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Airport Construction Management: Prof. Abhishek Shrivas

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Airport Construction Management

Prof.
Abhishek
Shrivas
Introduction to Indian Airport Industry

 The civil aviation industry in India has emerged as one


of the fastest growing industries in the country during
the last three years. India is currently considered the
third largest domestic civil aviation market in the
world.
 India is expected to become the world’s largest
domestic civil aviation market in the next 10 to 15
years, as per Mr Jayant Sinha, Union Minister of State
for Civil Aviation, Government of India.
 The Civil Aviation industry has ushered in a new era of
expansion, driven by factors such as low-cost carriers
(LCCs), modern airports, Foreign Direct Investment
(FDI) in domestic airlines, advanced information
technology (IT) interventions and growing emphasis on
regional connectivity.
CAGR
Compound Annual Growth Rate is not an accounting term, but it is
often used to describe some element of the business, for example
revenue, units delivered, registered users, etc. (CAGR) is a business
and investing specific term for the geometric progression ratio that
provides a constant rate of return over the time period.
we will compute the CAGR over three periods. Presume that the
year-end revenues of a business for four years, V(t) in above
formula, have been:
Year-End12/31/2004,12/31/2007Year-End

Revenue9,000-------13,000 = 2007 - 2004 = 3


Therefore, to calculate the CAGR of the revenues over the three-
year period spanning the "end" of 2004 to the "end" of 2007 is:

- it's a smoothed growth rate per year.


Market Size
 India’s passenger* traffic grew at 16.52 per cent year on year
to reach 308.75 million. It grew at a CAGR of 12.72 per cent
during FY06-FY18.
 Domestic passenger traffic grew YoY by 18.28 per cent to
reach 243 million in FY18 and is expected to become 293
million in FY20E. International passenger grew YoY by
10.43 per cent to reach 65 million in FY18 and traffic is
expected to become 76 million in FY20E.
 In FY18, domestic freight traffic stood at 1,213.06 million
tonnes, while international freight traffic was at 2,143.97
million tonnes.
 India’s domestic and international aircraft movements grew
14.40 per cent YoY and 9.40 per cent YoY to 1,886.63
thousand and 437.93 thousand during 2017-18, respectively.
 As of March 2018, there are nearly 550 commercial aircraft
in operation in India.
Investments
 According to data released by the Department of Industrial Policy
and Promotion (DIPP), FDI inflows in air transport (including air
freight) between April 2000 and December 2017 stood at US$
1,608.51 million. The government has 100 per cent FDI under
automatic route in scheduled air transport service, regional air
transport service and domestic scheduled passenger airline.
However, FDI over 49 per cent would require government
approval.
 India’s aviation industry is expected to witness Rs 1 lakh crore
(US$ 15.52 billion) worth of investments in the next five years.
 The Indian government is planning to invest US$ 1.83 billion for
development of airport infrastructure along with aviation
navigation services by 2026.
Key investments and developments in
India’s aviation industry include:
 AAI is going to invest Rs 15,000 crore (US$ 2.32
billion) in 2018-19 for expanding existing
terminals and constructing 15 new ones.
 In June 2018, India has signed an open sky
agreement with Australia allowing airlines on
either side to offer unlimited seats to six Indian
metro cities and various Australian cities.
 The AAI plans to develop Guwahati as an inter-
regional hub and Agartala, Imphal and Dibrugarh
as intra-regional hubs.
 Indian aircraft Manufacture, Repair and Overhaul
(MRO) service providers are exempted completely
from customs and countervailing duties
Government Initiatives
 Allocation to Civil Aviation Ministry has been tripled to
Rs 6,602.86 crore (US$ 1,019.9 million) under Union
Budget 2018-19.
 In February 2018, the Prime Minister of India launched
the construction of Navi Mumbai airport which is
expected to be built at a cost of US$ 2.58 billion. The
first phase of the airport will be completed by end of
2019.
 The Government of Andhra Pradesh is to develop
Greenfield airports in six cities-Nizamabad, Nellore,
Kurnool, Ramagundam, Tadepalligudem and
Kothagudem under the PPP model.
 Regional Connectivity Scheme (RCS) has been launched
under the policy
Road Ahead
 India’s aviation industry is largely untapped with
huge growth opportunities, considering that air
transport is still expensive for majority of the
country’s population, of which nearly 40 per cent
is the upwardly mobile middle class.
 The industry stakeholders should engage and
collaborate with policy makers to implement
efficient and rational decisions that would boost
India’s civil aviation industry. With the right
policies and relentless focus on quality, cost and
passenger interest, India would be well placed to
achieve its vision of becoming the third-largest
aviation market by 2025.
Regulatory Bodies
 Ministry of Civil Aviation (MoCA)
 Director General of Civil Aviation
(DGCA)
 Bureau of Civil Aviation Security (BCAS)
 AAI (Airport authority of India)
 Airport Economic Regulatory Authority
(AERA)
Executive summary
Advantage India
Major Airlines operating in Country
Major Airports
Private sector participation
Porter’s Five Force
Framework
analysis
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS
Policy Support Aiding Growth
Private Sector Investment in India Rising
Successful PPP projects in India
OPPORTUNITIES
Thank You

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