Report - Aviation Outlook India 2009

Drawing the spotlight on opportunities and challenges in the development of aviation infrastructure, Aviation Outlook India 2009 was organised by Singapore-based Terrapinn Pte Limited in Mumbai from June 30 to July 1.

As an aviation-related event, the conference was held at a time of deep anxiety for the industry and hence generated interest and curiosity among participants and delegates alike. Delegates and speakers included important functionaries from Indian and regional airports and airlines, besides the Centre for Asia Pacific Aviation (CAPA).

Much to Mull Over

Peter Harbison, Executive Chairman, CAPA, chaired the Opening Session admirably and set the tone in his introductory remarks, which more or less summed up the overall economic situation and its impact on the aviation industry. He painted an optimistic picture for the aviation industry in India with the proviso that the government took note of the concerns of the airlines, which appeared to be tottering due to mounting and continual losses across the spectrum of airlines, from the public sector Air India to the smallest private operator. The historic shift over the past three years in India—with genuine deregulation, policy liberalisation, enhanced public awareness of opportunities and efforts at revitalising the aviation infrastructure—was also highlighted.

The section on ‘Market Outlook and Government Initiatives in Propelling Aviation Growth and Attracting Foreign Investment’ included a panel discussion on ‘Assessing the Potential in Investing in India and Identifying Opportunities Presented by the Current Economic Downturn’. Ng Tim Ping, VP-India for Changi Airports International, Tom Ronell, CEO, Istithmar World Aviation Holdings, and Ansgar Sickert, MD, Fraport India spoke ebulliently about the opportunities but were somewhat subdued while discussing the bureaucratic obstacles that accosted potential bidders in the Private Public Partnership (PPP) models being adopted for the new airports. Harbison next addressed the issue of ‘Establishing Essential Regulations, Policies and Investment to prepare India for the Next Wave of Growth’.

Tomorrow Is Now

The next panel discussion on ‘Meeting the Challenges of Today while Creating a Climate for Expansion and Development’ elicited views from Adel Abdulla Ali, CEO, Air Arabia, Captain A.K. Sachdev, Chief Operations Officer, Go Air, Tara Naidu, Chief of Commercial, Air India Express, and was moderated by Harsha Subramaniam, News Editor and Anchor, CNBC-TV18. The discussion weaved its way through an assessment of the importance of aviation infrastructure development in creating capacity for growth in preparation for the next wave of economic expansion. Ali then discussed opportunities and challenges for foreign airlines to access the Indian market with emphasis on opportunities of the Middle East-India route in the current economic environment, the open skies policy and its impact on the aviation industry.

The post-lunch sessions addressed India’s aviation infrastructure development. The first speaker was Kapil Kaul, CEO, Indian Subcontinent, CAPA, who dealt with ‘Reviewing Viable Aviation Infrastructure Development Opportunities, Suitable PPP Models and Financing Avenues’. He began by reviewing the latest policies with respect to aviation infrastructure development, identified viable immediate investment opportunities and discussed successful PPP models in India, addressing key legality, taxation and risk issues. Marcel Hungerbuehler, CEO, Bangalore International Airport then covered the Greenfield airport model on the PPP basis. He touched upon the problem of overcoming regulatory and financial challenges of building Greenfield airports under the PPP model and identifying potential revenue streams which would facilitate expansion of the airport.

In the next session, P. Seth, Member of Operations, Airport Authority of India, spoke on ‘Identifying Investment Needed in Airspace Management to Support the Next Wave of Growth in the Aviation Industry’ essentially making an assessment of future growth potential and the implications for Air Traffic Management of new aircraft, new routes and expanding capacity.

Next, Kaul moderated an airport operator discussion panel consisting of P. Seth, A.C.K. Nair, Airport Director, Cochin International Airport, P.S. Nair, CEO, Delhi International Airport Ltd., and Marcel Hungerbuehler, CEO, Bangalore International Airport. The discussion was steered through the main theme of ‘Developing Sustainable Profitable Business through Strategic Airport Infrastructure Development and Investment’ and addressed new airport infrastructure development models such as creating an aerotropolis to include shopping malls, leisure and culture centres, air cargo, hotels, entertainment centres and other commercial aviation businesses at the airports.

A Time to Review

Day Two was kicked off by Kaul chairing a panel comprising Tim Peng Ng, Server Aydin, Chief Commercial Officer, Istanbul International Airport, Captain A.K. Sachdev, COO, GoAir, and Bhupesh Joshi, Associate Vice President of Airport Services, Kingfisher Airlines, discussing “The Development of ‘Low Cost Airports’, ‘Non Operational Airports’ and ‘Military Airports’ to enhance connectivity across India and to support the growth of LCCs”. The common refrain through the discussion was the need for separate airports or separate terminal buildings within the same airports to cater for the LCCs, who were bleeding due to the high cost of operations at the new airports due to the User Development Fees and Airport Development Fees.

This discussion was supplemented with a talk by Samyukth Sridharan, Chief Commercial Officer, SpiceJet, on ‘Tackling the Low-Cost Airline Models in India’ in which he spoke of managing costs in the high cost environment, new revenue streams available for LCCs in India, and developing domestic routes to tap into the opportunities of Tier II cities. Rahul Sharma, Partner, IBM Global Business Services spoke on ‘New Ideas on Ensuring Profits to Achieve Long-term Growth in the Aviation Industry’.

Stefan Heuss, MD, Cockpit4U, then addressed the subject of ‘Achieving Maximum Efficiency and Profitability through Strategic Human Resource Development’ dwelling on investment in training in the current downturn to prepare for future growth, outsourcing solutions to achieve cost effectiveness and identification of training models adopted by international airlines to enhance corporate efficiency. Nalin Jain, Country Director, GE Aviation, then addressed the allimportant issue of ‘Reviewing Key Strategies & Practices on Minimising Fuel and Maintenance Costs’.

Next followed a panel discussion chaired by Peter Harbison, Executive Chairman, CAPA, and consisting of Koustav Dhar, COO and ED, MDLR Airlines, Bhupesh Joshi, Associate Vice President of Airport Services, Kingfisher Airlines, Virender Pal, Chief Technology Officer, SpiceJet, Nalin Jain, Country Director, GE Aviation. The theme was ‘Optimising Airline Operational Efficiency and Cost Management’ and the discussion centred around identifying ways and means of achieving greater cost-efficiency and effectiveness by optimising both IT work methods as well as infrastructure expenditure.