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The sky is the limit

Kanika Goswami | Aug. 2, 2008
Nobody likes change but when youre Albert Brunner, change and expansion seem to come with the territory.
BANGALORE, 1 AUGUST 2008 - Nobody likes change. Especially when the medias looking over your shoulder and your project needs to meet deadline.

But when youre Albert Brunner change and expansion seem to come with the territory. Take for example, the role he played in the planning and realization of Zurich Airports expansion program, a US$2 billion (about Rs 8,000 crore) project. And more recently with the Bengaluru International Airport. He was forced to expand the airport significantly when it was already a third complete with the opening date telescoping into view.

The airport veteran of 17 years took these bumps in his stride and even got the additional Rs 1,000 crore required for the expansion. But the larger challenge of setting up a greenfield airport his first and ensuring that it was scalable would test him.

Expansion and change have underlined the importance of scalability for BIAL. And they take scalability seriously. Take for example, how the airport has created shared check-in counters allowing them to be used by multiple airlines and scale to meet peak-hour traffic.

Scalability is a lesson that will go a long way as BIAL starts planning its second phase and it's a lesson new airports would do well to heed.

CIO: What challenges did you face building a greenfield airport?
Albert Brunner: Building a private greenfield airport in India is much more than a construction project. It requires setting up a new legal framework, coping with the huge pressures that arise out of deadline, and recruiting and training personnel from a talent pool that has limited experience in airport management. It also means selecting partners like caterers, ground handlers, retailers, etcetera, who can provide service in par with the highest international standards. It isn't possible to realize such a project on time without the full dedication and support of thousands of people and the authorities.

Can you be more specific?
We had to redesign the airport while it was under construction. When the project was designed, we anticipated approximately five million passengers in our first year. However, by the time we started construction we had already hit this figure. The big challenge was to increase the project significantly while it was under construction without jeopardizing the initial opening date.

The redesign process with all the formal approvals took over nine months. By the time the increased project was approved almost one-third of the construction was complete. Completing the redesigned project within the original deadline of 30 months was even more of a challenge. Then there is the cost. Due to the redesign, the projects cost rose from an initial Rs 1,412 crore to Rs 2,470 crore. And this is just the first phase of the project.

What about partners?
Choosing the right partners was also important. BIAL pioneered a partner selection process. BIAL believes that competition among airport service providers like cargo, ground handling, food & beverage, fuel, etcetera, is the best way to achieve quality, efficiency and continuous innovation. Therefore, we focused on selecting the right partners and ensuring healthy competition among them rather than offer in-house services.

We had to do this while simultaneously building the BIAL organization. Less than three years ago, we were just a six-member team, today we have grown to over 500 employees. You must remember that the expansion of air transport in India is amongst the fastest in the world and there is a scarcity of experienced personnel. The challenge was not just to find appropriately-educated people, but appropriately-educated people with loyalty, dedication and, most importantly, with experience in airport operations and airport marketing.

Now that you've gotten BIAL off the ground, how will you take advantage of the 3,884-acre plot BIAL is built on?
Just to clarify, the airport that you see today is only in its first phase. There is a master plan for this land. The new Bengaluru International Airport is being developed to fulfill the need for an operationally-efficient and passenger-friendly airport. The master plan ensures that the size and capacity of the airport can be expanded gradually. The land at our disposal allows us to develop the airport up to about 40 million passengers a year.

Coming back to your question, revenue from the airport is divided into aeronautical and non-aeronautical streams. Since the airport is only a month old, it is a bit early to comment on how these two will be split.

However, approximately 15 percent of BIALs revenues are expected to come from non-aeronautical avenues. This percentage will increase as we realize the future phases of the airport, which includes an airport city.

On the aeronautical revenue front, a very important revenue stream is the User Development Fee (UDF). The Concession Agreement (signed between Government of India and BIAL) specifies that BIAL will be allowed to levy UDF from embarking domestic and international passengers to provide amenities, services and facilities.

The UDF will be used to develop, manage, maintain and operate the airport. While international passengers flying out of BIAL pay UDF, domestic passengers will not be charged this fee for the first three months.

When do you think BIAL will break-even?
With the current situation on UDF, we are uncertain about determining a break-even period. UDF is an important revenue stream. You also need to take into account the fact that the new airport will need to be expanded very soon, in fact we are already planning the next stage. For this, additional investment will be required long before we break-even.

Is BIAL optimized for low-cost airlines?
In India, the tax structure for all airlines is the same. But, as an airport operator, BIAL has always taken an airlines perspective into account and has been sensitive to providing long-term business advantages to them.

An example is the partner selection process we've pioneered. We conducted an open and transparent tender process for various services provided at the airport. World leaders in airport services formed partnerships with renowned local companies to participate in the tender process. We chose this route to achieve competitive price structures and maintain quality and service levels for fuel facility, cargo handling, ground handling, duty free & retail, food & beverage, flight catering and other services.

Will you follow Hong Kong airports example and introduce RFID tags for baggage identification?
No, we wont. Our current baggage identification system, the SITA Baggage Reconciliation System (BRS), is very efficient. SITA BRS, which tracks baggage in 220 countries and territories, has developed an integrated, end-to-end baggage reconciliation system which combines barcodes, WLAN and highly-redundant, IP-based global connectivity to ensure baggage gets to its destination on time.

What is IT's role at BIAL?
Good IT infrastructure is the backbone of any first-class airport. At BIAL, technology has been utilized effectively. Some of the pioneering IT apps within the Indian context include the baggage reconciliation system, CUSS (Common Use Self Service), free Wi-Fi in the terminal and automated parking.

Besides having 53 CUSS check-in counters, the new airport has 18 CUSS-enabled self check-in kiosks because we took into account a growing trend of self check in the aviation.

IT has allowed us to create CUSS counters: this facility ensures that no airline has dedicated counters, a standard practice in other airports. At BIAL, an airline occupies a certain number of counters for the duration of a particular flight. Once that flights check-in process is complete, the airline leaves the counters for the next airline. This allows for the optimal use of airport infrastructure.

The benefits of CUSS counters include speedy check-in and decreased waiting in lines (because more counters can be opened depending on the need). This approach also reduces congestion in the check-in hall, decreases demand for additional counter space and offers savings in hardware and software development.

And then there is the automated parking system. BIAL's car park can fit 2,000 cars. It is fully automated with an efficient and transparent management system, provided by SKIDATA, a global provider of car park systems at airports. The car parking system is managed by Central Parking Solutions, Indias largest car park operator.

What are the benefits of using GPS on taxis?
The airport's taxis, Meru Cabs and Easycabs, are equipped with GPS to ensure safety and transparency. The system helps round-the-clock availability of cabs and is backed by a 24x7 customer service center. This gives us a quicker pickup and faster response time to passenger calls for cabs. Clubbed with tamper-proof digital cab meters, GPS ensures that every fare is tracked ruling out the possibility of a driver overcharging passengers. GPS also helps us track the location of a cab in real-time in case of an emergency.

What has BIAL done in showing the road to other private airports?
BIAL is the first greenfield airport in the country to be built under a private-public-partnership (PPP) model. The groundwork BIAL has done will ease the uphill task for other such PPP projects. Weve committed ourselves to establishing BIAL as Indias leading airport in terms of quality and efficiency and set a benchmark for future Indian airports.

Do you have a dream airport in mind?
While we have not benchmarked ourselves against any particular airport, we aim to make BIAL one of the best airports in India. It is important to understand that airports across the world are built to meet various objectives; they are all different in size and in investment.

Our aim is to be truly passenger focused and we have showcased this in our current facilities. For example, passengers can transfer between domestic and international flights under one roof. Further, we are one of the first airports in India that will have a first-class business hotel within walking distance of the terminal. We also have a leisure and entertainment area. Passenger experience should combine business and leisure, therefore it is part of our vision to develop 215 acres of commercial real estate for an airport city.