‘New strategic power play uses aviation as driving force’

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SummaryRecently Maharashtra chief minister Prithviraj Chavan said the state was looking at an alternate site for the proposed Navi Mumbai airport.

Recently Maharashtra chief minister Prithviraj Chavan said the state was looking at an alternate site for the proposed Navi Mumbai airport. This was because some villagers were still resisting land acquisition at the current site. This meant that the airport will be delayed further. In an interview with FE’s Rhik Kundu, aviation research firm CAPA’s CEO South Asia Kapil Kaul discusses the need for the airport, a policy on bilaterals and other issues. Excerpts:

Does investing in a second international airport in Mumbai, and international airports in tier-2 cities and smaller towns like Mangalore, Bagdogra, Kannur (proposed), Aranmula (proposed), Nagpur, Coimbatore, Tiruchirapalli, Lucknow, and Varanasi, make sense?

Mumbai needs a second airport and it is a critical national issue, but not addressed seriously. However, I don’t see the second airport in Mumbai before 2020 as there is no certainty in resolving all outstanding issues. India needs continuous investments in airport development and a long-term approach to airport planning, including airside planning. Land scarcity will be a major issue and a barrier to expansion and perhaps, viability.

CAPA Research has estimated that bilateral requests from just four airlines from the Gulf —Etihad, Emirates, Qatar and Air Arabia— could be in excess of 150,000 seats a week in the coming years. How do you see this pan out?

CAPA expects continuing pressure to further open up bilaterals from key Middle East carriers as the scale of their expansion needs deeper and very liberal access to markets like India. The three top Gulf airlines have 519 aircraft in service with about 738 aircraft on order. Emirates alone has 385 aircraft under order, which includes 101 A380s. These are once in a generation expansion plans, and a new strategic economic power play is being constructed using aviation as the driving force, which includes using aircraft orders to leverage against protectionism. This has much larger implications across markets and India needs to have a strategy in place to deal with this massive challenge. We have to open up keeping India’s strategic and national interests in mind. Unfortunately, we have had a very ad-hoc approach to granting bilaterals.

Critics say that the development of a hub in proximity (Dubai and Abu Dhabi) would adversely impact the growth of Indian gateways as hubs. Recovery of investment and the benefits associated with a gateway airport will also be adversely impacted. Is this likely to happen?

Yes, all three carriers (Etihad, Emirates, Qatar) want to

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