Aviation, Shipping and Inland Waterways

Components of a Detailed Project Report for an Airport Project

By: Nithin Santhosh, 2011E11, MBA-IM The major components of a DPR of an Airport Project are as follows: Forecasts: Passenger & Cargo Commercial passenger and air cargo flights at airport, which when combined with general aviation and military flights, gives a picture of the potential demand for use of the airport runways. The forecast of aircraft operations (takeoffs and landings) is derived from trends in airline load factors (the percentage of seats filled), trends in the size of aircraft airlines are purchasing, and the frequency of service provided in competitive markets. For air cargo we attempt to estimate the likely division of air cargo tonnage transported in all cargo aircraft ("freighters") versus that which will be carried in the "bellies" of passenger aircraft. Finally, because airport runways are open to the whole flying public, we expect continued use of all air carrier runways by general aviation (small planes), air taxi companies (small planes for hire), and some military aircraft. Air Traffic: Peak & Average, Design Parameters The specific objective of the demand analysis is to prepare detailed traffic forecasts over a 25year period. These forecasts have been prepared under three scenarios (Pessimistic, Probable and Optimistic) and include the following: Annual commercial passengers, Annual aircraft movements, Average day in the peak month and peak hour for passengers and aircraft movements, Modal split of arriving and departing passengers (private car, taxi, bus, train, etc.) are some of the parameters used for the design. Aircraft Mix This factor considers the effect on runway capacity when the airport is used by aircraft of different sizes and speeds. Aircraft mix is the relative percentage of operations conducted by each of the four classes of aircraft. A- Single-engine, 12,500 pounds or less maximum certified takeoff weight B- Multi-engine, 12,500 pounds or less maximum certified takeoff weight C- Multi-engine, 12,500 to 300,000 pounds maximum certified takeoff weight D- Multi-engine, more than 300,000 pound maximum certified takeoff weight. The mix index is the mathematical expression of the aircraft mix, and is the percent of C aircraft plus three (3) times the percent of D aircraft [%(C+3D)].

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Aviation, Shipping and Inland Waterways

Airport Location & Accessibility Defines the proximity of the airport to nearby City or major location of Population. Newer airports are now been constructed in areas which are far from Densely populated areas. Major examples of this are Bangalore International Airport and Hyderabad International Airport. Both the airports are located around 40kms from the main city. This leaves a lot of space for further expansion of airport and also provides safety incentive to the City. Although this initiative can cause a reduction in the accessibility of the airport as a negative impact. Land Use, Master Plan for Air & Land sides An airport project will be in requirement for a large area of land for its Air side as well as Land side. Maximum requirement will be for the Runway as well as the clearance area around the Runway. Also, significant area will be required for the Lighting systems, Communication and Navigation facilities, Aircraft Hangars, Fuel Storage etc. Initially a Master plan will be created for the entire development process. It will be further implemented with the help of various Contractors for the works including Civil, Mechanical, specialized Communication setup contractors etc. Phases of Development Consider the case of the Delhi International Airport by GMR. The various phases of its development are as follows. The phased development sequence is in five-year increments. The initial phases provide a new runway system in the southern sector of the airport site, linked to the existing northern runways (10/28 and 09/27) by a pair of taxiways. New passenger terminal development is focused on the south-western corner of the airport, which has the benefit of no existing encumbrances. The entire new system, including runways, aprons and taxiways is fully compliant with Code (F) aircraft requirements. The new passenger terminal building (Terminal 3) accommodates the bulk of the full service international and domestic traffic streams operating at the airport. The master plan anticipates that Terminal 2 will remain operational in tandem with the T3 facility, supplementing the legacy contact stand supply, until such time that the Terminal 4 construction programme will necessitate its demolition. Terminal 1 is dedicated to the Low Cost Carrier market. Subsequent phases develop the terminal envelope, aprons and landside pavements in a manner, which provides maximum flexibility, in terms of a response to a fluctuating market, as well as an under-one-roof terminal environment. Environmental Impact Assessment Every major Project done has to mandatorily conduct and pass an EIA. It is to ensure minimum impact of the project on the Environment. After the assessment, the EIA report has to be approved by the Ministries concerned, depending on the location of the airport. A complete study of the airport and its impact on land, water, air environment of the surrounding areas are conducted.

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Aviation, Shipping and Inland Waterways

Cost Estimates Cost estimate of an airport will include all the various ways in which cash outflow has to happen to construct a project. It must take into consideration all the factors and points associated with completion of a project. The costs associated with these factors are combined and we get cost estimate. Internal Rate of Return IRR is the rate of growth an Airport project is expected to generate. While the actual rate of return that a given project ends up generating will often differ from its estimated IRR rate, a project with a substantially higher IRR value than other available options would still provide a much better chance of strong growth.

Business Plan, Model, Debt-Equity Ratio Most airports today achieve breakeven with the aid of additional revenue generated from various non-Aeronautical sources of revenue such as Retail space and Cargo storage charges. A full-fledged business plan involving all the various sources of cash flow will be proposed for every project at its conception stage and further implementation will be done. A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.

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