Kempegowda International Airport. Pic: KGIAL PRO

On December 14, 2013, Bangalore International Airport Limited (BIAL) was renamed Kempe Gowda International Airport Limited (KGIAL). A new expanded terminal T1A was opened by Karnataka Chief Minister Siddaramaiah and Union Civil Aviation Minister Ajit Singh.

With this expansion, the terminal area has more than doubled from 73,347 sq.mt to 1,50,500 sq.mt. Infrastructure has been put in place to handle the growth in traffic expected for the next few years.

An overview of projection of facilities, done before the inauguration of new terminal

BIAL was opened on May 24, 2008, at Devanahalli, about 40 km from Bangalore city center. Before this, the defence ministry-run HAL airport in the city was being used for civilian flight operations. The IT boom, post-2000, led to an exponential growth in visitors to the city and at the time of closure of operations in 2008, the passenger traffic to HAL had touched about 10 million a year, almost three times HAL airport’s reported capacity.

Mired in lobbying and controversy

It may be recalled that the commissioning of the new airport project and closure of HAL airport was preceded by intense lobbying and acrimonious debate over the need for a new airport and its capacity. Albert Brunner, the then CEO of BIAL, in April 2008, in an interview to Citizen Matters, had strongly defended the capability of the BIAL to handle the increasing traffic, for two-three years.

The airport was designed to handle a peak hour demand of 2,730 passengers or 11 to 12 million passengers a year, he said. He also made the point that given the land at their disposal, the airport could be expanded, if and when required, to handle a passenger load of approximately 40 to 50 million a year.

Traffic projections never accurate

Interestingly, passenger traffic projections made at different points by different agencies appointed at that time, ranged from an underestimation to wild overestimations. For example, BIAL itself revised its early estimates of traffic twice, when it realized that the early estimates (in 2005) of 6 to 8 million a year by 2008 were gross underestimations.

This got revised later to 13.2 mn for 2008-09 and 23.6 mn for 2013-14, which today looks like an over estimation. The actual traffic, as per AAI figures, for 2008 -09 was 8.76 mn which peaked at 12.90 mn in 2011-12 and fell marginally to 11.99 mn in 2012-13.

Faulty design, construction

Problems with traffic projections and woes of airlines apart, the design of the airport and Concessional Agreement (CA) with BIAL also had come into criticism from certain quarters. In 2009, a joint house committee of the Karnataka Legislature reported to the Assembly that “the airport was not of international standards” and flayed “the multinational corporations for faulty design and construction, and poor quality of workmanship.”
The committee is also reported to have found serious lapses in the drafting of the CA saying it heavily favoured the private participants. It also charged Unique Zurich Airport, the foreign partner, of profiteering. However, the BIAL officials had told Citizen Matters that they have replied and responded to the points mentioned in the report.

No second airport within 150 km

Based on the growing traffic projections, Bangalore City Connect (BCC) and the Bangalore Chamber of Industry and Commerce (BCIC), had made a pitch for keeping the HAL airport running, proposing that BIAL share 4 mn passengers with HAL.

However, as per the agreement signed by the government with BIAL, there could be no other airport within a radius of 150 kms of BIAL. BCC on its part had estimated a traffic of 30.5 mn by 2013 if both the airports were kept operational! Of course it can be argued that no one anticipated the economic meltdown in the US and Europe nor the meteoric rise in fuel fares, which sapped the enthusiasm for air travel. Incidentally, the percentage ratio of domestic to international travel for Bangalore airport has continued to hover at around 80:20.

Meanwhile, the old debate of using HAL airport, in the city, as an additional airport resurfaced recently with Infosys executive chairman N R Narayana Murthy making a request to the new government for an airport near the IT hub of Electronics City. BIAL’s location in North Bangalore was a concern for the IT industry located in the South and East making it difficult for them to access the airport in reasonable time, he said.

Future to favour low cost airlines?

To put things in perspective, not only did air passenger traffic decline in 2012-13, most airlines were running in the red and accumulating huge losses. Kingfisher Airlines, which acquired low-cost carrier (LCC) pioneer Air Deccan, imploded under the burden of costs and reportedly wrong strategies.

On the other hand, Air-India, the only state run airlines, the “Maharaja in the sky”, which has been on crutches for a while, has been pushed even deeper into the red by a series of decisions made to strangle the remaining life out of it. On the contrary, the pure LCC (Low Cost Carriers) airlines seem to be doing much better than the Full Service (FSC) ones. The future, aviation analysts believe, favours those with a low-cost model.

However, this calls for adaptation to this model on the part of airport operators like BIAL. CAPA – Center for Aviation, an aviation think-tank, has observed that LCCs account for the majority of the domestic market, yet India has no low cost terminals, let alone a low cost airport. It thinks that recent modernisation programs undertaken at Indian airports have been focused on long haul operations instead of the significant movement expected in narrow body aircrafts, in the near future.

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