY06 FY07 FY08 FY09 FY10 FY11
Aircraft movement ('000) Growth (%) - right axis
13 13 For updated information, please visit www.ibef.org
Growth in aviation has also led to higher aircraft movement … (2/2)
MARKET OVERVIEW AND TRENDS
→ Domestic aircraft movement increased at 12.0 per cent CAGR over FY05-11
→ International aircraft movement expanded by 10.7 per
cent over the same period
Aircraft movement growth was sharpest over FY06–07
Source: Airports Authority of India , Aranca Research
Airports NOVEMBER
2011
554 647 862
1059
1036
1048 1093 163 191
216
249 270 282 300
-6
0
6
12
18
24
30
36
0
200
400
600
800
1000
1200
1400
1600
FY05 FY06 FY07 FY08 FY09 FY10 FY11
Domestic ('000, left axis) International ('000, left axis)
Growth - domestic (%) Growth - international (%)
14 14 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
AAI dominates, but private sector participation is rising
Airports NOVEMBER
2011
→ Until recently, AAI was the only major player involved in developing and upgrading airports in India → Post liberalisation, private sector participation in the sector has been increasing
Major private sector players
Development of Hyderabad International Airport; modernisation of Delhi International Airport
Modernisation of Mumbai International Airport
Development of Bengaluru International Airport
Development of Bengaluru International Airport
Development of Bengaluru International Airport
Development of Simoga and Gulbarga airports in Karnataka
Note: AAI – Airports Authority of India
15 15 For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Notable trends in the airports sector
Airports NOVEMBER
2011
Note: FY – Indian financial year (April – March)
Increasing private sector participation
• Government policy to increase private sector participation
• Currently, there are 6 major private sector players
Greater use of non-scheduled airlines
• Rising business activity leading to higher demand for non-scheduled airlines
• 99 operators with combined fleet of 241 aircrafts in FY09
User development fees
• Increasing use of development fees by airport developers and operators
• Airport Development Fee: Delhi, Mumbai airports to fund expansion
• User Development Fee: Hyderabad, Bengaluru airports for maintenance
Focus on non-aeronautical revenue
• Indian airports emulating SEZ-aerotropolis model to enhance revenues; focus on revenues from retail, advertising, vehicle parking, etc.
• Absence of complementary meals in low-cost airlines have boosted the food and beverages retail segment at airports
16 16
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
17 17 For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong demand and policy support driving investments
Airports NOVEMBER
2011
Strong
government
support
Growing demand
Inviting Resulting
in
Growing demand Increasing investments Policy support
More people travelling by air
Rise in business and tourist travellers
Strong growth in external
trade
Greater government focus on infrastructure
Increasing liberalisation,
Open Sky Policy
Policy sops, FDI encouragement
AAI driving large modernisation, development
projects
Increasing private sector
participation
Strong projected demand making returns attractive
18 18 For updated information, please visit www.ibef.org
Passenger traffic spikes up as demand for air travel soars
GROWTH DRIVERS
Airports NOVEMBER
2011
More Indians travelling by air
• Rise in per-capita income and a growing middle class
• Introduction of low cost airlines
Rising domestic and foreign tourists
• Improving tourism infrastructure
• Successful ad campaigns abroad
More business travellers as well
• India is one of the fastest growing economies
• Emergence of business hubs like Mumbai (Finance), Bangalore (IT), Chennai (IT), Delhi (Manufacturing, IT)
2,441 2,724 2,916 3,104 3,408
5
7
9
11
0
1000
2000
3000
2006 2007 2008 2009 2010E
Per-capita GDP (PPP, current USD)
Real GDP growth (%) - right axis
Travel and Tourism spending (USD billion)
Source: IMF, Aranca Research
Source: WTTC, Aranca Research
34
42 46 47
58
17 22 25 18 22
2006 2007 2008 2009 2010
Leisure travel and tourism spending
Business travel and tourism spending
CAGR 14.6 %
CAGR 6.6 %
Notes: IT – Information technology , E- estimate
GDP growth and per capita income
19 19 For updated information, please visit www.ibef.org
More passengers and rising trade aiding higher aircraft movement
GROWTH DRIVERS
Growth of exports and imports (USD billion)
Source: Ministry of Commerce, Aranca Research Notes: CAGR – Compound annual growth rate, FY11 data is for April-December
Airports NOVEMBER
2011
Growing trade benefits freight movement
• Over FY06-11,
• India’s exports expanded at a CAGR of 13.3 per cent
• Imports registered a 14.2 per cent CAGR
• Growing trade augurs well for airports as they handle about 30 per cent of India’s total trade (by value)
95 119
137
175 176
157 138 175
211
286 284
235
FY06 FY07 FY08 FY09 FY10 FY11
Exports Imports
Higher aircraft movement
Increasing airline operators
Rise in freight traffic
Growth in passenger traffic
Liberalised aviation policy
20 20 For updated information, please visit www.ibef.org
Policy support aiding growth in the airports sector
GROWTH DRIVERS
Airports NOVEMBER
2011
Notes: India currently has bilateral air service agreements with 104 countries. These include Brazil, 27 members of the EU, and China. In 2008 traffic rights were been enhanced with Mexico, Saudi Arabia, Netherlands , Qatar, Iran, Japan and Turkey
FDI – Foreign direct investment, FIPB – Foreign Investment Promotion Board
Greater focus on infrastructure
• Infrastructure investment is a major focus area for the government
• Government of India (GOI) envisions airport infrastructure investment of USD7.5 billion under the Eleventh Five Year Plan (2007-12)
Liberalisation, Open Sky Policy
• GOI approved establishment of Greenfield airports under PPP mode in 2008
• New regulatory body (Airport Economic Regulatory Authority) set up in 2009
• Increased traffic rights under bilateral agreements with foreign countries
Encouragement to FDI • 100 per cent FDI under automatic route for Greenfield projects
• 100 per cent FDI for existing airports is also possible with an approval from FIPB
Taxes and other sops • 100 per cent tax exemption for airport projects for a period of 10 years
• Airport developers allowed to charge passengers development fees
21 21 For updated information, please visit www.ibef.org
AAI leads the way in airports infrastructure investment
GROWTH DRIVERS
Airports NOVEMBER
2011
Metro airports
• Work involves modernising and expansion; these include
• Chennai airport at a cost of USD376.7 million
• Kolkata airport at a cost of USD404.6 million
Non-metro airports
• Work covers upgrading and modernising; estimated cost is USD1 billion
• 35 airports including Ahmedabad, Amritsar, Bhopal, Jaipur, Pune and Goa
• 9 have already been completed
North East India
• Developing airports in Sikkim, Arunachal Pradesh and Nagaland
• Pakyong Airport (Sikkim) costing USD64.5 million to be completed by 2012
• Cheitu Airport (Nagaland), Itanagar Airport (Arunachal) in approval stage
22 22 For updated information, please visit www.ibef.org
Private sector investment in airports rising … (1/2)
GROWTH DRIVERS
→ Recourse to the Public Private Partnership (PPP) model has boosted private sector investments in airports
→ PPP route for five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) most noteworthy
Airports NOVEMBER
2011
• Increasing share of private sector in equity component of major airports –
• 74 per cent share in IGI Airport (Delhi); GMR is the largest shareholder (54 per cent)
• 74 per cent share in CSI Airport (Mumbai); GVK is the largest shareholder (50.5 per cent)
• 74 per cent share in RGI Airport (Hyderabad); GMR is the largest shareholder (63 per cent)
23 23 For updated information, please visit www.ibef.org GROWTH DRIVERS
Airports NOVEMBER
2011
Participation in international
airport projects
Terminal 3 construction in Delhi completed in 2010
Total cost
USD8 billion
Greenfield projects with private sector participation
PPP format likely to continue
USD2.6 billion of investments likely
Private sector investment in airports rising … (2/2)
Delhi (Modernisation,
Terminal 3)
Mumbai (Modernis-
ation)
Hyderabad
Bengaluru
Bijapur Airport
Shimoga Airport
Hassan Airport
Gulbarga Airport
24 24 For updated information, please visit www.ibef.org GROWTH DRIVERS
Foreign players are showing increasing interest in the sector
Airports NOVEMBER
2011
Major Foreign Players Airport Stake Description
Bid Services Division (Mauritius) Limited
Mumbai International Airport Pvt Ltd 13.5 International service, trading and distribution company
based in South Africa.
Airports Company South Africa Global
Mumbai International Airport Pvt Ltd
10 Operates and owns ten airports in South Africa.
Frankfurt Airport Services Worldwide
Delhi International Airport Pvt Ltd 10
Global airport operator that offers airport management services including terminal and traffic management, baggage and cargo handling, aviation
ground handling
Malaysia Airports Holdings Berhad
Delhi International Airport Pvt Ltd 10 Operates and manages 38 commercial airports in
Malaysia Hyderabad International Airport Pvt Ltd
11
25 25
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
26 26 For updated information, please visit www.ibef.org SUCCESS STORIES: DELHI, MUMBAI
IGI International Airport, Delhi—a compelling success story
→ 4th in the world at the ACI Annual Service Quality Awards (category: handling 15-25 million passengers)
→ Also declared the most improved airport in the Asia Pacific region
→ New Terminal 3 won the British Construction Industry Award for the best international project in 2010
Source: Delhi International Airport Ltd, Aranca Research Notes: ACI – Airports Council International
FY – Indian financial year (April – March)
Airports NOVEMBER
2011
PHASE I
Operational status Completed on Mar-2010 Ongoing 20-year project
Area (acres) 1907 5106
Passenger handling capacity per annum
34 million 100 million
FINAL FACTS AND FEATURES (FY10)
Passenger Traffic : 25 mn
Aircraft movement: 0.2 mn
Cargo : 0.4 mn tonnes
Retail space: 0.2 mn sq feet
Apron area: 6.7 mn sq feet
Multi level car park: 4300/day
(mn: million; sq: square)
Phase 1 of modernisation of IGI International Airport (at a cost of INR86 billion) involved renovation of terminals 1A, 1B, 1C and Terminal 2. It also included construction of a new domestic terminal along with an integrated passenger terminal (Terminal 3)
27 27 For updated information, please visit www.ibef.org
CSI International Airport —harnessing the power of PPP
Airports NOVEMBER
2011
→ 1st in India for 2Q10 at the ACI Annual Service Quality Awards (category: handling > 15 million passengers)
→ Also ranked 4th in the world for 2Q10 in the 15-25 million passenger category
→ 23rd across all categories among a survey of 146 international airports in 2Q10
Passenger handling capacity per annum
Cargo handling capacity per annum
1 million tonnes
40 million
FACTS AND FEATURES
In FY10, CSI handled -
• Passenger traffic: 25.6 million
• Cargo movement: 0.5 million tonnes
• Modernisation of the Mumbai International Airport will entail investments worth INR70 billion over a period of 20 years
• Government of India to provide INR58 billion
• Parts of the project completed till now:
• Phase I (2008): New airport lounges, retail outlets, duty-free shops, temporary cargo facilities, and multilevel car parks
• Phase II (2010): Involved construction of a new terminal at Sahar, a parallel runway, and new cargo facilities
Source: Mumbai International Airport Ltd, Aranca Research Notes: ACI – Airports Council International
2Q10 – Second quarter of 2010
SUCCESS STORIES: DELHI, MUMBAI
28 28
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
29 29 For updated information, please visit www.ibef.org OPPORTUNITIES
Opportunities
Airports NOVEMBER
2011
• Indian aviation sector likely to see investments totalling USD150 billion
• GOI expects 64 per cent (of USD7.5 billion) investments in airports during 2007-12 to come from the private sector
• Success of PPP formats will raise investment in existing and greenfield airports
• Growing air traffic and fleet expansion accentuating the need for MRO facilities
• India has only one established third-party MRO currently
• Location advantage - No MRO facility within a 5-hour fly zone of India (nearest ones – West: Dubai; East: Singapore)
• Airport developers can now draw on wider revenue opportunities such as retail, advertising and vehicle parking
• Future operators will benefit from greater operational efficiency due to satellite based navigation systems like ‘Project Gagan’ which is in development phase
Policy support and demand growth unlocking large investment potential
Huge potential to develop India as an MRO hub
Leverage on non-aeronautical revenues, improved technology
Notes: ‘Project Gagan’ is directed towards transitioning from a ground-based navigation system to a satellite-based one. AAI and ISRO are jointly working on this. A Space Based Augmentation System (SABS) will be operational by 2013
MRO – Maintenance, repair and overhaul GOI – Government of India
PPP – Public Private Partnership
30 30
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: Delhi, Mumbai
Opportunities
Useful information
For updated information, please visit www.ibef.org
Airports NOVEMBER
2011
31 31 For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations
Airports Authority of India (AAI) Rajiv Gandhi Bhawan, Safdarjung Airport, New Delhi –110 003 Phone: 91 11 24632950 Directorate General of Civil Aviation (DGCA) Aurbindo Marg, Opp. Safdarjung Airport, New Delhi –110 003 Phone: 91 11 24622495 Fax: 91 11 24629221 E-mail: [email protected], [email protected]
Airports NOVEMBER
2011
32 32 For updated information, please visit www.ibef.org
Glossary
→ AAI: Airports Authority of India
→ ACI: Airport Council International
→ CAGR: Compound Annual Growth Rate
→ FDI: Foreign Direct Investment
→ FY: Indian Financial Year (April to March) → So FY10 implies April 2009 to March 2010
→ GOI: Government of India
→ INR: Indian Rupee
→ MRO: Maintenance, repair and overhaul
→ PPP: It could denote two things (mentioned in the presentation accordingly) –
→ Purchasing Power Parity (used in calculating per-capita GDP – slide 12, GROWTH DRIVERS) → Public Private Partnership (a type of joint venture between the public and private sectors)
→ USD: US Dollar
→ Conversion rate used: USD1= INR 48
→ Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
Airports NOVEMBER
2011
33
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Disclaimer
For updated information, please visit www.ibef.org DISCLAIMER
Airports NOVEMBER
2011