India’s Congested Airports Slowing Down Air Traffic Growth
Travelers are screened by security personnel inside the newly inaugurated Terminal 2 building at the Indira Gandhi International Airport .(Photographer: Anindito Mukherjee/Bloomberg)

India’s Congested Airports Slowing Down Air Traffic Growth

Congested airports at India’s top cities will hamper air traffic growth in the world’s third-largest aviation market even as carriers add more aircraft to their fleet and fly to smaller cities.

India’s domestic air traffic is expected to grow 18-20 and touch 150 million in the year ending March 2019, according to Centre for Asia Pacific Aviation. CAPA reduced the forecast by at least 2 percentage points considering capacity constraints at large airports like Mumbai and Chennai.

The aviation think tank expects domestic traffic to reach 125 million in the year ending March. Airport operators are under-prepared for growth, CAPA India Chief Executive Officer Kapil Kaul said today in Mumbai.

That means most large airports are operating close to full capacity as at least 124 new aircraft would be inducted by March 2019—an increase of 25 percent. Mumbai will run out of space for new flyers by next year if the traffic grows at an annualised rate of 10 percent, according to CAPA’s Airport Saturation Capacity Index. Chennai, New Delhi and Kolkata would follow. At the same pace, other airports operated by the Airports Authority of India will exhaust capacity by 2022.

That’s when the government’s UDAN scheme is adding routes to connect smaller cities to the aviation grid. Of the new aircraft, around 22 will be used for UDAN that now aims to connect 60 smaller airports to the aviation grid.

“The number of aircraft in India is still minuscule,” SpiceJet Ltd.’s Chairman Ajay Singh said. “When the shift happens from trains to planes, people don't go back. Growth will remain strong despite oil prices going up.”

CAPA expects the crude price to hover around $70 a barrel, which would not pose a major threat to India’s aviation sector.

International passenger traffic in India is expected to reach around 65 million by the end of the current financial year. And it could touch 75 million by the end of March 2019, CAPA said.

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