INDIAN developers are looking to build no-frills terminals to help cashstrapped carriers cope with massive fuel prices.
The founder of low-cost carrier Air Deccan, GR Gopinath, mooted the idea some time ago but it was not well received. Back then, budget passenger traffic was growing more than 25 per cent a year and the industry was turning in a profit.
But soaring oil prices have changed things. Carriers are bleeding red ink and have had to hoist fares, leading to a big drop in business.
No-frills terminals at existing airports in India's main cities - Mumbai, Bangalore, Delhi, Kolkata and Chennai - are now seen as a possible answer to keep costs down.
In Europe and the US, low-cost carriers take off from secondary airports or during off-peak hours from main airports to help keep landing, parking and airport charges lower. India's major airport developer GMR Group wants to build a no-frills terminal at Hyderabad airport by 2011-12.
And a similar terminal has been suggested for Delhi international airport, which GMR is renovating. The joint venture (JV) company that runs the new 25 billion rupee (S$792.5 million) Bangalore International Airport is also looking at adding a low-cost terminal.
The boss of the JV between the Karnataka government and the Airports Authority of India, Siemens Projects Ventures, Larsen and Toubro and Unique Zurich Airport says the proposal will be discussed this month. "A low-cost terminal, which can be built by December 2009, will help decongest the airport and is one of the most promising solutions because it can be realised fast and take a portion of passengers," says Albert Brunner.
GMR, meanwhile, is also looking at building relatively low-cost greenfield airportsin smaller cities. GMR reckons that in the city of Pune, close to commercial hub Mumbai, a "low-cost" airport could be built for 10 billion rupees, while cities such as Coimbatore, Udaipur or Amritsar could have new airports for 5 billion rupees. Cities with an operational runway could even have a low-cost terminal for 1.5 billion rupees.
So far, India's aviation infrastructure has not been conducive to profitable low-cost operations. But this looks like changing.
This story was first published in The Business Times on July 1, 2008.
