Over-Loaded Hubs

With the high rate of growth of the Indian airline industry, traffic at the major Hub Airports is only set to increase thereby further aggravating problems of traffic congestion

Issue: 9 / 2017By Air Marshal B.K. Pandey (Retd)Illustration(s): By Anoop Kamath

As per the International Air Transport Association (IATA), after a period of slowdown that proved to be temporary, the Indian airline industry is once again on a growth trajectory that is healthy as well as impressive. In the month of May this year, the domestic segment of the Indian airline industry registered a growth rate of 17.7 per cent. This is particularly noteworthy when compared with the growth rate of the airline industry of China, the primary competitor that recorded 16.8 per cent. IATA has rated the Indian airline industry as “the fastest growing domestic aviation market globally for 22 months in a row”.

Also competing with India in this regime are Russia and Japan, nations whose airline industries registered double digit growth albeit marginally lower than that of India. According the GMR Group that runs the Indira Gandhi International Airport (IGIA) at New Delhi, in 2015, the number of passengers that travelled by air in one year, equalled the number of passengers that travelled in the air-conditioned coaches of the Indian Railways.

An Incongruous Situation. The Indian airline industry is dominated by the private carriers and much of the credit for the healthy growth must rightfully be attributed to them. However, the high growth rate also has generated some problems in its wake. As profitability in operations is an overriding consideration for private carriers for reasons that are quite understandable, they prefer to and have been operating predominantly on high density routes that help the carriers record high load factors and consequently generate decent levels of profits. This pattern of operations by private carriers in India has resulted in imbalance in the distribution of traffic pattern when viewed nationwide. As per data from the Airports Authority of India (AAI), the six airports located in Mumbai, Delhi, Bengaluru, Chennai, Kolkata and Hyderabad, handle around 67 per cent of the nation’s air traffic. Of the remaining 119 airports under the management control of AAI, 64 airports currently handle a mere 34 per cent of the commercial air traffic. What can be more incongruous!

Overloaded Hub Airports. The incongruity apart, the bigger problem is that the six airports listed above, handle bulk of the national commercial air traffic and the infrastructure at these airports is bursting at the seams. Part of the problem can be attributed to the “Hub and Spoke” arrangement wherein the six major airports have evolved as the “Hub Airports” and are fed by a number of smaller airports. A passenger desirous of travelling between two small non-Hub Airports, must necessarily transit through a major Hub Airport to fly to his final destination as in all likelihood, there will be no direct flight connecting the two small airports. As an example, in the case of a passenger desirous of flying from Ahmedabad to Kochi, he or she will have to transit through one of the major Hub Airports such as Delhi, Mumbai, Bengaluru, Hyderabad or Chennai, depending on the airline, as there is no direct flight between the airport of departure and destination desired by this particular air passenger. Thus he or she may be required to change aircraft while transiting through a major Hub Airport. On some routes, a passenger wanting to fly from a major Hub Airport to a smaller airport, is likely to be routed through another major Hub Airport. For example, an air passenger desirous of flying from Bengaluru to Lucknow, he or she will have a mandatory stop over at either Delhi or Mumbai.

This system of transiting through major Hub Airports has been necessitated by the lack of direct connectivity between the smaller airports. This only serves to increase flying time for the air passenger and results in higher financial burden by way of increased price of ticket. This also increases the number of aircraft a major Hub Airport is required to handle with the resultant problem of traffic congestion, shortage of parking space, delay in arrivals or departures. All this invariably adds to the chaos at major Hub Airports.

With the high rate of growth of the Indian airline industry, the traffic at the major Hub Airports is only set to increase thereby further aggravating problems of traffic congestion as also other associated problems. One easy solution to the looming crisis at major Hub Airports is to expand the capacity of the major Hub Airports and this is being done relentlessly. In recent times, the six major Hub Airports listed above, have witnessed the development of new and modern airport infrastructure. While this has facilitated the rapid growth of the airline industry, in turn, it is now leading to saturation at most of the major Hub Airports. For example, operating through Mumbai airport has become a very difficult exercise for airlines due to massive congestion. The government has thus come out with a plan to build the second international airport at Navi Mumbai. Although the project received clearance by the government in 2007, work on the project has just commenced and it will take several years before the airport is available to decongest the existing Mumbai airport. Till then the travelling public will continue to suffer.

The master plan for the expansion of IGIA at New Delhi is ready and includes construction of the fourth runway, a new terminal as also expansion of the existing ones. Plans are also afoot for building the second international airport in the National Capital Region for which two options are on the table. These are at Bhiwadi in Rajasthan or Jewar in Uttar Pradesh. The restriction of building an airport within 150 km of an existing one has apparently been done away with. The Kempegowda International Airport (KIA) at Bengaluru commissioned in 2008, will reach saturation very soon and hence work on the second runway and a new terminal has already commenced albeit after some delay. However, there are no plans as yet for building a second airport at Bengaluru, Chennai, Kolkata and Hyderabad. But the way the traffic is growing, it is only a matter of time that this too will happen.

Moving Away from “Hub and Spoke” Concept. Expansion of airport infrastructure is not only resource-intensive, this concept in the Indian context also suffers from some inherent limitations. As the newly built international Airports at the six major cities cited above are located in inhabited and well developed habitat, finding space for further expansion of airport infrastructure may become an insurmountable problem. The alternative solution to the problem of congestion at the major Hub Airports is to move away from the “Hub and Spoke” concept and increase the level of direct air connectivity between the smaller, non-Hub Airports. This will obviate the need to transit through major Hub Airports thus contributing to reduction of congestion.

In June 2016, the government unveiled the new National Civil Aviation policy that has a major thrust towards the development of regional aviation which entails the commissioning of 160 small airports in phases across the country to bring the facility of air travel to the masses. The central theme of the policy is the Regional Connectivity Scheme (RCS). As the volume of traffic at the regional airports is likely to be low and hence financially not viable or attractive to the private carriers, the government has introduced a system of compensation for losses incurred by airlines, through a scheme dubbed as Viability Gap Funding (VGF). The burden of VGF will be borne by the central government as also the government of the state in which the regional airports lie.

While the new thrust on regional aviation is certainly required as it is expected to usher in the next phase of growth in the Indian airline industry, there is a need to address the problem of congestion at the major Hub Airports through modification of the RCS. The government must encourage the operators to connect the smaller cities through direct flights and not compel air travellers to transit through the major Hub Airports. The government may have to provide adequate incentives to encourage both the legacy and regional carriers to enhance direct connectivity between the smaller Tier-II and -III city pairs. This will help reduce congestion substantially at the major Hub Airports.

From the Secretary, Ministry of Civil Aviation

Jayant Baranwal, Editor-in-Chief, SP’s Aviation in a brief conversation with Rajiv Nayan Choubey, Secretary, Ministry of Civil Aviation at Assocham’s ‘10th International Conference Cum Awards On Civil Aviation, Cargo & Tourism’.

R.N. Choubey
R.N. Choubey
Secretary, Ministry of Civil Aviation

Jayant Baranwal: I wish to ask you in regard to the Aviation Hubs. For instance, If one has to fly from Pune to Dehradun, the passenger has to land in Delhi and then take another flight from Delhi (hub) to Dehradun; and so on and so forth for other destinations too... what is the solution for this? It leads to the shortage of parking and chaos at the hubs. Can you offer some solutions, so that the passenger can surpass the hub?

Rajiv Nayan Choubey: We are not looking at a government sponsored solution for this issue, as we had looked at the un-served and under-served destinations. Having said that, let me share that I have a good news on this: In past 70 years, we have had 395 aircraft till 2015 and about 75 serving airports in the country. In the last 3 years, the country has placed unprecedented orders, the order book is over 800 aircraft and the government is working towards the airports too. These things (surpassing the hubs) will happen, and we have had the highest growth in the aviation sector.

“THESE MEDIUM CAPACITY ARE WHAT WE CALL THE ‘THIN LONG ROUTES’, FOR EXAMPLE AN A 320 FROM BANGALORE TO DEHRADUN MAY NOT FLY IN ITS FULL CAPACITY. SMALLER JETS CAN BE USED FOR THESE ‘THIN LONG ROUTES’.”

Jayant Baranwal: We have the large airliners and then, the turboprops. Can we look at the in-between capacity aircraft to solve this issue of the Hubs?

Rajiv Nayan Choubey: These medium capacity are what we call the ‘thin long routes’, for example an A320 flight from Bangalore to Dehradun may not fly in its full capacity. Smaller jets can be used for these ‘thin long routes’, that could be expensive and the airlines haven’t utilized the ‘thin long routes’. It is difficult for airlines to have multi configuration aircrafts, as it is a cumbersome process to handle the requirements of pilots, cabin crew, maintenance and trainings. They will have to go for a different configuration to accommodate this. The airlines are owned by very sound business people, if the airlines think that they can make money from the ‘thin long routes’, they will go for it.