Come September, the two-airport model will take off in India

Announcements have started on the operationalisation of the MOPA airport in Goa. The chief minister announced commercial operations to begin on September 1. A few days ago, as part of Q4 and FY22 results, GMR announced that it intends to start operations at MOPA by mid-August. While there is no news about which airlines would fly to MOPA and from where this will be the first time that the two-airport model will be tested in India.

In all fairness, Goa is a state, unlike Mumbai or Delhi, where second airports are coming up, and many states have multiple airports. Besides, Goa has a population of two million which pales in comparison to Mumbai and Delhi NCR which are home to 20 million and 40 million people by some estimates. But Goa is a small state with both the airports catering to the same catchment area and set of travellers ― primarily tourists. No wonder then that Goa makes it to the top 10 domestic airports in the country.

When the greenfield airports at Bengaluru and Hyderabad were operationalised, it led to the closing of their existing airports at HAL and Begumpet respectively. At Goa, while MOPA takes wings, Dabolim will remain active, and thus will be born a two-airport system with two different operators, providing a glimpse of what to expect in the years to come.

MOPA - a recap

Goa is currently served by a civil enclave at Naval Station, Dabolim ― a frontline base for the Indian Navy. It has a shore-based testing facility and a spate of other aircraft from the arsenal used for advanced training and maritime reconnaissance requirements.

The airport is closed for civil movements from 0830 hrs to 1230 hrs and 1530 hrs to 1630 hrs from Monday to Friday, along with 0730 hrs to 1130 hrs on Saturday. Lack of a parallel taxiway, limited apron space, and a terminal which is short on space even when it was recently built are just some of the challenges of operating at Dabolim.

The need for a civil airport has been old. MOPA wasn’t an easy bet, from court cases to the COVID-19 pandemic, the speed was much slower than what GMR or the state government would have liked it to be.

Located close to the northern tip of the state, it also is a challenge to traverse the state to reach south Goa where the premium luxury resorts are located, until the expressway is ready.

The two-airport model

As MOPA becomes operational, Dabolim will continue to allow civilian flights. Better facilities at the terminal, a full-length parallel taxiway and a lot more are under planning, indicating the seriousness of the state-run Airports Authority of India (AAI) to continue investing in its civil enclave at Dabolim.

GMR, the developer of MOPA, is already in talks with airlines to launch flights to MOPA. It is unlikely that any airline will simply move all its flights to MOPA. Instead, the airport could get an anchor airline and start with attracting flights during hours when Dabolim airport is closed. The morning hours are lucrative since they give maximum return on bookings ― with passengers being able to reach at check-in time of hotels.

Also, the first ones to shift would be charters ― if and when they return, a bigger question mark due to the ongoing situation between Ukraine and Russia.

As airlines offer flights to both Dabolim and MOPA, what would also be known is the pricing power, and if airlines can increase prices for flights to Dabolim because it is closer to the hotels, what are the preferences of passengers and to what lengths could a private operator go to attract traffic to a new airport.

Setting benchmarks

The view that airlines take and the response they get from passengers along with how the regulatory ecosystem like Airports Economic Regulatory Authority (AERA) treats this case will pave the way for NOIDA and Navi Mumbai airports to become operational.

While Navi Mumbai will compete with Mumbai and both will be operated by the same operator (Adani Enterprises), this is not the case at Delhi, where GMR operates the Delhi Airport, while a consortium led by Zurich Airports, is developing Noida International Airport at Jewar.

Delhi-Goa is a route under Category 1 of Route Dispersal Guidelines (RDG). Airlines that fly this route have to fly 10 percent of their capacity by ASK (Available Seat Kilometres) on Category 2 routes and 1 percent of its capacity by ASK on Category 2A routes.

While Noida airport already has a ruling in its favour of it being included in all Air Service Agreements which have Delhi in it, the category dispensation for Goa means that airlines cannot flood the market just because there is a sudden spurt in available capacity.