Joined: 22 Dec 2006
|Posted: Wed Jan 16, 2013 1:21 pm Post subject: CCU Swanky terminal -- a potential failure
|A very well written article. Rather than igniting more wet dreams about airlines that need to operate A380s to India, this is one article which is written.
Calcutta will shift to a swank airport terminal in a week but no new airline except a budget carrier is as yet looking to unlock the “business potential” of Bengal that Mamata Banerjee likes making a song and dance about.
“An airport is a part of the state and not the other way round. Its viability depends on the growth of industry and tourism. No major international airline is looking at Calcutta as an opportunity because of few business travellers and low cargo movement,” a senior official of the Airports Authority of India said.
Flydubai is the lone airline showing interest in starting a Calcutta flight and none among those who already operate to and from the city has yet offered to scale up services.
“We are looking at starting operations next summer. Four flights a week are on the radar,” an official of Flydubai told Metro on Tuesday.
Aviation officials say it could turn out to be difficult for the AAI to sustain a facility such as the integrated terminal if it were almost entirely dependent on holiday and education-tourism passengers.
“We don’t have concrete proposals from any airline yet,” said airport director B.P. Sharma, who had visited a global aviation fair in Germany last year to market the integrated terminal.
Business travel is the lifeblood of aviation and Calcutta provides little of that to an industry that has become more circumspect since Kingfisher went kaput.
Industry sources said business-class travel accounted for less than 30 per cent of passenger traffic to and from the city. In Mumbai, it is 55 to 60 per cent and 60 to 65 per cent in Bangalore.
“Business travel is the primary source of revenue for airlines. They ensure year-long traffic volumes for an airline whereas leisure and education travel are seasonal,” said a senior official of a private airline operating from the city.
Airlines also crave corporate fliers because they are not price-sensitive, unlike other categories of travellers..
“The viability of an international full-service airline on a particular route depends on the sale of business-class seats. British Airways, Lufthansa and several other international airlines have withdrawn from Calcutta because of low business-class occupancy,” an industry official said.
Calcutta has long been labelled a budget-flier market, which is why mainly low-cost carriers or subsidiaries of major international airlines seem interested in the city.
“Almost 40 per cent of the seats of international flights to and from Calcutta are sold outside Bengal,” the official said.
Dragonair, a subsidiary of Cathay Pacific, and SilkAir, the regional wing of Singapore Airlines, started services to Hong Kong and Singapore last year.
British Airways said it had no plans to resume its Calcutta service. Lufthansa hasn’t shown any interest either. Even national carrier Air India, struggling to keep its nose in the air, doesn’t intend increasing the number of flights soon after shifting to the new terminal.
The last time airlines were buoyant about business in Bengal was when Tata was revving up to roll out the Nano from Singur. That was also the time several companies had taken plots along the Bypass to build hotels.
Cut to 2013, airlines are extremely cautious about Calcutta and most of the hotel projects aren’t happening.
The upgraded airports in the other metros not only handle more flights than Calcutta, they had airlines queuing up to start or scale up services long before the modernisation projects were completed.
Bangalore airport’s new terminal was thrown open in May 2008 and it handles about 300 passenger flights daily — 240 domestic and 60 international. “In the first year, six to eight new airlines started operations and several of those already operating added flights,” a spokesperson for Bangalore International Airport Ltd said.
Delhi handles 750 to 900 flights a day. “Several routes and airlines were added to our services once T3 was commissioned in 2010,” an official said.
Mumbai is set to open its new international facility, T2, in the last quarter of the year. The domestic section will become operational in 2014. Last year, Virgin Atlantic and Maldivian started operating in Mumbai.
Calcutta is a laggard even in cargo handling, reflecting the state’s economic health. The city airport currently handles about 250 tonnes of domestic and international cargo a day, a 10 per cent decrease from last year.
Delhi handles between 650 and 700 tonnes and Mumbai 700 to 750 tonnes. Bangalore records about 600 tonnes of cargo daily.
Singapore Airlines withdrew the only freighter it was operating from the city last year because of the dwindling cargo volume. Emirates had started a cargo freighter as part of a trial run last August but soon pulled it out.
An official in the airport’s cargo division said there had been “at least a 10 per cent decline” in import of international cargo in the telecommunication and IT hardware sectors.
Around 60 per cent of cargo for export is leather, followed by machinery and automobile components. Most of the machinery and automobile components come from Jamshedpur.
“We had expected a 25 per cent growth in automobile component exports when Tata Motors was setting up its factory in Singur. After it pulled out, growth stagnated,” the official said.[/code]