25.9.11

Of low frill airports



Low-frills airports may finally get a push in India, with the government mulling formulating a policy on setting up such terminals. Private airport operators and investors have for at least half a decade contemplated setting up airports or terminals dedicated to low-fare airlines, but none has materialized.
With more full-fare airlines embracing low-cost services and many carriers wooing traffic from small cities and towns, the government is waking up to the concept of no-frills airports to keep fares low for passengers. Low-frills airports have minimal infrastructure in terms of runways, terminal facilities and navigational aids, all of which will translate into huge savings for airlines in airport charges. India's existing airports do not differentiate between full and low-cost airlines and airport charges get built into passenger fares.
An official in the aviation ministry said the government has started discussing low- frills airports as a concept.
Airport operators GVK group and GMR Group, German airport operator and GMR's partner in the Delhi airport Fraport AG, and low- cost aviation pioneer G.R.Gopinath have considered set- ting up low-frills airports, but have seen little progress because of various reasons.
Low-frills airports are prevalent in advanced markets such as the US, Europe and Singapore. In India, experts say demand for such terminals will rise as local airlines expand their low-fare operations.
Jet Airways (India) Ltd, the country's largest airline by passengers carried, said in August it will introduce more low-fare flights. The country's second largest low-fare carrier SpiceJet Ltd will begin flying to smaller cities this month.
A Jet executive said statistics show more passengers are flying low-fare the past six months and his airline is forced to shift more flights to this category. Three of every four tickets Jet sells are in the low-cost segment.
The first ministry official said the government is aware more carriers are moving towards the low-fare category and investors are willing to set up no-frills airports.
KPMG's Dubey said low-cost airports in tier II and III cities may not be viable in the near-term given the small traffic, and proposed creating a fund to subsidize the operations of low-frills airports.

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