Your passenger numbers have grown strongly in recent years. What is driving the growth? What have been your best-performing markets?
The addition of new airlines and new routes to familiar destinations are the main driving factors of growth. Domestic traffic continued to be the main driver of growth in 2018, with Tier 2 and Tier 3 cities being the main contributors, compared to metro routes.
The Kempegowda International Airport, Bengaluru (BLR Airport) has also registered growth in international traffic with over 40 incremental international departures per week added to destinations like Bahrain, London, Kuala Lumpur, Hong Kong, Phuket, Bangkok, Singapore and Male.
Among the airports in South India, BLR continues to be the destination of choice for both domestic and international flights. Delhi, Mumbai and Hyderabad are the most preferred domestic destinations, while Dubai, Singapore and Kuala Lumpur are the top three international destinations ex BLR.
The traffic at BLR Airport has grown exponentially over the past few years and we expect to close this year (FY2018-19) at around 33.4 million passengers, registering an overall passenger growth of 24.1 percent (domestic at 25.3 percent and international at 16.9 percent). Similarly, the ATMs at BLR Airport are also growing at a healthy pace and we expect to witness a year-on-year growth of 23.9 percent for the FY2018-19 (domestic at 25.6 percent and international at 12.2 percent).
What have been your most-notable new routes added? How did you manage to secure them?
BLR added several new routes in 2018-19. Go Air has started a direct connection to Phuket and Male. Indigo has started flights to Male, Bangkok, Kuala Lumpur, Hong Kong and Phuket; Air India started operations to Bangkok and London while Air India Express launched a round-trip flight to Singapore – flying four times a week. Among International airlines, Gulf Air commenced daily operations to Bahrain.
The new domestic destinations added to the network are Kanpur, Gorakhpur and Udaipur (Spice Jet); Udaipur and Prayagraj (erstwhile Allahabad) (Indigo); Aizawl via Guwahati (Jet Airways) and Kolhapur (Alliance Air). In addition, Turkish Cargo, one of the fastest growing air freight services, has started operating two flights a week, flying between Istanbul and Bengaluru.
BLR Airport, with the right traffic potential and ideal geographical location, finds itself in a sweet spot as airlines are eager to expand their operations from Bengaluru because they can easily cover all key markets located within a four-to-six hour flying range.
The large corporate/ business class traffic, coupled with the young working population with access to high disposal income makes Bengaluru an ideal gateway to launch new routes to both domestic and international destinations.
What geographical markets are you targeting?
Resurgent growth translates into the need for new routes and the addition of aircraft to the existing base. We continue to work with our airline partners to offer passengers attractive routes that connect Bengaluru to some of the most important destinations in India and abroad. The new services will further bolster the economy of the city and enhance the reputation of BLR Airport as the ‘Gateway to the New India’.
In the short term, BLR Airport is looking to establish direct non-stop connectivity to regions like Australia, Africa, China, Philippines, Indonesia, South Korea and the US. Recently, Japan Airlines announced the launch of their Bengaluru (BLR) – Narita (NRT) flight effective March 2020, which will be a great addition to the overall network.
Can you provide an overview of the infrastructure developments you are undertaking in the coming years and explain how they will transform the airport?
The Terminal 2 will be a first-of-its kind ‘Terminal in a Garden’ — making BLR Airport a natural extension of Bengaluru's much-heralded green aesthetics. The outdoor garden will enhance the look, while simultaneously keeping the feel of a natural forest that includes water bodies and natural topography.
Technology will be woven into every aspect of T2 – from entry into the Airport campus till boarding the aircraft – every point in the passenger’s travel will be touched by various aspects of technology. The cultural diversity and unique art forms of Karnataka will be showcased through the dynamic environment, art installations and a cultural museum at the terminal.
The second runway is expected to be completed by October 2019 and the construction of Terminal 2 is scheduled for completion by March 2021. BLR Airport is cognisant of the fact that Indian carriers are inducting new aircrafts into their fleet at massive pace and in order to meet such a rapid demand, BIAL is investing into building new parking bays and related airside infrastructure to support this demand.
The proposed multi-modal transport hub (MMTH) at the BLR Airport is expected to serve as the centrepiece of the central forecourt development and integrate the existing terminal, T2, hotel and other forecourt developments. The proposed MMTH will also, eventually, serve as a transport interchange between multiple transport models, including the planned Bengaluru Metro connection, public bus services, taxis and other modes of future transport.
BIAL is also establishing an in-house solid waste processing and treatment plant at the BLR Airport. The plant will support BIAL’s sustainability initiatives by increasing recyclables and completely obliterating the need for a landfill. BIAL wants to be self-sufficient in meeting its energy and water demand and presently almost 70 percent of its energy demand is met through in-house generated solar energy. Similarly various efforts like rainwater harvesting have resulted in bringing-up the water table in and around the airport region.
Overall, phase two of Kempegowda International Airport, Bengaluru will provide a huge boost to the connectivity of people and goods of the State and provide the much needed capacity that a growing city like Bengaluru deserves. Once operational, the Airport will create more opportunities for businesses at the airport and fuel the economic growth of the region and country.
How challenging is the Indian aviation sector currently?
The aviation sector in India is one of the most difficult place to do business for airlines and is probably the only region where, despite growth in traffic at a CAGR of 20 percent YoY, airlines are losing money. In FY2018-19, airlines in India will collectively declare a loss of about $1.5bn.
There are multiple factors that lead to such a situation – including but not limited to – rapid capacity induction by Indian carriers leading to downward pressure on fares, infrastructure challenges related to airspace congestion, non-availability of slots at peak hours, higher taxation structures compared to their foreign counterparts, etc.
The recent rise in fuel prices, coupled with the depreciation of the rupee, also did not help the cause of the airlines making the industry go through difficult times.
Having said that, there is enormous potential for the aviation industry as more people are taking to the skies amid rising incomes and the sector's expansion. Due to the surge in passenger volumes, growing demand for air travel and increased scope of building regional connectivity, strong growth can be anticipated even in the coming years.
With the development of world-class airport infrastructure and policies focused on cost and passenger interest, India would be well placed to achieve its vision of becoming the third-largest aviation market by 2025.
Has the Udaan scheme performed as expected?
It has been slightly over a year since the first round of UDAN routes were awarded to airlines and a few months ago, the list of routes/airlines for round three of the UDAN scheme we released. The impact and the outcome that the government was looking to achieve through UDAN scheme has been met, as approximately 25-30 new airports have commenced operations under this scheme.
The people based out of such Tier 3 markets have – for the first time – an opportunity to connect directly with Tier-2 and metro regions through air connectivity.
BIAL consistently works with the government through the consultation process to ensure optimal roll-out of policies and initiatives. BIAL facilitates all requests that come in under the UDAN scheme and works with airlines to ensure adequate facilities are put in place to bolster the scheme.