Hope is not a strategy : The demand for Mopa

The ICAO Report in 2007 was commissioned by the Goa Government. ICAO was asked to examine the possibility of operating both Mopa and Dabolim. The ICAO Report concluded that air traffic of 28 million per year would be the minimum needed to make this strategy economically viable. Goa's traffic is currently only 3.5 million. Mopa comes online in 2016-17. Where will this incredible increase come from ?

As this article goes on to show, there are no real executable plans in place. The Regional Plan 2021 has nothing that supports such an increase. The Goa Vision 2035 is only a vision, possibly more a mirage. The Tourism Master Plan is still in development. The Goa Investment & Industrial Policy 2013, which is expected shortly, is also not a strategy or a plan of execution. We are lead to the inevitable conclusion that the proposal for Mopa is a castle in the sky - with foundations of hot air.

Given that a very substantial part of the resources of Goa will be poured into Mopa, this is a very worrisome situation. And we have numerous recent examples of failed greenfield airports from around the world to give us pause for consideration.

Failed airports

All over the world, there are numerous examples of failed airports, which were built in the hope that if they build it, the traffic will come. Countries impacted include Spain, China, South Korea, USA, UK, Canada, and Portugal. In a few "ghost airports" around the world, not a single flight has ever landed. For instance, in South Korea, Yangyang International Airport, Muan International Airport and Uljin airports are poster children for failed airports. And 11 out of 14 airports in South Korea are making losses. For China, 134 out of 182 airports are making losses. The Mirabel airport, developed as a second airport for Montreal, eventually failed miserably. There is even an entire website dedicated to tracking closed airports in the US.

Spain in particular holds some lessons for Goa. It was economically very similar to Goa prior to its 2007 crash - an economy booming based on tourism and construction, especially for second homes. Today, the situation is so bad that of Spain's 48 airports, 37 make losses, and there is a long list of failed new airports - Cuidad Real, Castellon, Huesca-Pirineos, Lleida-Alguaire, Badajoz, etc.

Clearly, even if you build it, the passengers may not materialize.

Mopa can cost Goa dearly

If Mopa turns out to be a mistake, it will be extremely expensive for Goa. As per the CM, only 8% of Goa is available for development, or 296 sq. km. The CM also proposes to reserve 154 sq. km. for Mopa, 8 sq. km for the airport itself, and the balance on account of the 7 km no-development zone that he has announced. This is over half of the available land for development. Further, resources will go into 6 lane expressways and other infrastructure to support the airport and its related development.

Minimum air traffic needed for Mopa

The last available study on the feasibility of Mopa was conducted by the International Civil Aviation Organisation (ICAO) in 2007 on behalf of the Goa Government. ICAO estimated the total passengers for Goa would reach 9.3 million only in 2034-35, around three times the current level of 3.5 million. ICAO states clearly that the enhancements to Dabolim that were then in planning (the new terminal, associated parking, an enlarged apron, a taxiway, etc.) were adequate to meet this demand.

ICAO estimated that the minimum traffic required to support both Dabolim and Mopa was 24 million passengers (at the time of the report in 2007.) Due to the increased use of larger aircrafts, this threshold would keep rising, estimated to reach 28 million passengers in 2012. In comparison, Goa's air traffic has stagnated at around 3.5 million for the last 2 years. This is a huge gap.

It can be argued that if there are steeper projections of air traffic growth, Dabolim will get saturated earlier than 2034-35. For instance, the latest projections by the Airports Authority of India (AAI) (in 2011) are that Goa's air traffic will cross 10 million passengers in 2024-25.

This author has earlier shown there is vast unused land in Dabolim for further expansion. This author has also shown that the Navy is building two new Air Stations, at Belgaum and Karwar, with the effect of decongesting Dabolim. Even so, if, despite this evidence to the contrary, we insist that Dabolim cannot be expanded further, a second airport may become necessary to take up the incremental demand. This would still occur only in 2024-25 (when the 10 million threshold is crossed), over a decade away.

	Total Passengers
Year	AAI (2011)	ICAO (2007)	Actual
2006-07		2.213	2.212
2009-10	2.629	2.946	2.629
2012-13	3.752		3.543
2014-15	4.572	4.132
2019-20	7.177	5.483
2024-25	10.391	6.940
2029-30	14.602	8.026
2034-35	19.981	9.267

Mopa is currently planned to come on line in 2016-17. The 2011 AAI projections are for the Goa air traffic to reach 5.6 million in 2016-17, well within the capacity for Dabolim. So what will change the demand trajectory and make Mopa necessary and economically viable ?

With a population of only 1.5 million people, it is difficult to visualise the gap being closed by Goan residents flying more. Before Mopa is complete, the Sindhudurg airport at Chipi will be operational, and the Belgaum and Hubli airports will be expanded. All three airports will handle Boeing 737s/Airbus A320s, which aircraft carry the overwhelming majority of domestic flights. So demand will not come from the neighbouring areas either.

The hope seems to be that the boom in traffic will be achieved through a combination of

1. a massive increase in cargo handled, especially on account of perishable agricultural products and high value:weight manufactures like pharmaceuticals;
2. a massive increase in the number of international or domestic tourists; and
3. the creation of a hub airport (a place where transit passengers change flights to get to their final destination).

Let's examine each of these possibilities and see if this is a spreadsheet exercise, or is there really a reasonable plan of execution in place.

1. Cargo ?

Cargo is a complete non-starter for multiple reasons. First, cargo operations do not require substantial physical facilities. Hong Kong's SuperTerminal 1, the single largest cargo terminal in the world, is only 170,000 sq. mtrs. in area and can handle 3,500,000 tons of cargo. As it is 6 stories high, it uses less than 30,000 sq. mtrs of land (or 7.5 acres.) By comparison, the highest estimate for Goa cargo is 61,795 tons in 2045-46. This can be comfortably handled in a facility of one acre or 4,000 sq. mtrs.

Second, Goa has poor transportation links across the Western Ghats. Agricultural produce from the Deccan plateau would be more reliably transported using NH4 into Mumbai or Bengaluru rather than to Mopa. Further, Pune airport was converted into an international airport to serve the perishable floriculture market. And Shimoga airport is presently being developed in Karnataka to tap this market. Both airports are even more accessible along NH4 compared to Mumbai, Bengaluru or Mopa.

Third, there are few other products (other than limited quantities of pharmaceuticals) that are amenable to air cargo and are manufactured in the vicinity of Goa. And there isn't any plan to change that. At best, we will have an aspirational Goa Investment & Industrial Policy 2013.

There is no plan !

2. Surge in tourist traffic ?

Let's look at the possibility of a surge in tourist traffic. There are two ways to create a surge in traffic. First is to have many more tourists visit during the low and off-peak seasons, basically all the months outside the peak weeks of Christmas and New Years. This does not require the creation of new facilities for tourists. All it requires is more intensive utilisation of the existing facilities. This most obvious issue with this strategy is that even the existing facilities at Dabolim airport would get utilised more evenly through the year, and would not necessitate Mopa.

The second alternative is to look at a surge of tourists with the same time profile as at present. In this scenario, for Goa to exceed 10 million passengers by 2016-17, we would have to triple all our tourism facilities within in the next 4 years - triple the number of hotel rooms, taxis, beach shacks, restaurants, cruise boats, etc. This will require, in turn, a tripling of the supply of electricity, water, sewage, public transport, police, housing for migrants, etc. Tripling all this by 2024-25 will be a stretch. It is clearly impossible to achieve this in four years. The Regional Plan 2021 clearly doesn't contemplate such a scenario. There isn't even a tourism master plan in place.

There is no plan !

3. Create a hub airport ?

A hub airport is one where transit passengers to change flights en route to their final destination. The value of an airport as a hub increases with the number of spokes it has. The spokes are direct flights to a destination. As the number of spokes increase, more passengers would be able to take connecting flights through the hub. For example, in order to travel from Goa to London, you would prefer to transit through a hub which has a direct flight to Goa and a direct flight to London.

Every successful hub in the world has one or a few airlines using that airport in a hub & spoke model. Heathrow has BA, Virgin & BMI; Frankfurt has Lufthansa; and Atlanta has Delta & AirTrans Airlines. The recent hubs that have developed all have a strong carrier, usually the national carrier - Dubai has Emirates; Abu Dhabi has Etihad; Doha has Qatar Airlines; Istanbul has Turkish Airlines; and Kuala Lampur has Air Asia.

Goa's air traffic today

Goa has non-stop flights only to 7 Indian cities - Mumbai, Delhi, Bangalore, Ahmedabad, Chennai, Hyderabad and Pune. Of these, over half are to Mumbai. The top 3 domestic destinations - Mumbai, Delhi & Bangalore - account for over 80% of Goa's domestic flights. There are no direct flights to other popular tourist destinations such as Jaipur, Agra, Srinagar, Tirupati, or Kochi. There is no direct flight to the eastern hub, Kolkata. In comparison, Delhi has non-stop flights to over 50 Indian cities !

Goa ranks only #11 among Indian airports in the number of international passengers handled. There are only 3 international connections that operate through the year - Air Arabia to Sharjah, Air India to Dubai/Kuwait and Qatar Air to Doha. There are no flights to Europe or South-East Asia. Surprisingly, Goa's international traffic is much below many small airports in India. For instance, Calicut, Kochi, Thiruvananthapuram and Trichy all see more international passengers each year than does Goa. Similarly, while Goa's international passengers is only around 20% of the total passengers, each of the above airports has international passengers well over 50%.

More revealing is the list of international airlines that do not fly to Goa. The two big Gulf airlines, Emirates and Etihad, do not fly to Goa. (Last year, Emirates carried the most passengers into India, more than any Indian airline.) There are no flights from Europe from Lufthansa or BA. Singapore Airlines does not fly from South East Asia. Even the Indian private airlines such as Jet, Indigo and SpiceJet do not have international flights from Goa. (Jet has proposed a daily flight to Abu Dhabi in the summer of 2014). The most telling airline that does not fly to Goa is the hugely successful Air Asia, which has hubs in Kuala Lampur and Bangkok. Air Asia is owned by Tony Fernandes, who of Goan origin !

The argument that appropriate slots are not available at Dabolim for international flights doesn't hold water. Dabolim is not available for civil operations only between 8:30am and 1pm. Further, this applies only on weekdays. Dabolim is heavily utilised between 1-3 pm, and again from 4-5pm. Outside of these three hours, there are very few flights.

A careful analysis of international air traffic in Delhi shows the following patterns - Middle East flights have a pronounced peak between 3-6 am - Dabolim has slots available; European flights start around 11pm and go on till 3pm the next day, and over half the flights are in the night - Dabolim has slots available. It is clear that if there were demand, it would be possible to schedule flights.

Can Goa create a hub airport ?

At present in India, Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Hyderabad serve as hub airports for their respective hinterlands. For example, in order to travel from Goa to Jaipur, you would need to transit through either Mumbai or Delhi. Delhi has specifically been identified by the Ministry of Civil Aviation to be developed as an international hub.

The private operators of Delhi, Mumbai, Bengaluru and Chennai are aware that a lot of the value of their airports stems from being a hub and are actively lobbying against the creation of another hub. There are also competing attempts at creating hubs. For instance, MIHAN at Nagpur has been expressly created as a hub airport, given that it is the geographic centre of India.

Compared to the main Indian hubs, Goa has far fewer "spokes" (direct flights to unique destinations). This is true whether we look at domestic or international destinations. In order for Goa to succeed as a hub, it will need to develop many many more direct flights, both domestically as well as internationally.

A further complication for the creation of a hub is the dual operation of Dabolim & Mopa. This makes creating seamless flight connections difficult, and significantly reduces the likelihood of a hub developing. And which is the airline that will use Goa as its hub ? There is no obvious route to success in creating a hub airport, nor has a plan been articulated.

There is no plan !

In conclusion

ICAO indicated that the planned Dabolim expansion will be enough to cater to Goa's air traffic needs for a long time. ICAO also indicated that 28 million passengers a year would be needed as of 2012 to make both airports viable. Goa's present traffic is only 3.5 million. In order to bridge the gap, there needs to be a massive expansion of air traffic in Goa. In order to achieve this expansion, it is not enough to simply create an airport. There needs to be well laid out strategies and plans at the state level to win away air traffic from competing airports and the create the skills and supporting infrastructure needed.

The state is proposing to reserve over 50% of its developable land for Mopa. It will also have to utilize a lot of resources to create supporting infrastructure, such as the 6 lane expressway. It will also draw significant management resources and attention at the top levels of the State bureaucracy and politicians. The state has many other pressing issues such as education or health and sanitation that compete for the same resources. A failure of Mopa will be extremely expensive for Goa.

However, it is amply clear that real execution plans or strategies have not been created to support a massive expansion in air traffic to Goa. The inevitable conclusion is that Mopa is being built on hope. The hope is that once built, traffic will follow.

But as so many failed airports around the world have shown us, Hope is not a Strategy ! Unfortunately, like Pandora's box, hope seems to be all we will be left with.