Small airports can help turnaround aviation industry: KPMG

October 23rd, 2008 - 8:11 pm ICT by IANS  

KPMGNew Delhi, Oct 23 (IANS) Currently non-operational and low cost airports, if activated, can help turnaround the Indian aviation industry despite the global economic crisis, says a report released Thursday by global consultancy giant KPMG.Emphasising the need for more investment in such airports, the report said these airports have the potential to provide the next step for growth of the Indian aviation industry.

“The current downturn provides an opportunity to bridge the supply gap in the aviation infrastructure requirement and make India ready for the next wave of growth,” the report said.

“These airports would further the no-frills experience being offered by low cost carriers (LCCs) currently,” the report said.

LCCs, which opened the skies for the average traveller, have under-pinned the growth story of Indian aviation.

With less than 5 percent of the Indian population currently travelling by air, there is a large untapped market which could continue to fuel growth in the sector, the report said.

To capitalize on this opportunity, the key stake holders in the aviation industry need to focus on enabling regulations and infrastructure for LCCs.

At present, India has about 80 fully functional airports. In addition, there are another 368 landing strips that function as makeshift airports for limited purposes.

As many as 156 belong to the defence or semi-defence sectors and various state governments, while 63 are owned by the private sector.

Of these, just 24 airports account for a whopping 94 per cent of the current air traffic and the balance is spread over 36 smaller or regional airports.

Speaking on the report, Executive Director, KPMG, Rajeev B. Batra said besides offering the advantage of enhancing connectivity across the country, currently non-operational and low cost airports if made operational could help to rationalize the costs incurred by airlines and decongest the traffic at regular airports.

The KPMG report titled “Indian Airports - Global Landing Ground” tries to map the journey of airport development by analyzing the role of key stake holders, the challenges faced at a micro and macro level and the opportunities present in the current landscape.

The report further suggests that these airports could also provide much-needed relief to low cost carriers whose financial position has been negatively impacted by rising aviation fuel prices and operational costs.

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