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The Rediff Business Special/Airport Business in Kerala

Tiny state, three airports and politics over profits and losses

George Iype in Kochi

Kerala, the smallest southern Indian state (area = 38,863 square kilometres; population = 29 million), already has three airports, and plans are afoot for a fourth one.

But politics, dwindling services of airlines of the Middle East and allegations of neglect from Air-India and Indian Airlines have landed Kerala’s three airports at Cochin, Thiruvananthapuram and Kozhikode in controversies and losses.

Although the Airports Authority of India has officially declared only Thiruvananthapuram as an international airport in the state, the newly-built Cochin International Airport Limited and the Karipur airport in Kozhikode are also international gateways, specially catering to the Gulf-bound passengers.

However, no other airports in the country are plagued by local politics as the ones in Kerala. To begin with, a powerful section of the Congress and Left parties accuse that Air-India has been deliberately neglecting the Thiruvananthapuram airport for so long that it has started making heavy losses.

Built in 1931 for limited British use, Thiruvananthapuram airport (area = 7,000 square metres) is India's smallest international airport. But local politicians allege that the AAI has been neglecting the airport for so long that the Thiruvananthapuram airport does not have any facilities that an international gateway should possess.

“There are not enough seats in the lounges, no separate lounges for the executive class and not even a good coffee shop. We are ashamed to call it an international airport,” says Congress MLA Thampanoor Ravi.

“There has been no reduction in the traffic volume of the airport. But the income from the Thiruvananthapuram airport has slipped because Air-India and Indian Airlines have diverted many flights from this airport to Cochin and Kozhikode airports,” Ravi told rediff.com.

Politicians blame that Air India and Indian Airlines, which operate maximum number of flights from Kerala, decided not to bring the Boeing 747 to the Thiruvananthapuram airport because of political pressure from Cochin and Kozhikode airports.

According to the AAI, though it is the smallest among India's five international airports -- the other four are in Bombay, Delhi, Calcutta and Madras -- Thiruvananthapuram airport has all the facilities for the landing of the latest aircraft.

“We have spent more than Rs 850 million in the last eight years to expand, upgrade and modernise the facilities at the airport. So how can local politicians accuse us of neglecting the airport?” a senior AAI official disclosed.

But the airport records reveal that Air-India and Indian Airlines have indeed diverted 14 flights from Thiruvanathapuram to Cochin and Kozhikode.

Last year, the airport incurred a loss of Rs 7.8 million and the anticipated loss this year is more than Rs 20 million. AAI officials say the airport is running on loss because it is not getting any grants from the central or the state governments, and maintenance of the airport is being carried out with internal accruals.

According to Air-India regional director, P K Sinha, it is improper to claim that Thiruvananthapuram is being neglected. “We will not neglect any airport in the country. We have served the people of Thiruvananthapuram for the last 21 years. We have developed the market and provided access to all Gulf destinations,” he said.

He said that some of the flights that have been diverted from the Thiruvananthapuram airport have been reinstated.

“Air-India is giving due importance to all the three gateways from Kerala. The operations to the Gulf sector formed the backbone of the airline’s operation and revenue generation. Therefore, we will not neglect or give anyone the upper hand,” Sinha clarified.

Air-India also manages the ground operations of the Cochin airport. Officials say business interest and the need to fulfil the requirements of the state must have prompted the national carrier to divert some flights.

The Cochin International Airport, which was inaugurated in May, was the first airport to be constructed in the country by a state government promoted public limited company. But airline officials say pressure is on them from politicians led by former chief minister and Congress leader K Karunakaran to operate maximum number of flights from Cochin.

“The new Cochin airport was the brainchild of Karunakaran. Therefore, he has ensured that the two other airports do not operate as many flights as the Cochin airport,” a source said.

The Cochin airport caters to 11 million passengers with Air-India having 1,900 seats as well as 611 on domestic sectors, while Indian Airlines has 900 seats to the Gulf sector in a week.

The Thiruvananthapuram airport caters to a population of six million with Air-India alone providing 1,013 seats in a week, 900 seats on domestic sectors and 6,000 seats in foreign airlines.

As many as 12 million passengers are being catered to by the Kozhikode airport with Air-India offering 603 seats and Indian Airlines 2,300. However, the number of passports issued last year in Kozhikode was 137,000, 120,000 in Cochin while it was only 72,000 in Thiruvananthapuram.

Officials say some travel and trade industry houses in the state are also running a campaign against Air-India and Indian Airlines for neglecting Thiruvananthapuram airport and favouring the Cochin and Kozhikode airports.

Cochin International Airports Limited managing director V J Kurien said the public campaign against neglect of airports in Kerala is often politically motivated.

“It is not true that the two other airports are neglected because of the new airport in Cochin. I feel all the three airports in Kerala have the potential and capacity to make profits,” Kurien told rediff.com.

“There are nearly 2.5 million Keralites abroad. Even if they come home once in two years, all the three airports in the state would have good business,” he said.

But leading travel operators feel that it is time the three airports in Kerala gave up their Gulf obsession. “More and more Keralites are returning from the Gulf countries to settle down in the state. So the airports can not bank on making profits out of the Gulf-bound Keralites perpetually,” a leading travel industry analyst Sangeeth Rajan told rediff.com.

According to state government records, 126,867 Gulf Keralites quit their jobs and returned to Kerala in 1988. “The job market in the Gulf for foreigners is shrinking. Last year only 200,000 Indians managed new jobs in the Gulf whereas in 1997 600,000 Indians went to the Gulf,” says Rajan.

“Therefore, no airport in Kerala can remain Gulf-centric. If they want to sustain, they will have to develop on domestic services,” Rajan predicts.

As the acquisition of land for a fourth airport is on in Kannur in north Kerala, analysts and airline officials insist that it is time the airport managements in the state seriously thought of operating on major non-Gulf international and domestic sectors.

'The three airports in Kerala can be in business without affecting each other'

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