New Opportunities Unfold for Participants in the Indian Airport Infrastructure Market, Finds Frost & Sullivan

MUMBAI, India - Large scale improvisation and expansion in the Indian airport infrastructure market coupled with active government support for private participants, particularly in Greenfield projects, has enabled the sector to take huge strides forward. Observations indicate that long term prospects for both private participants and the country look promising.

New analysis from Frost & Sullivan (www.aerospace.frost.com), Strategic Opportunities in the Indian Airport Infrastructure Market, finds that investment in airport infrastructure was over USD 5 billion in 2008. This is estimated this to reach USD 9 billion by 2013, of which close to USD 6.8 billion is expected to come through public private partnerships (PPPs). The addressed market includes both the Greenfield and Brownfield opportunities.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Ravinder Kaur/ Nimisha Iyer, Corporate Communications, at ravinder.kaur@frost.com/ niyer@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brochure will be sent to you by e-mail.

The drivers for the airport infrastructure development in India have been emerging business places, increased scope for connectivity, operating models of airlines, government initiatives, and the dynamic growth of tourism. The growth forecast for the period 2009-2013 for international aircraft movement is 13 percent and domestic is 14 percent. The domestic passenger growth is expected to be 20 percent while international is poised to be at 16 percent. The cargo growth is expected to be at 12 percent and 10 percent for domestic and international respectively.

International investors and airport companies have evinced interest in the past during the bidding for Greenfield airports and many such companies are consortium partners in current airport development projects. The government aims to bring in international players to incorporate operating efficiency and global standards.

The Government of India has encouraged private participants by providing assistance in terms of tax holidays and land for construction. Empowered committees and steering boards have been set up to expedite and monitor the progression of projects and policies connected with the development of airport infrastructure.

Another key driver for the airport infrastructure market is the up gradation of 35 non-metro airports identified by the Airport Authority of India (AAI). These airports are planned to be upgraded in 3 phases. All these Brownfield airports can have private participants pitching in for the land side development and some of the areas on the air side development.

“The primary challenges that face the market are financing and the identification of key geographical areas,” says Frost & Sullivan Research Analyst Chethan Kambi. “Funding for the airport development projects encompasses equity from loans, government grants, investors, AAI, and consortium partners, all of which will be invested in the project in a phased manner to accommodate planned expansions.”

Funding can be purely public or public private; however, Greenfield projects have remained public private alliances. No airport infrastructure has been developed using private funding. The primary infrastructure development model in India in the recent past has been PPPs.

“The gap between developmental needs and funding is wide, posing limitations on the ability of the government to satisfy growth and opportunities for private players,” says Ratan Shrivastava, Director Aerospace & Defence Practice at Frost & Sullivan. “Long-term sustainability of the airports in terms of funding is an issue for the government. Factors including the lack of indigenous technical and administrative expertise are perceived as prime reasons for poor planning and management, according to our recent research.”

Nonetheless, there are immense opportunities in the next five years for all the vendors and stake holders in the Indian airport infrastructure markets across all segments including airport security, airport communication, navigation and surveillance, access control and perimeter security, airport maintenance, asset management, GSE and GHE service providers and airport refeullers.

Strategic Opportunities in the Indian Airport Infrastructure Market is part of the Aerospace and Defense Growth Partnership Service program, which also includes research in the following markets: Indian Air Cargo Market, Indian Commercial MRO Market, and Indian Airport Infrastructure Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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Strategic Opportunities in the Indian Airport Infrastructure Market

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Contact: Ravinder Kaur Corporate Communications - South Asia P: +91-44-42044760 F: +91-44-24314264 E: ravinder.kaur@frost.com Tanu Chopra Corporate Communications - Middle East P: +91-22-4001-3437 F: +91-22-2832-4713 E: tanuc@frost.com Nimisha Iyer Corporate Communications - South Asia & Middle East P: +91-22-4001-3404 F: +91-22-2832-4713 E: niyer@frost.com www.frost.com

Source: Frost & Sullivan (India) Pvt. Ltd.

Contact: Ravinder Kaur, Corporate Communications - South Asia, P: +91-44-42044760, F: +91-44-24314264, E: ravinder.kaur at frost.com; Tanu Chopra, Corporate Communications - Middle East, P: +91-22-4001-3437, F: +91-22-2832-4713, E: tanuc at frost.com; Nimisha Iyer, Corporate Communications - South Asia & Middle East, P: +91-22-4001-3404, F: +91-22-2832-4713, E: niyer at frost.com