Despite the urgency, given the tardy pace of infrastructure development over the last six years there seems to be little cause for cheer for the aviation sector

The initial mismatch and the ever-widening chasm between requirement of infrastructure and its availability not only affected the airline industry, it also had a debilitating impact on business aviation, effectively stunting its growth. By either default or design, this segment of civil aviation, already groaning under the crushing burden of high import tariffs, complex procedures and regulatory provisions was relegated to the lowest priority. Perhaps of greater concern, however, was that the paucity of infrastructure could seriously undermine the optimism in even the high flying Indian airline industry.

Seized of the problem, the Ministry of Civil Aviation (MoCA) announced a grandiose scheme to more than treble the number of civil airports in the country in a decade, taking the number to 400. The stated aim of the government was to have an airport available “within 50 km radius from any point in the country”. The plan included the development of a number of Greenfield airports, modernisation of the international airports in the four metros—Delhi, Mumbai, Kolkata and Chennai—and upgrade of existing airfields in Tier II and III cities across the country, especially in the Northeast. The plan also spoke of privately operated merchant airports, separate terminals for low cost carriers and business jets, heliports to unshackle operations by civil helicopters and massive upgrade of the antiquated Air Traffic Management system. Ambitious and requiring staggering investment, the plan envisioned speedy execution and called for participation by entrepreneurs in projects under Public Private Partnership (PPP) arrangement.

However, the sudden and steep rise in the price of Aviation Turbine Fuel in 2008, followed by global economic turmoil, delivered a devastating blow to the airline industry. Month after month airlines registered negative growth in air traffic and plummeting load factors resulting in financial distress that threatened their survival. Mergers and acquisitions followed with the total number of carriers in the country dwindling from 11 to seven. In the emerging situation, interest of the private entrepreneurs in airport development projects appeared to wane. To some extent, policies of the government in respect of PPP projects not particularly friendly to private investors also served as disincentive. The focus of the government shifted from development of aviation infrastructure to survival of the industry.