July 3 (Bloomberg) -- Indian Prime Minister Manmohan Singh today opened a terminal that will double capacity at New Delhi airport and ease travel into the world’s second-most populous country.
“A good airport would signal the arrival of a new India,” Singh said in New Delhi. “The commissioning of this terminal will be a significant step forward in developing Delhi as a vital hub.”
Delhi’s Terminal 3 and another planned in Mumbai are part of a government infrastructure push designed to lure overseas investment and support travel demand stoked by the nation’s surging economic growth. The number of domestic passengers is estimated to grow more than fourfold to as many as 180 million, and international traffic may exceed 50 million annually by 2020, Singh said.
“It is essential for India that T3 is seen as a success,” said Andreas Schimm, director of economics and program development at Airports Council International, a Geneva-based trade group. “If significant investments are not paying off, capacity will not keep pace with demand as investors will shy away from the airport industry.”
The terminal, spread over 5.4 million square feet, has 78 gates, 97 automated walkways, 95 immigration counters, 20,000 square meters (215,000 square feet) of retail space and parking for 4,300 cars. The facility, which will begin handling international flights on July 14, will boost the airport’s capacity to 60 million passengers a year.
India’s aviation industry has the growth potential to absorb as much as $120 billion of investment by 2020, Singh said today.
$2.7 Billion Terminal
Along with other renovations, construction of Terminal 3 cost about $2.7 billion, according to Kiran Kumar Grandhi, chairman, airports at GMR Group. The facility will be run by a group backed by Bangalore-based GMR, state-run Airports Authority of India Ltd., Frankfurt-based Fraport AG and Malaysia Airports Holdings Bhd.
The new facility may boost travel by drawing more carriers, improving connectivity between flights and easing queues. About 25 million passengers passed through Delhi airport in the year ended March. Dubai handled 40.9 million travelers in 2009 and Singapore’s Changi airport moved 37.2 million, according to Airports Council International data.
“For the first time an Indian airport will rank alongside Changi, Hong Kong and Dubai,” said Binit Somaia, director for South Asia at the Sydney-based Centre for Asia Pacific Aviation. “That is a big step forward.”
The new facility was completed in 37 months compared with the 45 months China took to build the terminal that opened in Beijing ahead of the 2008 Olympics.
Carriers including Jet Airways (India) Ltd., the nation’s largest, Kingfisher Airlines Ltd. and Air India will move domestic services to Terminal 3 around the end of the month. Low-cost carriers such as SpiceJet Ltd. will use a different facility.
Domestic carriers need to take advantage of the new terminal to develop New Delhi as a hub for both domestic and international travel, Civil Aviation Minister Praful Patel told reporters yesterday.
“Lufthansa, Singapore Airlines and British Airways, which are all reputed in the world, have only become big because they have encashed on the hub,” said Patel in New Delhi. “India did not have that.”
The ministry of civil aviation will pursue other government departments and state administrations to lower taxes on aviation turbine fuel and ease transit visa rules to facilitate development of Delhi as a hub, Patel said.
Emirates Airline has applied to fly the Airbus SAS A380 superjumbo to Delhi with the opening of the new terminal, India’s Director General of Civil Aviation Nasim Zaidi said last month. AirAsia X, part-owned by Malaysia-based AirAsia Bhd., will add services to the city from Aug. 4. The group may also add flights from Bangkok, AirAsia Chief Executive Officer Tony Fernandes said last month.
“Improved infrastructure such as new terminals help boost air traffic and enhance the travel experience,” he said in an e-mailed response to questions. “This will mean a quicker turnaround time for our aircraft operations, helping keep costs low and enabling us to offer our lower fares.”
Indian air travel has risen alongside an economy growing at an average rate of 8.5 percent annually during the past five years and the rise of discount carriers. The number of airports with scheduled services has climbed to 82 from 50 over the past 10 years, according to the civil aviation ministry.
India has 10 airlines operating in the country, compared with two in 1990 and the number of aircraft deployed by the carriers has increased fourfold to 400 in the period, Singh said.
The new terminal in Mumbai, India’s financial capital, is due to open in 2012. The government has also approved plans for the construction of seven new airports.
A proposed new airport near Mumbai should be supported as capacity at the existing one in the city is nearing saturation, Civil Aviation Minister Patel told business leaders, bureaucrats and other people at the opening of the new terminal today.
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