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P.S. NAIR

CEO, GMR Airports Ltd

SESSION 1. Air Connectivity & Airport Competitiveness

Air Connectivity & Roles of Airports

1

Air Connectivity

&

Role of Airports

World Aviation Conference

2017

6th September 2017

Presented by :PS NairCEO – CorporateGMR Airports Ltd.

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Air connectivity supports 3.5% of global GDP

9.9 million

11.2 million

5.2 million

36.3 million

$664.4 billion

$761.4 billion

$355 billion

$892.4 billion

JOBS GDP

62.7 million $2.7 trillion

Tourism

Catalytic

Induced

Indirect

Aviation direct

Tourism catalytic

Induced

Indirect

Aviation

Direct

Source: Aviation Benefits Beyond Borders : July 2016 - Air Transport Action Group

3

Emerging markets will drive economic growth

Increasing GDP in PPP

Source: PwC, The World in 2050: How will the global economic order change?

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Aviation demand in emerging economies will drive

air connectivity growth as well

15,130

8,3307,570

3,310

2,960

1,170

1,150

1,630

Source: Boeing Current Market Outlook : 2016 - 2036

New aircraft requirement in various regions during 2016 to 2036

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New aircraft technology is changing network possibilities

Over 130 new routes that have been launched using a B787!

New aircraft technology is enabling

airlines to fly longer and cheaper

Several routes are now economically

feasible which could not be served

earlier with larger aircraft

New narrow-body aircraft

(A320neo/A321neo/B737max) will result

in new routes possible which will

unlock great tourism potential

( Eg. India – Europe on a narrow-

body!)

Source:Boeing

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Airline business model evolution driving air connectivity

35.9%

48.0%

59.2% 58.3%62.4%

58.1% 60.4%64.5% 62.4% 64.5% 66.2%

6.1%10.5%

14.9%18.5% 18.2% 16.5% 17.2% 17.7% 19.1% 18.9% 20.2%

Share of LCC Model in India

Domestic market Int'l market

• LCCs have grown rapidly in size across most

geographies

• As they have grown, they have developed new markets

as they try to operate to smaller cities and stimulate

demand

• Over the next few years, Long Haul Low Cost model

will transform international air connectivity

2007 2017

Source: IATA AirportIS. Note: The network shown in India’s map represents network by 3 largest Indian LCCs (IndiGo, SpiceJet, GoAir)

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Public policy and regulatory framework will influence air

connectivity significantly

Source: IATA AirportIS

Note: Blue lines indicate routes from ME (DXB, AUH, DOH) to US by ME carriers (EK, EY, QR), Red lines indicate routes by US carriers (AA, DL, UA)

• Global geo-political developments are impacting air connectivity immensely

• State-driven initiatives can catalyze air connectivity growth:

• UDAN - Ude Desh ka Aam Naagrik; (Let the common citizen of the country fly.)

• Launched in 2016 by Govt of India aimed at connecting Under-served & Un-served Routes in India

• In 1st phase 128 routes will receive commercial air services

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Air connectivity & airport competition

• Route network, frequency & choice of

airline options plays are critical for airports

which compete in overlapping geographies

• Airports which have wider choice of

destinations, frequencies and airlines can

use it as a competitive advantage

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Airports can facilitate air connectivity

Create Infrastructure Provide ground level

data and intelligence

Consolidate catchment

traffic

Facilitate co-operation

among stakeholders

Offer discounts &

incentives

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Thank You