WORLD ROUTES: Five Minutes with… I Prabhakara Rao, CEO, Delhi International Airport

Ahead of this year’s World Routes, Richard Maslen spoke to I Prabhakara Rao, chief executive of Delhi International Airport Limited, the consortium that owns and operates Indira Gandhi International Airport, the primary international airport of the National Capital Region of Delhi and its capital, New Delhi. The airport is a joint venture between of GMR Group (54 per cent), Airports Authority of India (26 per cent), and Fraport AG & Eraman Malaysia (ten per cent each) and will be the home base for the new full-service carrier revealed last month by Singapore Airlines and Tata Sons.

Q) Which key new air services have you attracted in the past 12 months among your airport portfolio and how will these meet with your development plans for the future?

A) “With the acquisition of the new Boeing 787 Dreamliner fleet by our hub carrier Air India, air service to Birmingham, Melbourne & Sydney has been added to our network in recent months. We do see a strong potential for air service to Rome, Milan, Moscow and Barcelona in the coming 12 months or so.

“Other than Air India’s impact on our international connectivity, we have added six more international destinations – Baghdad & Basrah through Iraqi Airways; Phuket through Thai Smile; Bishkek through Kyrgyz Airways; Kandahar through Kam Air and Nairobi through Kenya Airways. In addition, Ariana Afghan Airlines commenced service to Kabul, Mihin Lanka to Colombo and All Nippon Airways to Tokyo; although all three were existing destinations served by other carriers. We have also seen an increase in frequency to Bahrain, Guangzhou, Dhaka, Dammam, Dubai, Muscat, Riyadh and Sharjah.

“We also have a dense connectivity in our domestic segment, the growth over the past 12 months has come with an increase in frequency of at least an additional daily or more to Srinagar, Leh, Dharamsala, Allahabad, Amritsar, Patna, Pune, Udaipur, Bangalore, Chennai and Kochi.”

Q) What are your key target markets for future network development? Which are the growing markets from/to India?

A) “Over the past seven years, we have experienced a CAGR of 8.7 per cent for our domestic traffic. Our international traffic has grown at a steady CAGR of 9.7 per cent over the same time period. However, with the commissioning of T3 we have seen a remarkable increase in our transfer traffic which has seemingly grown at a CAGR of 27.7 per cent over the past seven years; and at an even higher rate over the past three years, coinciding with the commissioning of T3.

“We do forsee a huge potential for further connectivity into North America given the potential of O&D traffic that is currently unserved. Both North America and Asia have been a stable market with a CAGR of over eight per cent since 2007. The Middle East region has experienced a growth of around eleven per cent CAGR since 2007. Europe is at a low growth rate, however, we foresee high growth in the transfer traffic volume as European passengers capitalise on the Australia connections with the spread of our hub carriers connectivity into Europe. We also see growth in our connectivity to CIS countries and into Afghanistan.

“Overall, Africa and Australia remain major growth areas for India and Delhi is no different. Today both Africa and Australia are connected to Delhi. These regions have seen a growth of over 20 per cent CAGR since 2007 and we hope to see a similar sustained growth rate in coming time. South America and Latin America remain a far stretch for direct service as the passenger volumes for O&D traffic are low.”

Q) The Indian market has faced a challenging period. How has that impacted your development over the past couple of years?

A) “India lost a major player with the suspension of Kingfisher Airlines. From Delhi, Kingfisher operated 40 daily flights and due to their demise, we witnessed a significant capacity loss during 2012-13. It is only recently, that we are witnessing a recovery of our seat capacity thanks to the expansion of our domestic carriers - Indigo, Spicejet and Air India. However, the 2012–2013 time period has been challenging for global aviation in general though at Delhi, we are now seeing signs of recovery and growth.”

Q) What will be the key drivers of your airport infrastructure projects in India over the coming five years?

A) According to IATA, by 2020, air traffic in India is expected to reach the 450 million passenger mark, making India the third largest aviation market in the world! Such projections are reason enough to propel airport infrastructure investments. If these projections are to be believed, Delhi International Airport alone is expected to push some 90 million passengers. We are certain that the facility will continue to contribute to the economy of the nation, as a major aviation hub of South East Asia both in terms of direct economic impact and in terms of tourism development.

“As discussed earlier, we are concentrating on working with our domestic carriers in recovering the capacity that we lost last year. Fleet orders look solid and are showing a combination of B787s, A320s and B737s. Given this, we do see a major share of capacity being based at our airport and we have already planned to accommodate this capacity through dynamic planning for our existing infrastructure.

“As an airport we see major growth coming through transfer traffic as our carriers expand their connectivity out of Delhi. Our domestic carriers, Air India, IndiGo and SpiceJet have contributed to the growth in transfer passengers and we see that segment of traffic growing.”

Q) FDI has already seen the arrival of Air Asia in India and it has ambitious plans to change how Indian airlines operate. Would you consider changes to your infrastructure (a LCCT for example) or pricing mechanisms to support the arrival of such an airline at your facilities?

A) “We welcome foreign direct investment for our airlines. As healthy airlines are a boon for healthy airports. We will wait and watch the developments over the next few months, to reach a concrete long term strategy. However, given the current scenario we do not forsee any changes to our infrastructure. We have a commitment of partnering with our carriers and if any new airline wishes to expand with Delhi as their base, we will be ready to do discussions on long term partnerships.

Q) What are your ambitions for the next five years?

A) “As an airport we wish to spread our connectivity especially into unserved or underserved destinations with special focus to regions like North America, Australia and Africa. We wish to see more international airlines operate into Delhi from across the globe.”

We plan to be the number One Airport in terms of Quality and attain the top rank in ASQ ratings, in our category of airports. We are committed to serving our customers, the airlines and passengers, with impeccable care and strive to provide a safe, secure environment with a focus on operational excellence. We will always actively partner with our airlines to help them grow out of Delhi.”