Bangalore airport to go slow on expansion

Bangalore airport to go slow on expansion

Madhumathi D.S.

Bangalore, Oct. 20 Bangalore’s five-month-young airport, which was expected to have a dream take-off on the back of a phenomenal traffic growth during 2005-07, now seems to be going slow on its expansion plan in the face of a traffic decline.

“There has been a dramatic fall in monthly traffic for all airports in India since June 2008. We are currently conducting a study on the current trend and based on the results, which will be out in two-three months, we will take a decision on our next expansion plan,” the operator, BIAL, said in response to queries from Business Line.

Until a couple of months ago, its CEO, Mr Albert Brunner, was hoping to take up a mezzanine expansion now and a larger Rs 3,500-crore phase 2 in early 2009 with a second terminal, pending the board’s clearance.
Overall slowdown

Traffic numbers, it said, reflected the overall slowdown across the country. Admitted to feeling the pinch, it said, “The overall annual growth of passenger volume [at Bengaluru International Airport] has dropped to 3 per cent since June 2008” compared to an anticipated 8 per cent growth rate.

The Southern sector has been especially dented. “There has been a drop of approximately 15 per cent in the flights operating in the Southern sector (Kochi, Coimbatore, Hyderabad, Chennai) from Bangalore since May 2008. The Mumbai, Kochi, Coimbatore, Delhi, Goa, Hyderabad, Chennai and Pune routes have collectively seen a 12 per cent reduction in the number of flights,” BIA said.

The dip could also not have come at a worse time than now for BIAL, which is awaiting the Civil Aviation Ministry’s clearance to start collecting a user fee (UDF) from domestic fliers leaving the city.

The UDF is one of the main revenue sources for its ambitious expansion plan.

BIAL started collecting a user fee of Rs 1,070 each from its outbound international passengers from Day 1 of its operations.

Traffic did not pick up in late August and September when it should have done, as every year. “All over India May, June and July are low periods for the airline industry,” the operator said

Bangalore’s air traffic, the third highest in the country, was until a few months ago envy of some other larger cities. BIA opened in May 24, taking over 10-11 million annual passenger traffic from the HAL airport. In fact, the traffic growth was so large and unforeseen – from 4 million in 2002 to over 9 million in 2007 – that BIAL had to insert two unscheduled expansions into first phase of the project in 2006-07, a move that pushed the project cost from the original Rs 1,400 crore to Rs 2,500 crore.

That happily poised graph has changed its course downwards. Even as it completed 100 days in late August, BIAL saw it coming. Peak hour traffic did not grow to match the capacity, though BIA handled 2.42 million passengers, on the wing of 30 per cent rise in international airlines and air freight carriers into the city.

From 170 flights per day and 340 air traffic movements (ATMs) when it launched, BIA will now end the Summer ‘08 season with 162 flights (324 ATMs) per day. Winter ‘08 flights would see a small 1.5 per cent gain with 165 flights (or 330 ATMs). According to the operator, “Although the domestic air traffic reflects a [fall] of 1.5 per cent, the overall positive growth is due to the increased international flight operations from Bangalore.”

This is in spite of adding six new international carriers since it began services - Dragon Air, Tiger Airways, Oman Air, Air Mauritius and most recently Kingfisher Airlines and Jet Airways. International flights, BIA said, have increased over 230 per cent year on year for the Winter season.

No flight to or from BIA was suspended in September, but for an odd cancellation by the airline.

BIAL said the domestic UDF, once cleared, will be part of the airline ticket cost; the airlines will collect it while issuing tickets, as directed by the Directorate General of Civil Aviation. BIAL plans to set up counters to collect the fee by cash or credit card from those who have booked their tickets in advance but will be flying from the levy date.