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AIRPORT PROFILES Last modified on June 13, 2013

Passage to India

Oliver Clark talks to GVK Power and Infrastructure Limited chairman, Sanjay Reddy, about his company’s plans to modernise its airports in India and further afield.

Standing on the waterfront in central Mumbai is the Gateway to India; a huge stone archway built in Victorian times to celebrate the arrival of what has become an enduring image of the city and an attraction visited by millions every year.

So, it is perhaps fitting that later this year, Mumbai’s Chhatrapati Shivaji International Airport (CSIA) will unveil its own gateway to India which it hopes will be equally iconic – the revamped Terminal 2.

Dubbed ‘T2’, the refurbished facility will consist of four integrated levels covering more than 439,000sqm, with new taxiways and aprons, 21,000sqm of retail space and give the airport the capacity to cater to 40 million passengers annually.

Offering what has been billed as unrivalled levels of customer service and state-of-the-art facilities, T2 will handle the airport’s international operations and will be the first thing millions of international tourists experience as they arrive in India for the first time.

A huge exhibition area will showcase Indian art through the centuries with touch screens for visitors to explain each piece and learn about its history and origin.

It is also the culmination of years of work by operating company GVK to modernise and expand CSIA’s facilities to ensure it can handle the ever-growing passenger numbers registered by the gateway, while also positioning it to become a leading international hub.

“I think the opening of Terminal 2 represents one of the most important milestones in the history not only of CSIA but also of Mumbai,” says Sanjay Reddy, chairman of GVK Power and Infrastructure Limited.

“T2 will make CSIA a gateway to both the city of Mumbai and the hinterland for millions of international passengers and, more importantly, we are setting new benchmarks in ways of operating, it will receive global recognition for its design and quality of service.”

Reddy, the son of GVK founder GV Krishna Reddy, has a diverse portfolio of businesses to oversee. They include energy, resources, airports and transportation infrastructure.

And he has steered the group’s ever-expanding airport profile, which now includes Chhatrapati Shivaji, Bengaluru, and, will soon include a terminal at Denpasar in north Bali and a new greenfield airport at Yogyakarta.

Reddy says the T2 project was not without its challenges. GVK planners were hampered in the first instance by the fact the airport is hemmed in by urban development making expansion difficult. Delays and the region’s weak financial outlook also had a knock on effect on passenger growth forecasts, but the construction is now on track.

The new facility represents the cornerstone of GVK’s route development strategy, which seeks to attract new carriers from Europe, Asia, Russia and the CIS and North America under the campaigning title “A hub in the making”.

With this in mind, T2 has been designed to handle large volumes of connecting passengers and to allow airlines to easily organise banks of arrivals and departures, two elements that are seen as crucial by GVK to make CSIA an enticing proposition for long-haul carriers.

While its ultra modern facilities will no doubt prove attractive to airlines, Mumbai serves as the beating heart of India’s financial, business and entertainment industries, many offering compelling reasons for carriers to come, says Reddy.

 “I think airlines are going to be attracted to Mumbai because it is the commercial centre of India and ideally located for international routes. There is currently a good mix of different carriers, but we are targeting long-haul airlines connecting Europe and the US and emerging markets such as China, Africa and South America,” says Reddy.

According to its route development action plan, GVK is seeking new services to Manila, Ho Chi Minh, Jakarta, Beijing, Guangzhou, Moscow and Tehran in the next one to two years, followed by services to Rome, Lisbon, Manchester and Seoul amongst others over the coming decade.

The airport’s efforts are already bearing fruit and it celebrated a new Air China service to Chengdu last year.

Customer service

The new Terminal 2 represents the culmination of GVK’s brief to improve the customer experience and capacity of CSIA.

When it was awarded the contract to operate CSIA in 2006, the airport was congested, its facilities were in a bad state and it had a reputation among passengers for delays and lengthy queues.

Proof of what has been achieved since can be found in the host of awards for customer service and safety, including the prestigious Golden Peacock National Quality Award for 2012 from India’s Institute of Directors, and the ACI ASQ award for 2011 in the 25-40 million passengers per annum category.

For Reddy the awards are a nice recognition of what has been at the core of GVK’s business philosophy for decades.

“As far as customer service is concerned, I believe it is of paramount importance. Our family business began in the hospitality sector and we have hotels as well as airports; as a family, we very much believe in hospitality as the core of our business,” he says.

But Mumbai was only the beginning of GVK’s airport ambitions, and just three years after taking over Mumbai, the company formed the major part of a consortium that was awarded the contract to manage Bangalore’s newly opened Bengaluru International Airport.

 

Navi Mumbai

With scope to expand CSIA limited by its location, the Indian government has given the go-ahead for a new international airport to be built on the outskirts of the city.

Named Navi Mumbai International Airport, it will be managed by a private company on a similar model to CSIA. So does Reddy see it as a potential threat? Not at all he says, as Navi is intended to be primarily a domestic airport.

“It is not going to be a threat at all. We have a very unique situation. Perhaps Mumbai is the only case in the world in which an international airport is rebuilt but because of traffic increases,

a new secondary airport is built. Typically, the existing airport is destroyed or turned into a secondary airport.”

Reddy also points out that GVK can bid to also run Navi Mumbai and if this contract was forthcoming “we would develop it as a complementary airport to the facility we have here and not competing for traffic.”

Bengaluru

Bengaluru’s traffic grew rapidly after its completion, and once again, the Indian government’s brief was that the private operator should expand the facility and improve services as befitting of an airport that serves as the home of the country’s burgeoning IT capital which has been described as the Silicon Valley of India.

A year after taking over Bengaluru, operating company Bangalore International Airport Ltd (BIAL) unveiled an ambitious development programme including the expansion of the existing Terminal 1 to cater for 36 million passengers.

Work began in August 2011 at a cost of $221 million, and involves the extension of the terminal in both directions with improvements including better access to seating, amenities and commercial facilities and smoother check-in and departure processing.

The project is expected to be completed by the summer of 2013.

“When we decided to expand Bengaluru, our priority first and foremost was to improve the passenger facility and expand the terminal because there was a dire need for more capacity as it was handling more than 12 million passengers. With the completion of this work, the facilities will be able to handle between 18-20 million,” explains Reddy.

Passengers will also experience “a next generation of facilities and amenities”, beams Reddy.

Meanwhile, BIAL is pursuing a route development strategy that centres on making Bengaluru the gateway to southern India. In 2011, the airport attracted six new international airlines including Etihad, Tiger, Cathay Pacific and Bangkok Airways.

According to Reddy, BIAL sees IndiGo and Jet Airways as partners who can help develop the airport’s regional network further.

Indonesia

In November 2012, GVK took a step in a new direction with the signing of a contract with Airports Authority of Indonesia (Angkasa Pura Airports) to manage to manage non-aeronautical commercial operations at Bali’s Ngurah Rai ‘Denpasar’ International Airport under a five-year operations and management contract.

Ngurah Rai is Indonesia’s second busiest airport after the capital, Jakarta, and is severly congested leading to the need for an overhaul of its facilties.

GVK also has signed a memorandum of understanding with the Indonesian government to develop an international greenfield airport in Yogyakarta in central Java.

Reddy is excited about the prospects of both projects.

“The government is very keen on the [Yogyakarta] project; there is a lot of potential as a tourism attraction but currently transport is severely limited.”

With GVK’s already long experience of managing and modernising overcrowded airports into award winning facilities, they should have little trouble with their new Indonesian projects.

Indian aviation – the facts
  • One state-owned airline (Air India), and six private airline groups
  • India has 130 airports. They include 17 that handle international traffic and around 80 which handle regular scheduled domestic services
  • Over 160 million passengers passed through India’s airports in 2012 – 60% of them being handled at privatised airports. This compares to just 40 million in 2002, when privatised gateways accommodated only 2% of the traffic
  • Low-cost dominates the domestic market, accounting for a 70% share of traffic
  • Passenger numbers are expected to reach 452 million per annum by 2021, making India the third largest aviation market in the world

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