Project Feasibility Study_May2010

8/7/2019 Project Feasibility Study_May2010

1/101

Navi Mumbai International Airport

Presented by: May 2010

Washington, DC, USA

June 2008June2 008

Project Feasibility

Report

City and Industrial Development Corporation of Maharashtra Ltd.


2/101

Consultancy Servicesfor the


Project Feasibility Study

May 2010

Prepared by:

THELouis Berger Group, INC.


3/101

NMIA Project Feasibility Study Page iTable of Contents

Consultancy Servicesfor the


Project Feasibility Study

TABLE OF CONTENTS

CHAPTER 1 Introduction 1-1

1.1 Background .............................................................................................................. 11.2 Country Background & Aviation Profile .................................................................... 31.3 State Background ..................................................................................................... 51.4 Mumbai Metropolitan Region .................................................................................... 61.5 Navi Mumbai ............................................................................................................. 81.6 Navi Mumbai International Airport ............................................................................ 9

CHAPTER 2 Air Traffic Demand 2-1

2.1 Introduction ............................................................................................................... 12.2 MMR Historical Air Traffic Trend .............................................................................. 2

2.2.1 Annual Passengers ............................................................................................. 22.2.2 Air Cargo Trends ................................................................................................. 52.2.3 Aircraft Movements ............................................................................................. 7

2.3 MMR Demand Forecast ......................................................................................... 112.3.1 Passenger Forecast for MMR ........................................................................... 112.3.2 Cargo Forecast for MMR ................................................................................... 13

2.4 NMIA Passenger and Cargo Forecast .................................................................... 162.4.1 NMIA Passenger Forecast ................................................................................ 162.4.2 NMIA Cargo Forecast ........................................................................................ 212.4.3 NMIA Aircraft Movement Forecast .................................................................... 23

CHAPTER 3 Project Description 3-1

3.1 Overview ................................................................................................................... 13.2 Project Site ............................................................................................................... 23.3 Air Traffic Design Parameters .................................................................................. 43.4 Airport Facilities ........................................................................................................ 5

3.4.1 Runways .............................................................................................................. 73.4.2 Runway Exits ....................................................................................................... 73.4.3 Taxiways ............................................................................................................. 83.4.4 Bypass Holding Bays .......................................................................................... 93.4.5 Navigational Aids ............................................................................................... 103.4.6 Aircraft Parking Aprons ..................................................................................... 103.4.7 Passenger Terminal Building ............................................................................ 153.4.8 Air Cargo Building ............................................................................................. 213.4.9 Roadway System .............................................................................................. 213.4.10 Vehicular and Cargo Parking .......................................................................... 23


4/101

NMIA Project Feasibility Study Page iiTable of Contents

3.4.11 Aircraft Maintenance Hangar Facilities ............................................................ 233.4.12 Technical Building and Control Tower ............................................................. 243.4.13 Air Rescue and Fire Fighting ........................................................................... 243.4.14 Fuel Farm ........................................................................................................ 253.4.15 Ground Handling Equipment Maintenance ..................................................... 263.4.16 Catering Facility ............................................................................................... 263.4.17 Airport Maintenance Area ................................................................................ 273.4.18 Power Supply .................................................................................................. 28

3.5 Project Execution .................................................................................................... 283.6 Construction Material .............................................................................................. 283.7 Construction Environment ...................................................................................... 29

CHAPTER 4 Project Phasing and Cost 4-1

4.1 Overview ................................................................................................................... 14.2 Project Phasing ........................................................................................................ 14.3 Implementation Programme ..................................................................................... 24.4 Project Cost .............................................................................................................. 3

4.4.1 Phase 1 Cost Estimate ........................................................................................ 44.4.2 Phase 2 Cost Estimate ........................................................................................ 64.4.3 Phase 3 Cost Estimate ........................................................................................ 74.4.4 Phase 4 Cost Estimate ........................................................................................ 9

CHAPTER 5 Preliminary Financial Feasibility Analysis 5-1

5.1 Introduction ............................................................................................................... 15.2 Financial Analysis Methodology ............................................................................... 15.3 Primary Assumptions ................................................................................................ 35.4 Development Plans .................................................................................................. 55.5 Operating Revenues ................................................................................................. 5

5.5.1 Aeronautical Revenues ....................................................................................... 65.5.2 Non-Aeronautical Revenues ............................................................................... 7

5.6 Operating Expenses (OPEX) .................................................................................... 95.7 Results .................................................................................................................... 11


5/101

NMIA Project Feasibility Study Page iiiTable of Contents

TABLE INDEX

CHAPTER 2 Air Traffic Demand 2-1Table 2-1 Annual Commercial Passengers, CSIA (in 000 of Passengers) ...................... 4 Table 2-2 Breakdown of International Passengers, CSIA (in 000 of Passengers) .......... 5Table 2-3 Historical Air Cargo & Mail, CSIA ...................................................................... 6Table 2-4 Historical Commercial Aircraft Movements, CSIA ............................................. 7Table 2-5 Breakdown of Total Aircraft Movements for 2006-07, CSIA ............................. 8 Table 2-6 Summary of Medium Scenario Passenger Forecast MMR Airport System . 12 Table 2-7 Summary of Medium Scenario Air Cargo Forecast MMR Airport System ... 14 Table 2-8 Summary of Medium Scenario Mail Forecast MMR Airport System ............ 15Table 2-9 Allocation of Passenger Demand Medium Forecast .................................... 17Table 2-10 Summary of Passenger Demand Forecast NMIA ........................................ 18Table 2-11 Percent of Passengers in Peak Month ............................................................ 20Table 2-12 Average Day Peak Month Forecast Passengers ......................................... 20Table 2-13 Peak Hour Passenger Forecast ...................................................................... 21Table 2-14 Allocation of Air Cargo Among MMR Airports Medium Forecast (tonnes) ... 22 Table 2-15 Summary of Air Cargo Forecast NMIA (tonnes) ........................................... 22Table 2-16 Summary of Mail Forecast NMIA (tonnes) ................................................... 23Table 2-17 Forecast of Average Passengers per Aircraft ................................................. 25Table 2-18 Summary of Aircraft Movement Forecast NMIA ........................................... 25Table 2-19 Average Day Peak Month Forecast Commercial ATM ................................. 27Table 2-20 Peak Hour Commercial ATM Forecast ............................................................ 27Table 2-21 Peak Hour Total ATM Forecast ....................................................................... 27

CHAPTER 3 Project Description 3-1Table 3-1 NMIA Air Traffic Forecast Summary .................................................................... 4Table 3-2 Number Passengers per Development Phase .................................................. 15

CHAPTER 4 Project Phasing and Cost Estimates 4-1

Table 4-1 Phase-wise Airport Development ........................................................................ 2Table 4-2 Development Stages ........................................................................................... 3Table 4-3

Project Cost by Phases ....................................................................................... 4

Table 4-4 Cost Estimates Phase 1 Opening Phase ......................................................... 5


6/101

NMIA Project Feasibility Study Page ivTable of Contents

Table 4-5 Cost Estimates Phase 2 Short Term ............................................................... 7Table 4-6 Cost Estimates Phase 3 Medium Term ............................................................ 8Table 4-7 Cost Estimates Phase 4 Long Term ................................................................. 9

CHAPTER 5 Financial Feasibility Analysis 5-1

Table 5-1 Major Revenue Categories Projected ................................................................. 5Table 5-2 Passenger Service Charge ................................................................................. 6Table 5-3 Landing, Housing and Parking Charges .............................................................. 7Table 5-4 Assumptions for Estimating Non-Aeronautical Revenues ................................... 8Table 5-5 Estimate of Areas Developed and Utilized (m2) .................................................. 8Table 5-6 Assumptions for Estimating Operational Expenditures ....................................... 9Table 5-7 Projection of Number of Employees .................................................................. 10Table 5-8 Wage and Benefits per Category of Employee ................................................. 10Table 5-9 Summary of the Financial Feasibility Analysis .................................................. 11Table 5-10 Summary of the Sensitivity Analysis ............................................................... 12


7/101

NMIA Project Feasibility Study Page vTable of Contents

FIGURE INDEX

CHAPTER 1 Introduction 1-1

Figure 1-1 Mumbai Metropolitan Region (MMR) ................................................................ 2Figure 1-2 State of Maharashtra ......................................................................................... 5Figure 1-3 Mumbai Metropolitan Region ............................................................................ 6Figure 1-4 Location of Navi Mumbai ................................................................................... 8

CHAPTER 2 Air Traffic Demand 2-1

Figure 2-1 Annual Commercial Passengers, CSIA ........................................................... 4Figure 2-2 Comparison of Annual Passenger Growth Rates, CSIA & National ................ 5Figure 2-3 Breakdown of Total Air Cargo in 2007-08, CSIA ............................................. 6Figure 2-4 Breakdown of International Air Cargo by Commodity, CSIA ........................... 7 Figure 2-5 Annual Commercial Aircraft Movements, CSIA ............................................... 8Figure 2-6 Distribution of Total Arriving Aircraft by ICAO Code ...................................... 10Figure 2-7 Distribution of International and Domestic Arriving Aircraft by ICAO Code ... 10Figure 2-8 Comparison of Forecast Scenarios MMR Airport System .......................... 12Figure 2-9 Comparison of Cargo Forecast Scenarios MMR Airport System ............... 15Figure 2-10 Allocation of Passengers, MMR Airport System ............................................ 18Figure 2-11 Comparison of Forecast Scenarios NMIA .................................................. 19Figure 2-12 Average Number of Passenger per ATM, CSIA ............................................ 24Figure 2-13 Comparison of Commercial ATM Forecast Scenarios NMIA ..................... 26

CHAPTER 3 Project Description 3-1

Figure 3-1 Navi Mumbai International Airport Location ..................................................... 3Figure 3-1 NMIA Airport Layout Plan Long-Term Phase ............................................... 6Figure 3-2 NMIA Runway System .................................................................................... 7Figure 3-3 Bypass Holding Bays ...................................................................................... 9Figure 3-4 Commercial Parking Apron ........................................................................... 12Figure 3-5 Long-Term Aircraft Parking ........................................................................... 13Figure 3-6 General Aviation Apron ................................................................................. 13Figure 3-7 Cargo Apron .................................................................................................. 14Figure 3-8 Terminal Area Plan ........................................................................................ 15


8/101

NMIA Project Feasibility Study Page viTable of Contents

Figure 3-9 Level 5 Check-in ......................................................................................... 18Figure 3-10 Level 2 Centre of Concourse ...................................................................... 19Figure 3-11 Level 4 Access to Baggage Claim .............................................................. 20Figure 3-12 Level 3 Baggage Claim / Arrivals Lobby..................................................... 21Figure 3-13 Aircraft Maintenance Hangar Facilities .......................................................... 24Figure 3-14 Air Rescue and Firefighting Facility ............................................................... 25Figure 3-15 Fuel Farm ...................................................................................................... 25Figure 3-16 Ground Handling Equipment Maintenance Facility ....................................... 26Figure 3-17 Catering Facility ............................................................................................. 27Figure 3-18 Airport Maintenance Area .............................................................................. 27Figure 3-19 Power Station ................................................................................................ 28

CHAPTER 4 Project Phasing and Cost Estimates 4-1

Figure 4-1 Project Implementation Programme ................................................................ 3


9/101

Chapter 1.Introduction


10/101

NMIA Project Feasibility Study Page 1 - 1Consultancy Services for the Navi Mumbai International Airport

CHAPTER 1

Introduction

1.1 Background

Mumbai is primarily served by Chhatrapati Shivaji International Airport (CSIA). CSIA handles

nearly 23% air traffic and 31% cargo of the country. With the exception of last year, CSIA

has experienced unprecedented annual growth in the last few years reflective of the

countrys economic boom. However, this landlocked airport, with no room to spare, is

severely restrained on the air and landside. Additionally, the airport has undertaken a 2

billion dollar expansion initiative, starting December, 2006, to improve the existing conditionsand to increase overall capacity of the facility. It is anticipated that CSIA, in its expanded

form, will reach saturation point by 2012-2013.

There is an imperative requirement for a greenfield airport in Mumbai to sustain the

requirements of the booming Indian aviation sector. Navi Mumbai, one of the seven

municipalities in MMR, was selected as appropriate location to develop this proposed airport.

Navi Mumbai is being developed by City Industrial and Development Corporation (CIDCO)

was created to meet the growing needs of MMR. It is a planned township to accommodate

future business and residential facilities. The Figure 1.1 shows MMR and the location of

CSIA and the proposed Navi Mumbai International Airport (NMIA).

Considering the air travel need of the city population, City & Industrial Development

Corporation (CIDCO) as a part of the Navi Mumbai development plan had earlier proposed a

domestic airport. With the initial site feasibility report conducted by M/s. RITES, a location

near Panvel was selected. Further, a Techno-economic Feasibility Study (TEFS) was

conducted through M/s. Carter & Burgess Inc. (USA) for the development of a domestic

airport and submitted to the Government of India in 1997. Realising the problems at other

identical sites in M.M.R. and on behest of the Government of Maharashtra, the proposal of

building a domestic airport was upgraded to international airport and accordingly aTechnical Feasibility Report was submitted to the Government of India in 1998.

The Committee constituted in 1998 by the Ministry of Civil Aviation for the second airport of

Mumbai examined the Navi Mumbai site along with sites in Rewas-Mandwa and Mhapan in

Sindhudurg District and recommended the Rewas-Mandwa site as the most suitable site, in

2000. The Navi Mumbai site, while considered suitable for a domestic airport, was

determined unsuitable for an international airport as no parallel runway had been proposed.


11/101


Figure 1-1

Mumbai Metropolitan Region (MMR)

CIDCO then revised its original proposal incorporating the provision for a parallel runway

and made a presentationto officials of central and state government for the development ofNavi Mumbai International Airport (NMIA). The proposal of CIDCO was considered

technically & financially viable, environmentally less disturbing and supported by the local

people. Thereafter CIDCO, through the Government of Maharashtra (GOM), submitted the

proposal enclosing a pre-feasibility report detailing air travel demand, project facilities,

phasing, costing and financial viability with dual runway to the Ministry of Civil Aviation

(MOCA), Government of India (GOI).

The Ministry of Civil Aviation in turn through the Airport Authority of India (AAI), constituted a

technical team to examine the pre-feasibility report. The team concluded that the Navi

Mumbai site is operationally feasible for locating the second International Airport for Mumbai,

and suggested to carryout studies such as geological/geotechnical, hydrological, traffic and

environmental studies, etc.

A techno-economic feasibility study was conducted in 2001, by CIDCO to address the issues

raised by the above technical team which includes geological/geo-technical, hydrological,

aeronautical, traffic and environmental studies and submitted the report to AAI. All the

clarifications sought by AAI were reconciled and finally narrowed down to only two points i.e.

ExistingAirport

ProposedAirport


12/101


the provision of parallel independent runways and carrying out a simulation study to

establish the conflict free operation of the Mumbai and Navi Mumbai Airports. CIDCO carried

out the exercise and accommodated parallel independent runways with 1035 m spacing

between the centreline of two runways.

Technical Co-operation Bureau (TCB) of International Civil Aviation Organization (ICAO)

with their sub contractor NAV CANADA developed a simulation study in two parts: the first

being a fast time simulation using TAAM and the second part a realtime simulation under

the supervision of Airports Authority of India. The simulation study concluded that with

appropriate procedures in place, simultaneous and independent operation of both airports is

safe and feasible. Upon the completion of above requisite studies, the In-Principle approval

for the development of the Navi Mumbai International Airport on Public-Private- Partnership

basis is granted by the Ministry of Civil Aviation (MOCA), Govt. of India and Govt. of

Maharashtra.

1.2 Country Background & Aviation Profile

The proposed new airport at Navi Mumbai should cater for the future aviation needs of MMR

in particular and Maharashtra in general. India with some 1.1 billion people, diverse regions,

and a vibrant democracy has been making progress on a scale, size and pace that is

unprecedented in its own history. In the nearly 60 years since its independence, the country

has been successful on a number of fronts:

It has maintained electoral democracy

Banished the spectre of famines

Reduced absolute poverty by more than half

Dramatically improved literacy

Vastly improved health conditions

Become one of the worlds fastest growing economies with average growth rates

of 8% over the past three years

And, finally, India has reached a steady state in population growth

For the third successive year, the Indian economy has registered a highly impressive growth

during fiscal 2005-06. Sustained manufacturing activity and impressive performance of the

services sector with reasonable support from the recovery in agricultural activity have added

greater momentum to this growth process. After recording some slowdown in the third

quarter (October-December) of 2005-06, real gross domestic product (GDP) registered a

sharp increase in the fourth quarter (January-March) of 2005-06 benefiting from a pick-up in

almost all segments of agriculture, industry and services. According to the revised estimates

released by the Central Statistical Organization (CSO) in May 2006, real GDP accelerated

from 7.5 percent in 2004-05 to 8.4 percent during 2005-06. The Indian economy has, thus,


13/101


recorded an average growth of over 8 percent in the latest three years i.e. before the global

slow down. However, the same growth rate is recovered in the 2010-11. All this growth

requires an adequate infrastructure to sustain and mobilize the economy. One of the key

areas of infrastructure improvement is the aviation sector.

India is one of the fastest growing aviation markets in the world. The Airport Authority of

India manages a total of 128 airports in the country, which include 13 international airports, 7

custom airports, 80 domestic airports and 28 civil enclaves. There are over 450 airports and

1091 registered aircraft in the country. The genesis of civil aviation in India goes back to

December 1912 when the first domestic air route between Karachi and Delhi became

operational. In the early fifties, all airlines operating in the country were merged into either

Indian Airlines or Air India and by virtue of the Air Corporations Act 1953, this monopoly

continued for the next forty years.

In 1990s, the aviation industry in India saw some important changes. The Air Corporations

Act was abolished to end the monopoly of the public sector and private airlines were

reintroduced. With the liberalization of the Indian aviation sector, the industry has witnessed

a transformation with the entry of the privately owned full service airlines and low cost

carriers. Airlines like Jet Airways and Air Sahara, among others subsequently established

themselves as major players. In 2006, the private carriers accounted for around 75% share

of the domestic aviation market. The sector has also seen a significant increase in the

number of domestic air travel passengers. Some of the factors that have resulted in higher

demand for air transport in India include the growing middle class and their purchasing

power, low airfares offered by low cost carriers like Air Deccan, the growth of the tourism

industry in India, increasing outbound travel from India, etc.

International air links with India also witnessed major growth over the years. In addition to Air

India, Indian Airlines began serving many overseas destinations from major Indian cities.

India set up bilateral air services agreements with over 100 countries, while air links were

already in place with more than fifty countries. In 2003, the government allowed private

domestic airlines to operate services to SAARC nations through an open skies agreement.

An open skies agreement with ASEAN countries was also established, allowing for a more

liberal air services agreement.

The Indian aviation sector can be broadly divided into the following main categories:

1. Scheduled air transport service is an air transport service undertaken between two or

more places and operated according to a published timetable. It includes:

Domestic airlines, which provide scheduled flights within India and to select

international destinations. Air India, Air Deccan, Spice Jet, Kingfisher Airline and

IndiGo are some of the domestic players in the industry.

International airlines, which operate scheduled international air services to andfrom India.


14/101


2. Non-scheduled air transport service is an air transport service other than the

scheduled one and may be on charter basis and/or non-scheduled basis. The

operator is not permitted to publish time schedule and issue tickets to passengers.

3. Air cargo services are air transportation of cargo and mail. It may be on scheduled ornon-scheduled basis. These operations are to destinations within India. At present,

there are 2 scheduled private airlines (Jet Airways and Air Sahara), which provide

regular domestic air services along with Indian Airlines. In addition there are 47 non-

scheduled operators providing air-taxi/non-scheduled air transport services.

GOI has liberalized policies with regard to private participations in airports. Government

regulations have been modified to enable greenfield international airports to be established

and operated in Public - Private Partnership (PPP). The proposed NMIA will be another PPP

scheme under the GOIs umbrella of airport expansion plans. CSIA is an excellent example

of a successful PPP initiative.

1.3 State Background

Maharashtra is India's third largest state in area and

second largest in population. Located in western India,

Maharashtra is bordered by the states of Gujarat, Madhya

Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Goa

and the Union territory of Dadra and Nagar Haveli. TheArabian Sea makes up the state's western coast.

Mumbai, the capital city of Maharashtra, is India's largest

city and a prime centre of economy and culture.

1.3.1 Geography

Maharashtra encompasses an area of 308,000 km, and

is the third largest state in India. The Arabian Sea makes up Maharashtra's west coast. The

Western Ghats, better known as Sahyadri, are a hilly range running parallel to the coast, at

an average elevation of 1,200 metres. To the west of these hills lie the Konkann coastalplains, 5080 kilometres in width. To the east of the Ghats lies the flat Deccan Plateau. The

Western Ghats form one of the three watersheds of India, from which many South Indian

rivers originate, notable among them being Godavari River, and Krishna, which flow

eastward into the Bay of Bengal, forming one of the greatest river basins in India.

The Ghats are also the source of numerous small rivers which flow westwards, emptying into

the Arabian Sea. To the east are major rivers like Vainganga, which flow to the south and

eventually into the Bay of Bengal.

Figure 1-2

State of Maharashtra


15/101


There are many multi-state irrigation projects in development, including Godavari River

Basin Irrigation Projects. The plateau is composed of black basalt soil, rich in humus. This

soil is well suited for cultivating cotton, and hence is often called black cotton soil.

1.3.2 Economy

Maharashtra's is India's leading industrial state contributing 13% of national industrial output.

64.14% of the people are employed in agriculture and allied activities. Almost 46% of the

GSDP is contributed by industry. Major industries in Maharashtra include chemical and allied

products, electrical and non-electrical machinery, textiles, petroleum and allied products.

Other important industries include metal products, wine, jewellery, pharmaceuticals,

engineering goods, machine tools, steel and iron castings and plastic wares. Food crops

include mangoes, grapes, bananas, oranges, wheat, rice, jowar, bajra, and pulses. Cash

crops include groundnut, cotton, sugarcane, turmeric, and tobacco. The net irrigated areatotals 33,500 square kilometres.

1.4 Mumbai Metropolitan Region

The Mumbai Metropolitan Region (MMR)

spreads over an area of 4355 sq. km. and

comprises Greater Mumbai, Navi Mumbai,

Kalyan, Thane, Vasai-Virar. The Population

of MMR was 18.98 million in 2001. The

projected population of MMR in 2011 is

expected to 23.5 million and over 30 million

beyond 2022.

Mumbai, formerly Bombay, is the capital of

the State of Maharashtra. With an estimated

population of thirteen million, it is the second

most populous city in the world. Along with

the neighbouring suburbs of Navi Mumbaiand Thane, it forms, has a population of

nineteen million, the world's fifth most

populous metropolitan area. Mumbai lies on

the west coast of India and has a deep

natural harbour. Mumbai's port and JNPT

port handle over half of India's maritime

cargo.

Figure 1-3

Mumbai Metropolitan Region


16/101


1.4.1 Geography

Mumbai is located on seven, now-merged, islands which are Isle of Bombay, Mazagaon,

Mahim, Colaba, Old Woman's Island, Parel, and Salsette Island. Mumbai lies at the mouth of

Ulhas River off the western coast of India, in the coastal region known as the Konkan. Much

of Mumbai is just above sea level, and the average elevation ranges from 10 m (33 ft) to

15 m (49 ft). Northern Mumbai is hilly, and the highest point in the city is 450 metres (1,450

feet). Mumbai spans a total area of 603 km (233 sq mi).

1.4.2 Economy

Mumbai is India's largest city. Mumbai serves as an important economic hub of the country,

contributing 10% of all factory employment, 40% of all income tax collections, 60% of all

customs duty collections, 20% of all central excise tax collections, 40% of India's foreign

trade and 40 billion Rupees (US$ 1 billion) in corporate taxes.

Mumbai's per-capita income is Rs. 48,954 which is almost three times the national average.

Many foreign banks and financial institutions also have branches in this area, the World

Trade Centre (Mumbai) being the most prominent one. Up until the 1980s, Mumbai owed its

prosperity largely to textile mills and the seaport, but the local economy has since been

diversified to include engineering, diamond-polishing, healthcare and information technology.

Mumbai is home to the Bhabha Atomic Research Centre, and most of India's specialized,

technical industries, having a modern industrial infrastructure and vast, skilled humanresources. Rising venture capital firms, start-ups and established brands work in aerospace,

optical engineering, medical research, computers and electronic equipment of all varieties,

shipbuilding and salvaging, and renewable energy and power.

The media industry is another major employer in Mumbai. Most of India's major television

and satellite networks, as well as its major publishing houses, are headquartered in Mumbai.

Along with the rest of India, Mumbai, its commercial capital, has witnessed an economic

boom since the liberalisation of 1991, the finance boom in the mid-nineties and the IT,

export, services and BPO boom in this decade. The middle class in Mumbai is the segmentmost impacted by this boom and is the driver behind the consequent consumer boom.


17/101


1.5 Navi Mumbai

Navi Mumbai, formerly known as New

Bombay, is a twin city of Mumbai, India. It isbeing developed since 1970, and is one of the

largest planned cities in the world, with a total

area of 344 km and 163 km under the

jurisdiction of the Navi Mumbai Municipal

Corporation (NMMC). Navi Mumbai lies on the

mainland on the eastern seaboard of Thane

Creek. The city limits stretch from Airoli near

Thane in the north, to Uran in the south. The

length of the city is almost the same as that ofMumbai. The Vashi and the Airoli Bridges

connect Navi Mumbai to Mumbai. The harbour

line from Mumbai CST to Panvel provides the

commuter access to the city. Similarly, the city

is connected to Thane by a commuter rail

connecting Vashi, Nerul & Panvel area. The

city, planned for a population of 2 million and

employment of 0.8 million, is expected to

relieve the congestion and reduce the deterioration of civic amenities of Mumbai.

1.5.1 Geography

Navi Mumbai spreads over parts of two districts of Maharashtra; Thane, and Raigad. The

region is hilly in some parts, and certain areas of the region are protected wetlands. Unlike

its bigger neighbour, the city is sparsely populated.

Navi Mumbai is a part of South Konkan coast line. This coastal line joins Sahyadri mountain

ranges to the south and 50 to 100m high hills to the east. Thus the Navi Mumbai area lies

between mountain ranges and a coast line. Its coordinates are between Latitude 19.5 and

19.15, Longitude 72.55 and 73.5. Along the east, there are small hills running in a North-

South direction. This land forms part of the Konkan Region. The narrow belt of land starts at

Dighe in the North and ends at Kalundre in the South.

1.5.2 Administration

1.5.2.1 CIDCO

When Navi Mumbai was created in 1970s CIDCO was the only authority that looked after the

planning and development and maintenance of the city. CIDCO prepared developmental

plan for Navi Mumbai covering 95 villages from Thane and Raigad district. For the first ten

Figure 1-4

Location of Navi Mumbai


18/101


years of the project CIDCO acted as the planning and administrative body, as well as the

developer and builder for the project. Service Charge on property, land, commercial, water

were payable to CIDCO. The 14 nodes which CIDCO created where named Airoli, Ghansoli,

Kopar Khairane, Vashi, Sanpada, Nerul, CBD Belapur, Kharghar, Kalamboli, Kamothe, NewPanvel, Ulwe, Pushpak and Dronagiri. Each of the nodes is divided into groups. These

groups are blocks of one or more sector in each of the node.

Initially only Vashi, Nerul, CBD Belapur, Airoli, Kalamboli, and New Panvel were developed

by CIDCO and build infrastructure for housing, school, and community centre roads. But

after the arrival of Harbour Line in1991s there was increase in population thereby

necessitating the development of other Nodes, such as Kharghar, Ghansoli, Koparkhairane,

Kamothe, Dronagiri. CIDCO revised its development strategy in which the physical and

social infrastructure were provided by the corporation and the land were allotted to

developers for the construction of housing and these seven nodes were developed mostly bythe participation of private developers.

1.5.2.2 Navi Mumbai Municipal Corporation

In 17 December 1991 Navi Mumbai Municipal Corporation (NMMC) was constituted by the

State Government for maintaining some of the developed nodes of Navi Mumbai. The local

self-government started on 1 January 1992. NMMC was handed 7 of the 14 nodes of the

Navi Mumbai project area for its jurisdiction. However, CIDCO, as a Planning Authority has a

right on the open plots in these five nodes. The 7 nodes are Belapur, Nerul, Sanpada, Vashi,

Koperkhairane, Ghansoli, and Airoli are in the jurisdiction of Navi Mumbai MunicipalCorporation since 1998.

The municipal corporation is headed by Municipal commissioner and an elected Mayor.

There are 64 electoral wards in Navi Mumbai. A corporator is elected in each of the wards.

All the nodes under Municipal Corporation come under Thane District.

The newly developed nodes of Navi Mumbai on the south side like Kharghar, Kalamboli,

Kamothe, New Panvel, and Ulwe in Raigad District are still maintained by CIDCO and don't

come under NMMC jurisdiction.

Navi Mumbai Municipal Transport Undertaking or NMMT Undertaking is the local transport

service operated by the Navi Mumbai Municipal Corporation in the city of Navi Mumbai and

adjoining areas of Dombivli, Badlapur, Uran, Panvel, Thane, Kalyan and Mumbai.

1.6 Navi Mumbai International Airport

The location of the proposed airport at Navi Mumbai has been considered on several

parameters. Prominent among these is the fact that Navi Mumbai is expected to absorb the

future growth in population, business and commercial activity of the region. The availability

of physical and social infrastructure coupled with environment less disturbing, minimum


19/101


rehabilitation & re-settlement and 80% of the land in the possession of the Corporation

makes the Navi Mumbai International Airport project technically suitable and financially

attractive through public-private participation.

The proposed airport at Navi Mumbai is located near Panvel Town on NH4B at a distance of

35 km from the existing Sahar International Airport in Mumbai. A total area of about 2054 Ha

is earmarked for the development of Navi Mumbai International Airport consisting of airport

zone and the area required for offsite infrastructure such as; diversion and training of rivers,

construction of approach roads, railways, interchanges and laying of utility lines. The airport

zone is about 1615 Ha consisting of an on-airport area of about 1200 Ha for aeronautical

activities and an off-airport area of about 415 Ha for non-aeronautical activities related to the

airport, accommodating the physical, social, institutional, residential and commercial

supporting infrastructure. The balance area of about 439 Ha is required for diversion and

training of rivers, construction of approach roads & railway, interchanges and utility services.

The airport site is presently accessible by an existing four lane road called National

Highway-4B from the east side, State Highway-54 which runs on the southern boundary of

airport as well as a four lane concrete road called Aamra Marg from the west side. The

airport will be made accessible by constructing interchanges on the NH4B as well as on

Aamra Marg for smooth and speedy entry and exit from the airport. The existing Mankurd-

Belapur-Panvel Commuter Railway line passes on the northeast of the airport area and the

nearest station is Khandeshwar located at a distance of less than 1 km. The airport zone is

also proposed to be connected to Belapur, Khandeshwar, Mansarowar located on the above

commuter railway line. The other commuter line called Nerul-Uran railway line is under

construction and the nearest station to approach the airport is Targhar located at a distance

of 1.5 km from the airport boundary. Panvel Rly. Station on Central/Kokan Rly. is located at

a distance of 1.5 km from the airport site which will provide the rail accessibility at the

regional, state and national level.

In accordance with the In principle approval obtained from the Union Govt., the project is

proposed to be executed on the basis of public-private-partnership (PPP). Accordingly, a

Special Purpose Company (SPC) will be incorporated as private company, under the

Companies Act, 1956 in which 26% equity will be held by CIDCO/AAI and the rest with thestrategic partner to be selected through the public bidding process. The SPC will raise the

required resources, design, build, market, manage and operate, and maintain the airport

during the concession period. The project will be transferred back to the Govt. at the

expiration of the concession period.

The Navi Mumbai International Airport will support the rapidly growing air travel needs of the

Mumbai Metropolitan Region. It is expected to handle 4.8 million passengers in its first

operational year and will be more than double to 10.6 million the following year. It will be

able to handle 33 million by 2020 and 61 million by 2030.


20/101

Chapter 2.Air Traffic Demand


21/101

NMIA Project Feasibi lity Study Page 2 - 1Consultancy Services for the Navi Mumbai International Airport

CHAPTER 2

Air Traffic Demand

2.1 Introduction

This chapter of report presents the air traffic forecast of the number of passengers, aircraft

operations, and cargo, based on a market analysis of the growth potential for NMIA.

The specific objective of the demand analysis is to prepare detailed traffic forecasts over a

25-year period. These forecasts have been prepared under three scenarios (Pessimistic,

Probable and Optimistic) and include the following: Annual commercial passengers (breakdown among international, domestic and

transit).

Enplaned and deplaned domestic and international cargo (air freight and air mail)

tonnage, breakdown between freighter cargo and belly cargo.

Annual aircraft movements (ATM) showing a breakdown among commercial

passenger, freighter, and others (general aviation and military).

Annual commercial aircraft movements (ATM) (breakdown between scheduled,

non-scheduled, as well as a breakdown for low cost carriers).

Annual commercial aircraft movements (ATM) breakdown by type of aircraft

(according to the ICAO classification).

Average day in the peak month and peak hour for passengers and aircraft

movements.

Modal split of arriving and departing passengers (private car, taxi, bus, train, etc.)

Each of the above items is forecasted on an annual basis up through 2031. More general

indicative forecasts are also presented up to 2041.

Forecasts are carried out in fiscal years, which run from April to March. For purposes of this

analysis, it is now assumed that NMIA will begin operations towards the end of 2013 or early

2014. This implies the following planning phases:

Phase 1 (short-term) Opening to 2017-18

Phase 2 (medium-term) 2018-19 to 2022-23

Phase 3 (long-term) 2023-24 to 2031-32

Ultimate Capacity: 2041-42


22/101


2.2 MMR Historical Air Traffic Trend

This section of the report presents a summary analysis of the historical traffic data for CSIA

for the period between 1980-81 and 2007-08, including annual passengers, cargo and

aircraft movements, with breakdowns per type of aviation. The focus is on presenting data

that is used directly in the forecast model. A full presentation of the analysis of historical air

traffic trends can be found in the Mumbai Region Air Transport Profile (Task A3) Report.

2.2.1 Annual Passengers

India has been experiencing a major expansion of the air transportation industry. The total

number of commercial passengers using Indian airports almost doubled over the four years

between 2004-05 and 2007-08 from 59 to more than 116 million.1 This growth has averaged

24.4% per year and has been particularly high for domestic traffic.

The driving forces behind this rapid growth in air traffic are:

1. Deregulation of the aviation sector: A policy of liberalization of international bilateral

agreements has opened the sector to more domestic and international airlines and it

has coincided with a lowering of the cost base for the sector by reducing a number of

taxes and charges. This combination has resulted in a more competitive environment

and lower fares for aviation services and a more dynamic sector of the economy.

2. Positive macro economic trends: Recent years have seen a relatively high growth in

GDP driven by domestic demand and exports including those of high tech industries.Together, they have resulted in an increased use of air travel by the business sector

and an expanding middle class with discretionary disposable income willing to travel

to domestic and international destinations by air. Business persons and individuals

are increasingly making use of domestic and international shipping air cargo

services.

3. Tourism: Foreign tourists have discovered India. The last few years have seen a

rapid growth of foreign visitors with double digit annual growth rates in visitors (18%

per annum between 2003 and 2006). As indicated above, the increasing growth of

the middle class will be a major factor in the domestic tourism industry, which alsofeeds the growth of aviation services.

4. The Emergence of Low Cost and Premium Service Carriers: Several Low Cost

Carriers (LCCs) have started services in the region in recent years and many new

ones have announced or are considering initiating services. The experience in other

continents during the past two decades demonstrates that the potential for LCC

traffic growth is huge, with a combination of low fares and higher disposable income.

These carriers are particularly important in the case of major markets such as

Mumbais, where the emergence of LCCs services can generate latent demand way

1All traffic statistics in this report are presented in fiscal years, which run from April to March.


23/101


above any prior experience anywhere in the world. In addition to LCCs in India, other

airlines have been very successful in establishing themselves as a high service

premium brand, emphasizing another market segment, and thereby also helping

increase demand by offering reliability, frequency and quality.

Commercial air service to the Mumbai Metropolitan Region is currently concentrated in the

Chhatrapati Shivaji International Airport (CSIA). This airport handles the highest passenger

traffic volumes in the country, surpassing 25 million annual passengers during this past fiscal

year (2007-08) and accounting for close to 22% of the total number of passengers handled

by Indian airports.

Table 2-1 and Figure 2-1 show the historical trends for the CSIA in terms of the number of

international and domestic commercial passengers between 1980-81 and 2007-08. This

data permits the following conclusions:

CSIA experienced relatively modest slow growth in the number of passengers

over the two decades preceding the liberalization of the Indian air transportation

industry during 2003-04, doubling from 6.4 to 13.3 million passengers (at an

annual average compound growth rate of 3.5%).

Though the overall trend during those two decades was generally positive, there

was significant year to year variation, with temporary declines in traffic during the

economic recession of the early 1990s and in the period immediately following

the terrorist attacks of September 11, 2001.

From 2004-05 to 2007-08, the impact of the liberalization of the market was quite

spectacular with annual growth rates averaging over 18%, as traffic has almost

doubled once again in the space of only four years.

This growth trend has been interrupted during the current year (2008-09); initially

by spiking fuel prices last summer, followed by the impact of the worldwide

financial crises.

During both previous periods, the number of domestic passengers had grown at

over twice the rate of international passengers, but it is also the traffic segment

most affected by the current crisis.

Though it is not indicated in these tables, this boom period seems to have recently come to

an end as the industry was hit hard by high fuel costs this past summer and the current

worldwide financial crisis. Traffic figures for the first six months of the 2008-09 fiscal year

indicate that while international passengers have continue to increase by 6.2% compared to

those same six months during 2007, domestic passengers actually declined by -8.0%.


24/101


0

5

10

15

20

25

30

1980-81

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

AnnualPax(millions)

Internat.

DomesticTotal

Table 2-1

Annual Commercial Passengers, CSIA (in 000 of Passengers)

Year International Domestic Total Growth

1980-1981 2,638 2,416 5,054

1990-1991 4,338 3,764 8,102

2000-2001 5,175 7,003 12,177 5.3%

2001-2002 4,765 6,527 11,291 -7.3%

2002-2003 5,088 7,172 12,260 8.6%

2003-2004 5,336 7,948 13,284 8.4%

2004-2005 6,088 9,577 15,665 17.9%

2005-2006 6,728 11,682 18,410 17.5%

2006-2007 7,347 14,902 22,249 20.9%

2007-2008 7,984 17,881 25,865 16.3%

2008-2009 * 8,227 15,384 23,611 -8.7%

GAGR1980-2003 3.1% 5.3% 4.3%

2003-2007 10.6% 22.5% 18.1%

*2008-09 estimated based on data for first 10 months

Figure 2-1

Annual Commercial Passengers, CSIA

A further important trend becomes apparent when direct international transit passengers are

broken out. As can be seen in Table 2-2, during the current boom in the air transportation

market, while international passengers with their origin or destination in Mumbai have

increased by over 12% per annum, international transit passengers has actually declined

significantly. This decline has taken place primarily over the past two years. It should be

noted that these transit figures do not include transfer passengers connecting to an

international carrier from a domestic carrier and vice-versa.


25/101


Table 2-2

Breakdown of International Passengers, CSIA

(in 000 of Passengers)

Year O/D Mumbai International TotalEmbarked Disemb. Transit Pax

2003-2004 2,532 2,285 519 5,336

2004-2005 2,864 2,636 588 6,088

2005-2006 3,191 2,916 621 6,728

2006-2007 3,562 3,224 560 7,347

2007-2008 4,055 3,591 338 7,984

GAGR

2003-2008 12.5% 12.0% -10.2% 10.6%

The overall trends for CSIA have followed a similar pattern as those at the national level;

though with somewhat lower growth rates in recent years (see Figure 2-2). Much of thisdifference in growth rates has been taken place over the past four or five years, during which

already consolidated airports like CSIA, Delhi and Chennai have naturally grown at a

somewhat lower rate than many of the traditionally secondary airports that began the current

decade with very low traffic levels.

Figure 2-2

Comparison of Annual Passenger Growth Rates, CSIA & National

2.2.2 Air Cargo Trends

Table 2-3 presents historical data on the air cargo and mail handled at CSIA over the past

27 years. As was the case with passengers and aircraft movements, air cargo (not including

-20%

-10%

0%

10%

20%

30%

40%

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

AnnualGro

wthRates-TotalPassengers CSIA

India


26/101


Imports

32%

Exports

38%

Domestic

30%

mail) has also experienced very rapid growth rates over the past few years, increasing from

307,600 tonnes in 2002-03 to an estimate of over 533,000 tonnes in 2007-08.

Mail, on the other hand, has actually decreased somewhat after reaching a high of 18,146

tonnes in 2002-03.

Table 2-3

Historical Air Cargo & Mail, CSIA

In 2007-08, 70% of the cargo handled by the airport was international, with the remaining

30% domestic (see Figure 2-3). Though exports make up most of the international cargo,

imports have been growing at a much higher rate as a result of the growth of the domestic

market. The primary imports are consumer items, as well as electronic, computer and

machine parts, all of which are increasingly in demand. Figure 2-4 presents the breakdown

of international air cargo by commodity at CSIA.

Partial data for 2008-09 would indicate that total air freight has increased by only 1.4% over

the first 10 months of the year, a significant decline compared to the growth rates of previous

years that reflects the ongoing economic crisis. A full breakdown of 2008-09 cargo is not

currently available.

Figure 2-3

Breakdown of Total Air Cargo in 2007-08, CSIA

Year Domestic Mail Total Growth

Loaded Unloaded Total Total

1980-1981 33,252 16,503 49,755 18,227 13,342 81,324

1990-1991 96,108 44,837 140,945 39,108 10,843 190,896

2000-2001 137,767 73,246 211,013 76,797 17,562 305,372 4.4%

2001-2002 132,407 67,559 199,966 75,975 17,579 293,520 -3.9%

2002-2003 146,598 77,470 224,068 83,537 18,146 325,751 11.0%

2003-2004 149,625 84,355 233,980 92,497 16,445 342,922 5.3%

2004-2005 169,006 104,259 273,265 129,450 12,602 415,317 21.1%

2005-2006 171,442 117,518 288,960 142,360 12,630 443,950 6.9%

2006-2007 186,969 141,053 328,022 152,158 13,250 493,430 11.1%

2007-2008 205,296 168,474 373,770 159,821 14,975 548,566 11.2%

GAGR

1980-2003 6.8% 7.4% 7.0% 7.3% 0.9% 6.5%

2003-2008 8.2% 18.9% 12.4% 14.7% -2.3% 12.5%

International Cargo


27/101


Exports

Pharmaceuti

cals

19%Textiles

18%

Automobile

9%

Chemicals

3%

Hazardous

2%

Leather

Goods

1%

Other

48%

Imports

Hazardous

3%

Perishable

3%

Electronics/

Computer

10%

Electricals

2%

Auto/

Machine

Parts

16% Luggage

2%

Other

64%

Figure 2-4

Breakdown of International Air Cargo by Commodity, CSIA

2.2.3 Aircraft Movements

Table 2-4 and Figure 2-5 present the trend for annual commercial aircraft movements at CSIA

over the past 25 years. Total annual commercial passenger ATMs has experienced an

important increase over the past four years in particular, from 137,212 in 2003-04 to an

estimate of over 230,000 for 2007-08 (see Table 2-4).

Table 2-4

Historical Commercial Aircraft Movements, CSIA

Year International Domestic Total Growth

1980-1981 23,256 22,778 46,034

1990-1991 28,831 27,411 56,242

2000-2001 34,597 73,812 108,409 1.1%

2001-2002 35,891 79,389 115,280 6.3%

2002-2003 35,100 90,451 125,551 8.9%

2003-2004 37,560 99,652 137,212 9.3%

2004-2005 43,743 109,423 153,166 11.6%

2005-2006 49,186 121,959 171,145 11.7%

2006-2007 52,729 149,071 201,800 17.9%

2007-2008 61,658 170,861 232,519 15.2%

GAGR

1980-2003 2.1% 6.6% 4.9%

2003-2007 13.2% 14.4% 14.1%

* 2008-09 estimated based on data for first 10 months


28/101


0

50,000

100,000

150,000

200,000

250,000

1980-81

1982-83

1984-85

1986-87

1988-89

1990-91

1992-93

1994-95

1996-97

1998-99

2000-01

2002-03

2004-05

2006-07

2008-09

A

ircraftMovements

Internat.

Domestic

Total

Figure 2-5

Annual Commercial Aircraft Movements, CSIA

While the general trend for aircraft movements in the CSIA is similar to that of the

passengers, average growth rates have been somewhat lower. This is particularly trueduring the current boom, primarily because of a significant increase in the average number

of passengers per domestic ATM from 79 in 2003-04 to over 105 in 2007-08 as domestic

airlines have been moving towards using larger aircraft.

Table 2-5 presents a breakdown of total aircraft movements for 2006-07, including cargo and

non-commercial aircraft. Scheduled passenger aircraft movements accounted for 90.1% of

total ATMs during that year, with freighters accounting for another 3.5%.

Table 2-5

Breakdown of Total Aircraft Movements for 2006-07, CSIA

ATM %

International Scheduled 45,590 21.4%

International Non Scheduled 2,206 1.0%

International Cargo 4,933 2.3%

Domestic Scheduled 146,596 68.7%

Domestic Non-Scheduled 0 0.0%

Domestic Cargo 2,475 1.2%

Military 1,256 0.6%

Business Aviation 10,221 4.8%

Total 213,277


29/101


Military and business aviation operations have not experienced the same rapid growth

experienced by commercial passenger and cargo ATM, remaining relatively stable in recent

years, though with considerable year to year variation. But it should be noted that the

Business Aviation Association for India (BAAI) estimates that the market will grow in theshort term by 30% to 40% at the national level due to further Governmental de-regulation

and increased foreign investment in Indian companies.

It would also be important to add that most General Aviation activity is concentrated at the

Juhu Aerodrome, which in recent years has handled from 20,000 to 25,000 aircraft

movements per year, representing approximately 10% of the ATMs for the Mumbai system.

An estimate was made for the current fleet mix for regular passenger operations based on

the January 2008 flight schedule for CSIA. This is compared to the fleet mix at the airport for

August 2004 so as to identify any recent trends (See Figure 2-6 and Figure 2-7).

This fleet mix was organized according to the aircraft categories established by the ICAO

and distributed between the international and domestic terminals.2

The key findings of this fleet mix analysis are:

The market is currently dominated by ICAO Code C narrow body aircraft with less

than 200 seats, representing 78.1% of total scheduled commercial passenger

arrivals. A large majority of these were either Boeing 737 series or Airbus 320

aircraft, which together account for 62.3% of scheduled ATMs at the airport.

Another 5.4% were Code C ATR turboprop aircraft.

Code C aircraft have actually increased their overall share of the market in recent

years, up from 69.3% in August 2004. This a function of both the relatively faster

growth of domestic traffic compared to international arrivals and an increase in

the use of narrow body Code C aircraft on international flights from 16.9% to

23.3%.

Wide-body aircraft accounted for 21.3% of total scheduled commercial passenger

arrivals and 76.7% of international arrivals in January 2008.

There has been an increase in the relative size of the Code C aircraft towards

Boeing 737-800s and 900s, as well as the Airbus 321. This along with the

change in seat configurations used the new low cost carriers is what accounts for

an overall increase in the average number of passengers per aircraft movement

from 107 to 115 during the same period.

Also, Air Sahara (now Jet Lite) has replaced its regional jets with Boeing 737-800

aircraft on most routes into Mumbai, reducing the domestic share of Code B

aircraft down to less than 1% of total arrivals compared to 4.5% in 2004.

2Flights arriving to CSIAs international terminals from other airports in India are included as international in this figure and

table, as they either originated in another country or will continue on overseas after departing Mumbai.


30/101


Total - 2004

Code C

(jet)

63%

Code D

15%Code E

13%

Code B

3%

Code C

(turbo)

6%

Total - 2008

Code C

(jet)

73%

Code D

7%

Code E

14%

Code B

1%

Code C

(turbo)

5%

Domestic Terminals - 2008

Code C

(jet)

91%

Code D

1%

Code B

1%

Code C

(turbo)

7%

International Terminals - 2008

Code C

(jet)

23%Code D

23%

Code E

54%

Domestic Terminals - 2004

Code C

(jet)

85%

Code D

1%

Code B

5%

Code C

(turbo)

9%

International Terminals - 2004

Code C

(jet)

17%

Code D

44%

Code E

39%

Figure 2-6

Distribution of Total Arriving Aircraft by ICAO Code

Figure 2-7

Distribution of International and Domestic Arriving Aircraft by ICAO Code


31/101


2.3 MMR Demand Forecast

2.3.1 Passenger Forecast for MMR

This section provides LBGs aggregate unconstrained passenger forecasts for the entire

Mumbai Airport System. These forecasts were developed using a two step process:

1. Develop econometric forecasting models according to industry practices.

2. Adjust forecasts for short-term and long-term industry trends not reflected in the

econometric modelling.

While finding a regression with very high correlation coefficients demonstrates a close

statistical relationship between the variables during the historical period of analysis, there

are some important limitations that should be taken into account.

The resulting equation directly reflects conditions that define that relationship during those

particular years. When using this equation to project passengers towards the future, it is

only valid to the extent that these same conditions are expected to persist. Furthermore, it

does not take into account short-term shocks to the system, such as those experienced so

far this year with wildly.

The specific factors that were considered in this particular case are:

1. The extent and duration of the impact of the current downturn in air traffic caused by

fluctuating fuel costs and what has become a worldwide financial crisis.

2. The extent to which an eventual recovery of the world economy will lead to a return

to the projected medium to long-term trend line (as established by the econometric

model).

3. Whether it is feasible to assume that domestic traffic will indefinitely continue growing

faster than international traffic.

4. Whether the long-term growth rates resulting from the econometric analysis are

sustainable in the very long-run once the market begins to mature.

Table 2-6 presents a summary of the aggregate adjusted passenger forecast for the MMR

airport system under the Medium Scenario for each of the planning years identified in the

introduction to this report.

The long-term forecast is that demand will reach over 77 million passengers in 2021-22 and

over 119 million in 2041-42.


32/101


0

20

40

60

80

100

120

140

160

2007-0

8

2008-0

9

2009-1

0

2010-1

1

2011-1

2

2012-1

3

2013-1

4

2014-1

5

2015-1

6

2016-1

7

2017-1

8

2018-1

9

2019-2

0

2020-2

1

2021-2

2

2022-2

3

2023-2

4

2024-2

5

2025-2

6

2026-2

7

2027-2

8

2028-2

9

2029-3

0

2030-3

1

2031-3

2

Passengers(millions)

Medium

High

Low

Table 2-6

Summary of Medium Scenario Passenger Forecast MMR Airport System

Year Terminal Passengers (000) Total Passengers (000)

Intern. Domestic Total Transit Total2007-08 7,645 17,881 25,526 338 25,865

2014-15 12,150 32,849 44,999 586 45,585

2017-18 15,078 40,768 55,846 773 56,619

2022-23 20,489 55,396 75,885 1,153 77,038

2027-28 26,179 70,780 96,959 1,604 98,563

2031-32 31,594 85,421 117,015 2,062 119,077

Average Annual Growth Rate:

2007-2017 7.0% 8.6% 8.1% 8.6% 8.1%

2018-2031 5.4% 4.0% 4.0% 5.4% 4.0%

2007-2031 5.3% 5.9% 5.7% 6.7% 5.7%

Figure 2-8 presents a comparison of the forecast under the three scenarios prepared:

Medium, High and Low.

Figure 2-8

Comparison of Forecast Scenarios MMR Airport System

The High and Low scenarios were forecasted using the same equation as the base forecast,

but applying the respective GDP/NDP forecasts. As noted previously, they also involve

different assumptions about the rate of recovery from the current downturn in traffic. The

result of these assumptions is that total passengers in 2031-32 will increase from 119 million

to 144 million under the High scenario and would be down to 100 million under the Low

scenario.


33/101


2.3.2 Cargo Forecast for MMR

This section presents the aggregate unconstrained forecast of air cargo and mail for the

Mumbai airport system.

The methodology utilized to prepare the air cargo forecast is similar to that used for

passengers. A statistical regression analysis was carried out for each primary traffic segment

to identify correlations between historical cargo trends and combinations of the socio-

economic variables and periods of at least 15 years between 1980-81 and 2007-08.

In the case of air cargo, the only adjustments made to the growth rates resulting from the

econometric analysis were for 2008-09 and 2009-10.

In the case of air cargo, growth rates for the first 10 months of 2008-09 were 4.0% for

international and -4.7% for domestic and these rates are used for the entire year. While the

international rate is lower than the results of the regression equation, domestic cargo has

clearly been even more strongly affected by the general downturn in traffic experienced this

year.

As both international and domestic cargo can be expected to continue to be affected by the

crises in the coming year, the growth rates projected for 2009-10 have been cut in half.

As was the case with passengers, adjustments have also been made concerning the

recovery of some of this lost cargo, as follows:

For the Medium Scenario, International cargo is expected to recover 90% of the

lost cargo in comparison to the regression results for 2014-15.

Domestic cargo is expected to recover to 75% of the lost tonnage during this

same period.

The High and Low Scenarios, the percent recovered is increased or reduced by

10% respectively.

Table 2-7 presents a summary of the aggregate adjusted Medium air cargo forecast for the

MMR airport system for each of the planning years identified in the introduction to thischapter of the report.

The average annual growth rates over the next 10 years are projected at 8.0% and 7.7% for

international and domestic air cargo respectively. Though relatively high, these rates

represent a decline in comparison to the growth rates experienced since the liberalization of

the air transportation markets (12% and 15% respectively).


34/101


Fiscal Year Domestic TotalBeg in: Loaded Unloaded Total

2007 205,296 168,474 373,770 159,821 533,591

2014 296,225 340,371 636,595 276,483 913,078

2017 342,802 466,378 809,180 335,543 1,144,723

2022 439,550 741,095 1,180,644 458,218 1,638,863

2027 566,631 1,148,315 1,714,946 619,357 2,334,303

2031 696,434 1,641,629 2,338,063 783,946 3,122,009

CAGR

2007-2017 5.3% 10.7% 8.0% 7.7% 7.9%

2017-2031 5.2% 9.4% 7.9% 6.2% 7.4%

2007-2031 5.2% 10.0% 7.9% 6.9% 7.6%

International

Table 2-7

Summary of Medium Scenario Air Cargo Forecast MMR Airport System

(tonnes)

The primary results are:

Air cargo is forecasted to double from 533,591 tonnes in 2007-08 to more than

1.1 million tons in 2017-18. It will then increase more gradually at an average

annual growth rate of 7.4% to more than 3.1 million tonnes of total freight by

2031-32.

International cargo is projected to reach over 2.3 million tonnes by 2031-32, of

which 70% are imports, compared to 45% at present. This last is consistent with

a growing Indian middle class demanding more imports of the type shipped byair.

Domestic cargo is forecasted to reach over 0.78 million tons by 2031-32.

In the case of mail, statistical analysis techniques were not suitable. The historical trend

over the past 25 years is one of very little growth and significant year to year variations. It

was possible to estimate the following very low income elasticities (using State GDP) for the

past 14 years:

International Mail: 0.186

Domestic Mail: 0.214

Table 2-8 presents the Medium MMR forecast of airmail based on these elasticities; as well

as the sum of both air cargo and mail. Based on the historical tendency, airmail has a much

lower growth rate than air cargo and becomes an increasingly less important part of the

airfreight business. Mail is projected to increase from just under 15,000 tons to 20,000 tons

over the next 24 years.


35/101


Fiscal YearBeg in: Internat. Domestic Total Internat. Domestic Total

2007 3,257 11,718 14,975 377,027 171,539 548,566

2013 3,522 12,847 16,369 640,117 289,330 929,447

2016 3,656 13,310 16,966 812,836 348,853 1,161,689

2021 3,858 14,120 17,977 1,184,502 472,338 1,656,840

2026 4,071 14,978 19,050 1,719,018 634,335 2,353,352

2031 4,296 15,889 20,186 2,342,360 799,836 3,142,195

CAGR

2007-2017 1.2% 1.3% 1.3% 8.0% 7.4% 7.8%

2017-2031 1.2% 1.3% 1.2% 7.9% 6.1% 7.4%

2007-2031 1.2% 1.3% 1.3% 7.9% 6.6% 7.5%

Air Mail + Air CargoAir Mail

0

500

1000

1500

2000

2500

3000

3500

4000

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-25

2025

-26

2026

-27

2027

-28

2028

-29

2029

-30

2030

-31

2031

-32

Tonnes(thousands)

Medium

High

Low

Table 2-8

Summary of Medium Scenario Mail Forecast MMR Airport System

(tonnes)

Figure 2-9 presents a comparison of the forecast under the three scenarios: Medium, High

and Low.

Figure 2-9

Comparison of Cargo Forecast Scenarios MMR Airport System

The base forecasts for the High and Low scenarios were estimated using the same

equations, but applying High and Low forecasts of the primary independent variables. The

same adjustment was carried out for 2008-09. In the case of 2009-10, the following

adjustments were made:

High: The growth rate predicted by the regression equation was multiplied by 0.8.

Low: The regression growth rate was multiplied by 0.2.


36/101


2.4 NMIA Passenger and Cargo Forecast

This section of the report presents the passenger and cargo demand forecast for NMIA,

based on an allocation of the passengers projected for the complete MMR airport system.

Though there are several different mechanisms for the allocation of air traffic in multi-airport

environments, as was analysed in the Strategic Planning Report (Task A-8), a decision has

been made to allow free competition among the two airports for the different traffic

segments. As a result, the allocation of traffic will depend primarily on two inter-related

factors:

The preferences of airport users (passengers, airlines, etc.)

Capacity, congestion and quality of service constraints

The procedure followed to allocate potential passenger traffic is the following:

1. Review airline preferences and plans

2. Estimate the proportion of the passenger and cargo markets for which NMIA has a

comparative advantage

3. Analyse saturation levels at CSIA

4. Derive passenger levels at NMIA

5. Derive cargo levels at NMIA

2.4.1 NMIA Passenger Forecast

2.4.1.1 Annual Passengers

The passenger demand forecast for NMIA was prepared by allocating forecasted demand

for the entire MMR system between CSIA and NMIA. The primary assumptions used are:

1. NMIA will begin operating at the end of 2013 or in early 2014.

2. CSIA will retain a slight advantage over NMIA through the planning horizon from the

point of view of most users (passengers and airlines) as long as it remains

uncongested and can offer available slots during peak domestic hours.

3. NMIA should be able to handle up to 220,000 annual commercial ATM and

approximately 40-42 peak hour ATM per runway, before becoming congested (which

using the passenger per ATM forecast represents approximately 60 million annual

passengers).3

Table 2-9 presents the allocation process. Demand for Navi Mumbai is derived by

subtracting the capacity of NMIA from the systems demand.

3 A current benchmark for major European and North American airports is between 200,000 and 250,000 annual movementsper runway. Source: 2007 Airport Benchmarking Report, Air Transportation Research Society. NMIA should eventually beable to reach a similar level of operational efficiency.


37/101


Year Unsatisf.

Pax ('000) Growth Pax ('000) Growth Pax ('000) Growth Demand

2007-08 25,865 16.3% 25,865 16.3% 0

2008-09 23,611 -8.7% 27,574 6.6% 0

2009-10 23,611 0.0% 29,283 6.2% 0

2010-11 25,735 9.0% 30,992 5.8% 0

2011-12 29,690 15.4% 32,702 5.5% 0

2012-13 34,253 15.4% 34,411 5.2% 0

2013-14 39,516 15.4% 34,683 0.8% 4,833 0

2014-15 45,585 15.4% 34,957 0.8% 10,629 119.9% 0

2015-16 49,160 7.8% 35,233 0.8% 13,928 31.0% 0

2016-17 52,802 7.4% 35,511 0.8% 17,291 24.1% 0

2017-18 56,619 7.2% 35,792 0.8% 20,827 20.5% 0

2018-19 60,705 7.2% 36,074 0.8% 24,630 18.3% 0

2019-20 65,075 7.2% 36,359 0.8% 28,715 16.6% 0

2020-21 69,744 7.2% 36,647 0.8% 33,098 15.3% 02021-22 73,221 5.0% 36,936 0.8% 36,284 9.6% 0

2022-23 77,038 5.2% 37,228 0.8% 39,810 9.7% 0

2023-24 81,010 5.2% 37,522 0.8% 43,488 9.2% 0

2024-25 85,144 5.1% 37,818 0.8% 47,325 8.8% 0

2025-26 89,443 5.0% 38,117 0.8% 51,326 8.5% 0

2026-27 93,914 5.0% 38,418 0.8% 55,495 8.1% 0

2027-28 98,563 5.0% 38,722 0.8% 59,841 7.8% 0

2028-29 103,398 4.9% 39,028 0.8% 60,300 0.8% 4,070

2029-30 108,423 4.9% 39,336 0.8% 60,776 0.8% 8,311

2030-31 113,647 4.8% 39,647 0.8% 61,257 0.8% 12,744

2031-32 119,077 4.8% 39,960 0.8% 61,740 0.8% 17,377

System Demand Capacity CSIA NMIA Demand

Since CSIA will be operating at the competitive capacity throughout the forecast period,

almost the entire growth in demand for the system will have to be absorbed by NMIA, except

for what is explained by the increase in average passengers per operation.

Domestic and international passengers were then allocated proportionally between the two

airports, as we considered that at this time there is no solid basis for assuming a specific

concentration of either domestic or international passengers at either CSIA or NMIA.

Table 2-9

Allocation of Passenger Demand Medium Forecast

(thousands of passengers)

This table does not include direct international transit passengers. The forecast model

permits allocating these separately in case information was obtained which would indicate a

particular concentration of these passengers at either CSIA or NMIA. As of now, since we

do not have such information, these passengers are allocated in the same proportion as the

remaining passengers.

Figure 2-10 graphically illustrates the allocation process, with the top line representing the

aggregate demand for the MMR system, including unallocated passengers beginning in

2028-29 when both airports reach their maximum design traffic levels.


38/101


CSIA

NMIA

0

20

40

60

80

100

120

140

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2029-30

2030-31

2031-32

Passengers(millions)

Figure 2-10

Allocation of Passengers, MMR Airport System

Table 2-10 presents a summary of the annual passenger demand forecast for NMIA.

Table 2-10

Summary of Passenger Demand Forecast NMIA

(thousands of passengers)

Fiscal Year Terminal Passengers Total Passengers

Begin in: Intern. Domestic Total Transit Total

2014 2,833 7,659 10,492 137 10,629

2017 5,547 14,996 20,543 284 20,827

2022 10,588 28,626 39,214 596 39,810

2027 15,894 42,973 58,867 974 59,841

2031 16,381 44,290 60,671 1,069 61,740

2041 16,381 44,290 60,671 1,069 61,740

Average Annual Growth Rate:2014-2017 25.1% 25.1% 25.1% 27.6% 25.1%

2018-2031 8.0% 8.0% 8.0% 9.9% 8.1%

2014-2031 10.9% 10.9% 10.9% 12.9% 10.9%

The primary results are:

NMIA is forecasted to handle over 20 million passengers by the end of Phase 1 in

2017-18. This would increase to just under 40 million passengers by 2022-23

and almost 62 million by 2031-32.

International passengers are forecasted to reach over 10 million passengers by

the end of Phase 2 and over 16 million by 2031-32.


39/101


0

10

20

30

40

50

60

70

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2029-30

2030-31

2031-32

Pa

ssengers(millions)

Medium

High

Low

Domestic passengers are forecasted to reach over 28 million by 2022-23 and

over 44 million over the long run.

Direct international transit passengers are forecasted to increase to over 1 million

over the first 24 years of operation of the airport.

Figure 2-11 presents a comparison of the forecast under the three scenarios: Medium, High

and Low. The High and Low scenarios were forecasted using the same assumptions about

the maximum capacity of both airports. As a result, all three scenarios eventually top out at

just over 60 million passengers. The primary difference between them is that the High

Scenario reaches that level 2020-21, while the Low Scenario gets there 10 years later.

Figure 2-11

Comparison of Forecast Scenarios NMIA

2.4.1.2 Peak Period Passengers

In addition to the annual passenger forecasts presented above, estimates were also made of

the Average Day Peak Month (ADPM) and Peak Hour for various segments of the

passenger market.

The methodology used to estimate the ADPM was to apply the percentage of annual traffic

in the peak month of 2007-08 to the annual traffic forecast for NMIA. As can be seen in

Table 2-11, there has been no consistent trend in the percentage of annual traffic in the peak

month in recent years.


40/101


Table 2-11

Percent of Passengers in Peak Month

Year International Domestic Total

2005

Project Feasibility Study_May2010

Documents

Transcript of Project Feasibility Study_May2010