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SINDHU.C.D URN: 0801010021

In partial fulfillment for the award of the degree of


Guided by

Dr.G.Vanishree Professor & HOD Vignan Institute of Technology & Aeronautical Engineering Vignan hills, Nalgonda distt, AP - 508284
Submitted to





This is to certify that the project entitled


GENERATING OPPORTUNITIES IN AN AIRPORT WITH SPECIAL FOCUS ON THE BANGALORE INTERNATIONAL AIRPORT LIMITED is the bonafide record of project work done by Ms. SINDHU.C.D URN: 0801010021 of MBA during the year 2010-2011.

Signature of the DIRECTOR,DODE

Signature of the PROJECT GUIDE

Submitted for the Project Viva-Voce examination held on _________________.




DECLARATION I affirm that the project work titled A STUDY ON REVENUE GENERATING OPPORTUNITIES IN AN AIRPORT WITH SPECIAL FOCUS ON THE BANGALORE INTERNATIONAL AIRPORT LIMITED being submitted in partial fulfillment for the award of the degree of MBA is the original work carried out by me. It has not formed the part of any other project work submitted for award of any degree or diploma, either in this or any other University.

Signature of the Candidate Sindhu.C.D URN: 0801010021

I certify that the declaration made above by the candidate is true.

Signature of the Guide Dr.G.Vanishree Professor & HOD Vignan Institute of Technology & Aeronautical Engineering Vignan hills, Nalgonda distt, AP - 508284



I am very thankful to my project guide Dr.G.Vanishree for being a source of constant support to me during the project I am also thankful to all respondents for their support and positive response towards my endeavor, in spite of their busy schedules and also for providing me all the necessary information and details in order to successfully carry out my project. I would specially like to express my gratitude to my husband Mr.K.G.Suresh Kumar, Bangalore International Airport Limited, for his guidance in carrying out the project as well as advising me throughout the duration of the project. Without his sincere and untiring help and constant encouragement the project could not have been successful.


TABLE OF CONTENTS Chapter no. TITLE Page no. Abstract List of tables List of Figures 1 1.1 1.2 1.3 2 3 4 5 Introduction Objective Theoretical Background Company profile Analysis and Interpretations Findings Conclusion Suggestions References Annexure vi vii viii 1 5 6 19 37 49 51 53 56 58



The first successful flight of airplane by the Wright brothers in December 1903 changed the way men travelled .With the construction of large capacity airplane the need for large, well laid out airports came up where ticketing, embarkation, customs, Immigration were set up. With only an initial cost component involved in setting up an airport, the airports started recovering the cost in subsequent years and started earning profits from the fee generated by the airlines and airplanes using the airport. With the economic turmoil in the nineties, airports started losing their incomes as airlines started defaulting on their payments as their survival itself became doubtful and many airlines wound up due to low seat factor, rising fuel cost and other operational cost. The need to renovate and look in to non-aero revenues was felt for the airport survival. Some of the airports in Europe started adopting innovative methods in the nineties itself and started showing encouraging results. BIAL became operational on 23 May 2008 and now, has taken up expansion plan and is in an enviable position to adopt successful marketing methods taken up by other airports. To get a rough picture of this, a questionnaire was prepared and circulated among 100 randomly selected people at the airport. The results were collated and the following points emerged which can be considered into the expansion plan of BIAL to achieve the leading edge and to become the favorite destination for people around the world. The profile of the people coming to the airport is of economically well-off type, tech-savvy, well travelled or well informed of the latest trend in lifestyle globally. They are eager to lap up the idea of airport not just a transit point for travelers but also a leisure destination where one can spend quality time with relatives and friends even if it means shelling out extra money. So the airport authority can go ahead with innovative, value added service to the public without worrying about the viability.



1.1 Global Airport Revenue -2007, p-8. 1.2 Salient features of the passenger terminal, p-23.


1.1 1.2 1.3 1.4 1.5 1.6 VIP Lounge, p-25. The Reserved Lounge, check- in Hall,p-26. The Kingfisher Lounge, Domestic Departure,p-27 The Oberoi lounge, International Departure,p-28 Air India Lounge, Domestic Departure,p-29 VVIP Terminal, Airside, p-30.






As per Philip Kotler, a well-known author in the field of marketing Marketing is all activities which are aimed at the satisfaction of buyers needs and wishes by means of trading processes. AIRPORT MARKETING: Airport marketing is a niche from this perspective. The traditional airport concept offers core trading products, namely transfer of passengers and goods. Today, airports have become commercial enterprises with value propositions, specifically designed to target specific market segments. In the latter part of the 1980s, inadequate runway capacity, congested terminals, ATC control delays generated poor publicity for airports in Europe, the United States and to a lesser extent, Asia. It would be valuable to assess airport financial performance in terms of the returns on the assets employed. However, in practice it is very difficult to arrive at the true asset value of airports in different countries. While many of the larger US airports have been profitable for

many years, the airport-use agreements which some US airports have with their airlines prevent them from earning large profits. Several do little more than break even as a result. The published financial results of the larger and apparently profitable airports may in many cases mask the true economic performance even of those airports. This may be so where an airports cost have been underestimated for the following reasons: 1) At many airports, particularly those still run by government departments, grants received from international agencies or even the airports own government may not appear as a cost in the airports accounts. Assets financed from such grants may not be charged a depreciation cost. Furthermore; such grants may be interest free. Another shortcoming in accounts may arise where government grants or subsidies are used to cover up annual operating losses. 2) Where services at an airport are provided by other government departments for eg; RWY maintenance by PWD, the airport may not be charged in some cases. These costs may well not be reflected in the airports accounts. 3) The ATC especially, aerodrome, approach control services is operated at a loss by the respective civil aviation departments. Including such losses in airport accounts would reduce or eliminate the profits. The two main strategic business units managed by an airport enterprise are known as the aviation-related and non-aviation related business. AVIATION RELATED ACTIVITIES: Landing fees, ATC fee, Passenger and cargo landing fee, Housing and handling fee.

NON-AVIATION RELATED ACTIVITIES: Rents from additional spaces to airlines, general sales agents, catering firms,forwarders,cargo operators, tour operators, travel agents, rents and commissions from various commercial ventures like boutique, duty free shops,bars,parking site etc.,Direct sales arising from shops owned or managed directly by airport authority. IMPACT OF ECONOMIC CRISIS ON AIRPORTS 2008-2010 is likely to be lost years in terms of growth. Airport revenue decline in all areas due to fewer passengers, fewer aircrafts, smaller/lighter aircrafts, reduced spending overall and per head. Operating costs remain high which weighs on the profits. Safety, security and service quality remain high on priority

AERONAUTICAL OPERATIONAL COST VS.REVENUE High level of fixed operating cost due to personnel and maintenance requirement for safety and security. Airport industry operating cost absorbs 60% of total airport industry revenues. Only 50% of total airport industry revenue generated by aero charges. There is no or low profit margins. Constant pressure to keep the user charges low while on the other hand improving standards and facilities. In most regulatory spheres, the customer is the end-customer, e.g. energy,

telecommunications. In contrast, in aviation, the user is frequently identified as the airline.

Airlines, themselves are operating in the red and are not in a position to remit the aero charges to the airport. The IATA figures below show the 2009 figures and forecast for 2010. The IATA announced a revised outlook for the global airline transport industry with losses of US$ 4.7 billion in 2009.This is significantly worse than IATAs forecast for a US$ 2.5 billion loss in 2009, reflecting the rapid deterioration of the global economic conditions.

ASIA PACIFIC Carriers in this region continue to be hardest hit by the current economic turmoil and are expected to post losses of US$1.7 billion. Overall; the region is expected to see a 6.8% fall in demand but only a 4.0% drop in capacity. The IATA revised its financial outlook for 2010 to unexpected US$ 5.6 billion global net losses. The above figures shows airlines are going deep into the red and recovery is going to be slow. Thus airlines will continue to default on aeronautical fees payments like landing, ATC, facilities fees etc. which will in turn bleed airport operators who rely more on aeronautical revenue.Govt.owned airports will continue to operate in the red due to the support from the govt.Private operator will not be able to sustain on aeronautical revenue alone.Infact they will have to make the non-aeronautical revenue model a major part of their revenue generating source.

Objectives of study To find out why airport revenue is fully dependent on the performance of the airlines. To find out an alternate source of income for airports.

To find out ways to make right use of the available space in an airport. To make airports more customers oriented. To treat travelers as potential shoppers. To consider meeters and greeters as potential customers.

Scope and limitations of study The scope is very limited because attitude of the people change according to time and circumstances. The study is restricted to Bangalore and the International airport and that too among 100 respondents. The study is conducted for 45 days. The study is restricted to a certain area which will not give an accurate picture of the entire country.


An airport is a location where aircraft such as fixed-wing aircraft, helicopters and blimps take off and land. Aircraft may be stored or maintained at an airport. An airport consists of at least one surface such as runway, a helipad, or water for takeoffs and landings and often includes buildings such as hangars and terminal buildings. Larger airports may have fixed base operator services, air traffic control and passenger facilities such as passenger check-ins, emigration, customs, restaurants, lounges and emergency services. AIRLINES: Airlines are company or corporations who run aircrafts of different sizes as per the passenger size in that particular route.Travellers prefer air travel over road, rail or sea because of speed, convenience and long distances. These aircrafts land and take off from places called airports. The airports provide all service for a smooth take off, landing and transit of the aircraft and passengers. Due to the sheer size of the aircraft and its passenger capacity airports are generally giant structures consisting of terminals, concourse connecting to aero bridges, skywalk etc, runway, taxi track, fuel farm, cargo sheds, hangars etc.Other expenses is the power and water requirement to run an airport. Operating an airport requires substantial investment and continuous investment for retaining manpower and latest technology to keep up the security and safety standards. AIRPORT TERMINAL: An airport terminal is a building at an airport where passengers transfer between ground transportation and the facilities that allow them to board and disembark from aircraft. Within the

terminal, passengers purchase tickets, transfer their luggage, and go through security. The buildings that provide access to the airplanes are called concourses or terminal. Here the passengers spend their time doing the formalities for boarding and then wait for the announcement for boarding. Nowadays all airlines require the passengers to be available at least 02 hrs for domestic and 04 hrs for international flights due to the heightened security checks. So a passenger has more time in his hand waiting at the terminals. MEETERS AND GREETERS: The people accompanying up to the airport or assembled to receive the passenger from at the airport are called meters or greeters. In India where joint family system of living is still prevalent every journey is a celebration and the whole family and sometimes the neighborhood turns up at the airport for seeing them off or to receive the passenger. REVENUE: The revenue for operating an airport comes basically from the airline operating in the form of landing, housing fees, navigational & ATC fees. But with the recession setting in airlines have lost passengers resulting in low load factor. Airlines operational costs remain the same for that particular route regardless of whether the aircraft is full, half or a couple of passengers. This led to heavy losses for the airlines and many wound up operations. The remaining defaulted on payment to the airport. The airport operators had no other alternative other than to bear the losses keeping in mind the loss in load factor and also there were not many airlines operating now.

The latest survey published by Airports Council International underlines the vital role of nonaeronautical revenues as a proportion of airports income. The 13th edition of the ACI Airports Economic Survey shows that in 2007,non-aeronautical revenues among airports worldwide was US$40.5 billion, or 48% of all airport revenues-a proportion that remained constant when compared to 2006. GLOBAL AIRPORT REVENUE-2007

Aeronautical 42US$ billion

Non-aeronautical 40.5US$ billion Table-1.1

% of non-aero revenues 48.3 %

The survey also reports that airports held down airline charges to less than US$ 18 billion in 2007(of the total airline operating cost of US$488 billion, as reported by IATA),which means that just 3.5% of airline operating costs are associated with airport user charges. ACI said: These aircraft-related revenues are below actual operating expenses incurred, and therefore passenger fees along with airport non-aeronautical revenues are subsidizing the aircraft-related charges.

THE SOLUTION: A planned, well researched method can be adopted by the airports from enhancing their revenues from non-aeronautical to making them a main revenue generator and slowly reducing the dependency on aeronautical revenue.

The revenue method from non-aeronautical methods can be broadly categorized into the following: RETAIL, REAL ESTATE AND SERVICES. Suffice to say that all three are interconnected. RETAIL: Developing a concessions program that goes beyond industry standards requires thoughtful planning, a strong customer orientation and hard work This can be divided into two i.e., inside the terminal and outside the terminal or air side and land side in aviation jargon. 1.2.1 INSIDE THE TERMINAL:

Already a proven business model exists at all airports worldwide inside the terminal. Some of the airports have come up with innovative methods adapted to their region which has generated good revenues for the airport.


Some ideas which can be adopted by an airport are: KIOSK APPROACH: Some examples of new concessions with lower capital costs are - Coffee bars, snack bars (food concepts without kitchen). - Retail kiosks like small gifts, dress accessories, ladies make up kits, sunglasses, perfumes, books . - Chair massages concessions: They provide an open site for quick, relaxing tune-upside is required to be taken mainstream, bring it out from behind closed doors, make it visible, affordable, accessible, fun and healthy. - Sleeping units Tenant shall use the premises to rent private rooms that include desk top or wi-fi,electrical & data outlets and a bed and bath without any frills, focus being on cleanliness, promptness and good service i.e., helpful staffs. Advantage of kiosks: Flexibility, because no eviction necessary, short time concept, termination as per

convenience, partial termination if offered multiple space, relocation clause so that one can move kiosks if needed like if an airline reduces or cancels service. - Revenue structure can be same as normal concessions i.e., percentage of gross profit. - Reduces administrative problems for airport property and accounting staff.


- Reduced capital cost: - Little or no capital improvements required of concessioners or airport. In tight credit market you can accommodate entrepreneurs who dont have access to large amount of capital. - Short start up time, can be just rolled in compared to the time taken for design and construction of a permanent structure.

- Abandoned spaces can be made good use of.

ADVERTISING PROGRAMS: Airport advertising can reach an exclusive and upscale audience, and can be an important complement to the standard media mix. With longer dwell times, airport customers can now take the time to read advertisements. Modern airport advertising programs specialize in the sales and maintenance of advertising sites at airports. High visibility spaces like the waste bins, baggage trolleys,banners,moving walkways, escalators and even web sites which dont spoil the aesthetics can be used for short and innovative advertisements. The building facade on the outside i.e., towards city side can be plain or built to keep up with the local flavor and regional tastes. The airside face of the terminal building along with the gates, aero bridges, transfer buses and other large vehicles used by the ground support equipment company can be used for innovative, visible advertisements which can be seen by the arriving and departing passengers. OPTIMIZE TECHNOLOGIES: Technological innovations also offer opportunities for airport revenue enhancements. Touch screen directories: Touch-screen airport directories provide passengers with a complete directory and way finding system. Most systems include a directory of area hotels, car rentals,


restaurants and shopping, as well as area maps. Some listings are even linked to a floor plan showing the current location as well as a guide to their desired destination. Also available are real-time flight information displays, including arrival and departure status and gate information. Information can be viewed interactively with a touch screen interface. The touchscreen kiosks require less space and provide tremendous customer services as well as another revenueopportunity. Wi-Fi applications: Airports that are providing wireless internet service for travelers find that short term contracts allow them to assess their needs as technology and the needs of users evolve. Under some agreements, the airport receives a percentage of the user fees. Opportunities also exist to provide Wi-Fi for free, but also to sell advertising on the launch page through the use of a simple ad bar at the bottom or top of the screen.However,this needs to be nonintrusive and must avoid pop-ups. iFIDS: Internet based Flight Information Display Systems provide real-time airline information through the use of the Internet, eliminating the need for information technology investment and infrastructure. The cost-effective kiosks can be configured to display multi media images and text messages offering a tremendous revenue potential.

Banners draped across the sky bridge or on the exterior of the terminal building are raising the bar on non-aeronautical revenues and are quickly becoming the newest form of airport advertising that gives ownership to a specific brand name. Furthermore, advertisements can be used to improve the airports image and propose modern and creative ideas to travelers. In Johannesburg, South Africa, advertising has been placed on unpaved airfield land to maximize advertising revenues.



Here lies a goldmine of opportunities if in possession of large amount of land which holds true for a Greenfield airport which usually is sited in a sparsely populated area with large tract of waste lands. The following are some of the opportunities: Commercial development and land use: To optimize revenue generated from commercial sources, one should adopt policies and practices that can unlock the considerable potential that exists within many airports to fully develop and exploit commercial activities to increase revenue. A number of airports have developed portions of their airport properties to accommodate nonaviation commercial enterprises. The type of businesses found on airport property includes: Industrial uses Import and export Manufacturing Warehousing Research and development Cargo facilities Bulk storage Outside storage


Commercial uses Restaurants Commercial office spaces Hotels and motels Recreational centers Training facilities Small business centers Retail sales Industrial businesses Car rental agencies Automobile dealers Golf courses Movie theaters Recreational and training facilities Airports may have opportunities to generate and sell energy and utility services to tenants, nearby businesses or communities or regional utilities at a net profit. For example: An airport could purchase utilities wholesale from the local utility company and sell the utilities to tenants at the retail utility rates they would have paid the utility company. An airport steam plant could be sized to produce a cost effective steam district to nearby hotels or other large institutions.


Electricity from solar or wind sources could be generated on airport property to offset airport electricity or costs, or be sold to the local electric utility and tenants. As restrictions on emissions increase, local utilities may be willing to subsidize airport investment in alternative energy equipment on airport property. PARKING REVENUES: Parking revenues are the most significant sources of nonairline revenues at airport .Although parking has long been a revenue source for airport operators, recent innovations provide further opportunity to enhance parking revenues. some of the innovative ideas used successfully at airports around the world are: PREMIUM PARKING SERVICES: Valet parking: Many airports offer valet parking that allows a customer to drop off their car at the terminal curbside and upon the customers return, retrieve their car at this same location. Valet services are typically popular among business travelers and can benefit airport operators if vehicles are stored in underutilized portions of a garage. Monthly or corporate reserved parking: Several airports sell monthly or corporate access cards and guarantee that card holders can always find an empty space in the convenient parking area reserved for their use. Card holders are charged a premium rate often a monthly fee to gain access to the reserved space. Airports have found that this service is popular with patrons and can generate significant additional revenues compared with standard rates. Discount parking and loyalty programs: Private airport parking companies have offered discount coupons and loyalty (frequent parking) programs for many years. Parking based loyalty programs are similar to frequent flyer programs in that they offer repeat patrons reduced rate


parking. Alternatively, the frequent parking points can be applied to goods and services available in the airport in the form of discounts on concessions.

Internet based parking reservation: In Europe airport parking patrons can use the internet to reserve and pay for parking in advance of their arrival at the airport. In the United States, many private airport parking companies also use the internet to allow prospective customers to reserve and pre-pay for parking. Parking guidance system: To reduce the time patrons spend searching for an empty space airports are installing changeable message signs activated by low cost overhead vehicle detectors that clearly display space availability for each space .These guidance systems result in better utilization of the available spaces, rather than requiring patrons to conduct random searches across large floors or garages. TERMINAL CONCESSIONS: Although airlines are currently struggling with yields, labor issues, and rising fuel costs, passengers are returning in record numbers. Today, airport shoppers are recognized as a lucrative market and airport retailing is evolving to meet that market. Concession sales have increased dramatically as airlines discontinue meal services and changes in airport security require that passengers arrive early, consequently finding themselves with extra time in the airport and being a captive audience to the products and services offered by an airports concessionaires. POTENTIAL CUSTOMERS: The people accompanying up to the airport or assembled to receive the passenger from at the airport are called meters or greeters. In India where joint family system of living is still


prevalent every journey is a celebration and the whole family and sometimes the neighborhood turns up at the airport for seeing them off or to receive the passenger. Even though the entry is

restricted the meeters and greeters wait outside the terminal till the aircraft takes off. They spend a great deal of time doing nothing other than waiting. Human psychology dictates that the meeters, greeters and passengers are in a state of sadness over the separation and travel whatever the circumstances may be.A diversion in the form of shopping or entertainment will surely go a great way in engaging the people and turning them into prospective shoppers or customers. Every one cannot afford premium jewellery, apparel or electronic goods available at the duty free shops inside the airport, but window shopping surely diverts the mind. This may turn them into a future prospect for shopping as the airport experience will help in instant recall of the brand and also the shop location immediately over other locations. Frequent travelers wont bother to revisit these places unless he has a particular thing in mind to buy. They too can be turned into customers if promised with easy and fast shopping experience by offering innovative and attractive marketing techniques. Some of the format workable outside the terminal to attract customers is: Shopping mall concept: A shopping mall concept store outside the terminal will convert the people at the airport into customers and bring in the footfalls. The airport needs to lease out the place to a reputed and experienced entity in running the mall. Revenue can be worked out on a profit sharing method instead of rent or fixed fees or minimum fees. This will give great flexibility to the mall operator depending upon the turnover. Here one can add the airport employees amounting to


2000 to 4000 in numbers as customers some time or other. Small concessions in the form of coupons, food pass with tie-ups with third party players will assure loyalty to the airport shops.

Multiplex: A multiplex on the outset may seem a losing business model at an airport but there is great potential if an aeropolis or airport city is part of the plan. The passengers or people accompanying them are certainly not going to visit the multiplex but as with any airport, the area surrounding the airport is surely going to develop with time with commercial and residential projects. If an airport city is planned, then the business in multiplex is assured with the right marketing and format. Unused space: Empty spaces meant for future development can be hired out for exhibitions, special events like cinema awards, motor shows, fashion shows etc.




Bangalore International Airport Limited (BIAL), the owner and operator of the airport is a public limited company, registered under the Indian Companies Act. Bangalore International Airport is an international airport serving the city of Bangalore. The airport is located 4 km south of Devanahalli and is 40 km from the central business district of Bangalore 30 km from the Bangalore City Railway Station and covers 4,000 acres. It replaced the HAL airport. For the period of AprNov 2010, it was the fourth busiest airport in terms of overall passenger traffic and fifth busiest in terms of international passenger traffic. The airport handled about 9.3 million passengers and had air traffic movements (ATM) of about 280 per day in the year 2009. The airport is expected to handle 17 million passengers in the year 2015. The airport is host to 10 domestic airlines and 21 international airlines connecting the city to about 50 destinations across India and rest of the world. The airport serves as a hub for Kingfisher Airlines and a focus city for Jet Airways, JetLite, Indigo, Spice Jet , Go Air and Indian Airlines. The Government of India has given BIAL the exclusive right and privilege to carry out the development, design, financing, construction, operation, and management of the airport for a period of 30 years from its opening date, with an option to extend the concession for another 30 years. No new or existing airport will be permitted to operate as a domestic or international airport within 150 kilometers. The Government of India, represented by the Ministry of Civil Aviation, is committed to equal treatment and non-discrimination of all international airports and to renew the bilateral agreement constantly.


Ownership: BIAL is a Public Limited Company under the Companies Act formed to build, own and operate the Bengaluru International Airport. BIAL has been given rights by the Government of India to develop, design, finance, operate and manage the airport for a period of 30 years from the date of commencement of commercial flight operations. It also has an option to extend the right for an additional 30 years .The airport project started as a public-private joint venture between Germany's Siemens group, Government of Karnataka and Airports Authority of India (AAI). As of 2011 the holding pattern is private parties hold 74% (Siemens Projects Ventures 40%, GVK 29% and Unique Zurich 5%) stake in BIAL while the government holds the remaining 26% (Karnataka State Industrial Investment and Development Corporation 13% and Airport Authority of India 13%). Construction of the airport began in July 2005, after a decade long postponement. The new airport was originally planned to accommodate 3.5 million passengers a year, but this was redesigned to handle 12 million passengers per year. The redesign resulted in an increase in the size of the terminal; number of aircraft stands, new taxiway layouts and supporting infrastructure. A plan is also being processed for a direct rail service from Bangalore Cantonment Railway Station to the Basement Rail terminal at the airport. Access on the National Highway 7 has been widened to a six lane expressway, with a 3 ft (0.91 m) boundary wall, as construction moves ahead.

The airport was expected to be inaugurated on 30 March 2008 but due to delays in air traffic control (ATC) services, it was finally inaugurated on 23 May 2008 just before midnight when a Jet Airways flight from Mumbai landed here. Also, minutes later an Indian flight to Singapore left Bengaluru International Airport, making it the first ever take-off from the airport.


Spread over an area of 4000 acres approximately it employs over 5000 employees including concessionaire. Built on a footprint of eight acres of land, the terminal building is spread over 71,000 sq mts.Outside the terminal it has a parking lot to accommodate 2000 cars and 75 coaches. In the terminal, both on the kerb side and in the waiting area inside the terminal there are different retail enterprises like the HMS Host, a world leader in airport dining and shopping innovations, operate the food and beverage offering passengers and visitors a variety of cuisine from all over the world. Nuance, the worlds premier airport retailer in partnership with Shoppers Stop operates the retail and duty free outlets at the airport.

Passenger terminal The passenger terminal is a single, fully air conditioned, four-level building capable of accommodating international and domestic operations. The basement houses the retail storage, rest areas and services. The arrival and departure areas are separated vertically with a modern, simple, straight-ahead flow system. The domestic and international departure lounges, and the majority of the retail outlets are located on level 2 (first floor). The check-in facilities and baggage reclaim are located on level 1 (ground floor). The terminal is designed for ease of operation and minimum maintenance. The total floor area is approximately 71,000 m2 (760,000 sq ft) and the terminal building is designed to accommodate 3,000 passengers at peak hour. The design reflects the best industry practice and caters for 24-hour-operations, under all weather conditions. The airport well meets the standards set by the Airports Authority of India (AAI), the International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA). The airport can handle 11 million people per annum with 27 aircraft movements per hour and an estimated 550 movements. At its peak, it can handle 720 aircraft movements in a day. Common Use Terminal Equipment (CUTE) enabled check-in counters: 54


and 20 self check in counters. The airport has 20 gates, 8 aero-bridges, including one double arm and 19 remote bus bays. There are a total of 42 aircraft stands, all of which have a fuelling pit. This is the first time in Indian airports that the parking stands have the fuelling pits. The underground pits help the aircraft to fuel from the stand itself. In the first phase of development, a car park for 2,000 cars in front of the terminal building at the ground level has been developed for the convenience of passengers and visitors to the airport.


Salient features of the passenger terminal: Terminal area: 71,000 m2 (760,000 sq ft) Peak passenger handling: 3,000 per hour (Phase 1)

Boarding gates: o Type: PC and 2D barcode based o Number: 20 Aero-bridges: 8 (including 1 double arm) Bus bays: 9 (for arrival and departure) Parking: 2000 vehicles and 75 coaches (Phase 1) Check-in counters: 71 (total) o Cute enabled check in desks: 53 o Self Check-in kiosks (CUSS): 18 Security check o Domestic: 8 Airport Security Units (APSU), 1 X-Ray per APSU o International: 5 APSUs, 1 X-Ray per APSU Baggage screening: Five level security screening system for checked-in baggage Immigration counters: 36 (total) o Departure: 18 o Arrival: 18 Baggage carousels: 7 (total) o Domestic: 3 o International: 2 o Domestic and International: 2 o Length: 2 x 59 metres (194 ft) 3 x 53 metres (174 ft) 2 x 97 metres (318 ft) Runway o Elevation: 915 metres (3,002 ft) o Orientation: 09/27 o Length: 4,000 metres (13,000 ft) o Width: 45 metres (148 ft) o Width (runway plus light paved shoulders): 60 metres (200 ft) o ILS: CAT I (both ends) Aircraft stands: 42 (code C aircraft)

Table 1.2


Hajj terminal Bengaluru International Airport has an exclusive terminal for Hajj pilgrims. This terminal covers an area of 1,500 square meters (16,000 sq ft) and can handle up to 600 passengers at a given time. Designated prayer rooms for men and women and for Wazu (cleansing before prayers) separate hot water facilities are available at this terminal. Runway The airport has one runway that can accommodate all types of aircraft. There are plans to build a second runway when the annual traffic of the airport reaches 18 million passengers per year which is currently estimated to reach around 2013-2014 Passenger conveniences: Retail and duty free Nuance, an airport retailer, in partnership with Shoppers' Stop provides a complete shopping experience by operating the retail and duty free outlets at the airport. Operated by the Nuance Group, one of the largest, a specialist duty-free operator in the world, this superior retail environment aims to offer the ultimate airport shopping experience. The duty-free stores feature over 10,000 products from some of the finest brands from all over the world. The dutyfree liquor here has one of the widest ranges across international airports in India. Food and beverages HMSHost corporation, an airport food-service company and subsidiary of the Italian company Auto grill, operates the food and beverages at the airport. It offers passengers and visitors to the airport a variety of cuisine from all over the world.


Lounges Plush, sleek and stylish. These words best describe the variety of lounges the airport has to offer at the Bengaluru International Airport. They cater to the needs of a varied group of travelers and are new levels of luxury at Indian airports. All lounges are unique. In their own way, they ensure that the guests are pampered and the time spent at the airport is in sheer comfort and luxury. Get a sneak peek at all the lounges and read about the accolades received from guests who have cherished their stay at the airport.

VIP Lounge

Figure 1.1 Bengaluru International Airports new VIP Lounge is located on level 1 of the terminal. It caters cater exclusively to departing domestic and international dignitaries, ensuring them a smooth and hassle free airport experience from their arrival at the terminal right up to flight boarding. Equipped with comfortable seating, Wi-Fi facility, Televisions and Flight Information Display Systems,


this lounge is operational 24/7 and can seat 20 guests at a time. As Bangalores status grows as an attractive tourist and business destination, the number of high profile and eminent persons passing through the airport is also increasing. We aim to offer each of our passengers with an exceptional transit experience and feel it imperative not only to provide these guests with a striking first impression of the city, but also lavish upon them hospitality and care that is commensurate with the states heritage and culture. The lounge is expected to receive 30 such guests on an average per day. The Reserved Lounge, Check-in Hall

Figure 1.2 Past the elevators at the check-in hall of the Bengaluru International Airport, is the reserved lounge that caters to high-profile and important travelers. Strategically located in the terminal building, it is accessible to both departing as well as arriving guests. This plush lounge is a secluded corner of comfort, exclusively for the likes of MPs, chief secretaries, visiting dignitaries and


high-profile executives. Capable of accommodating 16 individuals at a time, it also has a private room for a small group to hold discussions or for users to relax in a quiet environment. Tastefully fitted with luxurious loungers and single sofas, the lounge is fully equipped with Wi-Fi facility, an inhouse pantry, and restroom with shower facility, television, and reading material. The 24/7 lounge is serviced by ten well trained guest relations staff from BIAL.

The Kingfisher Lounge, Domestic Departure

Figure 1.3 The King of Good Times, Dr. Vijay Mallya, envisioned this lounge as one that will provide flyers a taste of the wonderful experience they'll have on the flight, even before they board. This snazzy lounge offers world-class facilities to cater to the premium class traveler both business and first class. The Kingfisher corporate colour, red, is highlighted in the paneling, seating, flooring and the lighting to create a relaxing and soothing feel. The ambience and aesthetics compliment Indian


culture in modern environment. Designed to cater to 70 business class and 20 first class travelers at any time, the lounge pampers you with an array of exclusive facilities that include a library, communication and shower facilities. It also offers dedicated buffet and eating areas. Other general facilities available are high-speed broadband Internet access, and food and beverage. A business center in the lounge, complete with Apple desktops, scanners and printers ensures that you have the comfort of your office at the airport! A new dimension to the lounge services will be the bar service. Presently serving tea, coffee and juices, the bar will soon obtain the necessary license, to serve alcoholic beverages. The seating at the lounge has been given ample thought, keeping in mind the varied requirements of the guests. Opt for restaurant-style seating if you want a sit-down meal, or sink into a sofa for greater comfort. Bar stools create an informal and chic setting while sofa seating for groups or families, and individual bucket sofas for guests who prefer privacy are also available. The Oberoi Lounge, International Departures

Figure 1.4


This plush and inviting executive lounge at the International Departures, operated by the Oberoi Group, blends exclusivity with a feel of India. Its luxurious environs create a contemporary, comfortable ambience surrounded by South Indian heritage. The lounge caters to first and business class passengers of international airlines which have partnership tie-ups with The Oberoi Group. Here, you have dedicated areas to cater to the individual needs of both sets of passengers. An exclusive shower room, a dedicated bar and relaxed seating are some of its features. The lounge for first class passengers offers classy reclining chairs with levers that you can adjust to suit your comfort. The lounge also offers anytime Wi-Fi access for the business traveler. Its interiors display Indian architecture, with picture frames of popular temples and palaces located around Bangalore. Each of these carefully-selected pictures draws the guests attention to leave a lasting impression. It is here that the business traveler, the quintessential elite family on vacation or the industrial entrepreneur can savor the best in hospitality, quietly and unobtrusively. Air India Lounge, Domestic Departure

Figure 1.5 Launched in May 2009, the plush new Air India lounge at the Bengaluru International Airport Domestic Departure can accommodate 72 guests. This is one place where you, as a passenger of


the airline, can indulge in luxury, listen to the soothing sounds of a rippling water fall while sipping a chilled beverage, and wait for your flight. VVIP Terminal, Airside

Figure 1.6 At the airport extra care to ensure that VVIP guests receive easy access to their flights. The VVIP Terminal is strategically located next to the Passenger Terminal Building with a landside and airside interface to facilitate the movement of VVIPs from and to the airport. Occupants of this terminal are specified by the Government of India and accordingly given permission to utilize the terminal. A majority of guests at this terminal are also exempt from security frisking and have direct access to the airside and their aircrafts.

The building houses two chic contemporary lounges, a conference room and a State


Protocol office. It is well equipped with a screening facility for security officials, an in-house pantry, a restroom with shower facilities, flat screen television and reading material. The building has a lush lawn in the front and a car parking space for the VVIPs movement. There is also a provision for flag hoisting and parade areas to welcome important government dignitaries. The lounges within the building are built with the concept of creating formal meeting rooms where the VVIP can meet the media or people, talk, work and relax as on routine tours. The lounge interiors are vibrant and colorful, in line with a contemporary feel. Seating space for large groups is designed using various lounge seats and task seats. On 21 January 2011, a new VIP departure and arrival lounge was inaugurated. One lounge which is present at level one of the terminal will serve departing domestic and international dignitaries and the other on the ground floor will serve arriving dignitaries. Hospital Columbia Asia hospitals operates a 24/7 medical care unit and a pharmacy inside the passenger terminal to provide medical care for travelers and other occupants of the airport. It has the latest in medical equipment, technology and expertise to handle outdoor medical care and stabilize emergencies. In addition, along with its partners, Columbia Asia provides total medical assistance in coordinating any mass casualty event or a disaster.


Car parking Central Parking Services (CPS), a parking management company in India, provides state-of-theart car parking management and premium valet services at the airport. It also manages the curbside traffic at the airport. Aviation services Aviation fuel facility Sky tanking and Indian Oil operate the Fuel Farm and Hydrant System of the airport. A 36 kilometers (22 mi) fuel pipeline was commissioned in October 2009 by Indian Oil from Devanagonthi to the airport. The need of 80 tankers to ferry Aviation Turbine Fuel to the airport can be done away with the installation of these pipelines. Into - Plane fueling service Bharat Petroleum Corporation Limited (BPCL), ST Airport Services Pvt. Ltd. (STARS) and Indian Oil Sky tanking provide fuelling services at the airport. Ground handling Globe Ground India and Air India/ Singapore Air Terminal Services (SATS) provide ground handling services and procure the ground handling equipment required for operations. Flight catering Flight catering services are provided by LSG Sky Chefs and Taj SATS. Aircraft maintenance Bengaluru International Airport Limited (BIAL) has signed a pact with Air Works, a DGCA approved aviation service provider to carry out third party line maintenance (TPLM) services.


TPLM is a service by an external agency (other than an airline or airport) for aircraft maintenance. TPLM services could be supported by the MRO facility at Hosur. The facility is certified for Airbus A320, Boeing 737, ATR 42 and ATR 72 family of aircraft. Cargo village The cargo village was inaugurated on 9 December 2009. It houses 120 freight forwarders and 80 custom house agents and can accommodate parking of nearly 80 trucks. There are two cargo terminals in the village. One of the terminals is operated by Menzies Aviation Bobba Pvt Ltd. This terminal has an initial capacity to handle 150,000 metric tons of cargo. The other terminal is operated by Air India SATS Joint Venture consortium. This terminal has a two floor warehouse with a capacity of 200,000 metric tons. Expansion plan On 19 January 2010, BIAL embarked on expansion plan and fast tracked construction of a new state of the art terminal building.

The first phase of construction of the new terminal is expected to cater to passenger traffic of

about 15 million per year. There are also plans to expand the new terminal to cater to 36 million passengers per year.

There are also plans to expand the existing terminal to cater to 15 million passengers per


The expansion would also increase the number of check-in counters and the seating

capacity at the waiting areas. Once done, Terminal 1 would sport a brand new look and will be capable of handling the A380 aircraft.


At present there are a number of delays in arrival and departure of flights due to fog. To

reduce such delays, the runway has to be upgraded to Category III B. This up gradation would be done when a second runway will be constructed (along with Terminal 2). Connectivity: Proposed high speed rail link As the airport is 40 km outside the city, a new high-speed rail link has been approved to connect the city to the airport. The high speed rail link would be integrated with the Bangalore Metro and would cover a distance of 33 kilometers with four stations: Cubbon Road (Terminal Station), Hebbal, Yehalanka, and Bengaluru International Airport (Terminal Station). The project is expected to cost 6,900 crore (US$1.5 billion). Of the 6,900 crore (US$1.5 billion), the State Government would contribute 532 crore (US$115.44 million) (mainly for land

acquisition) while the Central Government would contribute 1,040 crore (US$225.68 million). The companies short-listed for this project are Pioneer Infratech Private Limited and Siemens Project Ventures, Lanco Infratech Private Limited and OHL Concessions S.L., L&T Transco Limited, Reliance Infrastructure and CSR Nanjing Rolling Stock Company Limited, and ITDITD Cem-Soma Enterprises Joint Ventures. The fare would be 200 (US$4.34) from M.G. Road, 150 (US$3.26) from Hebbal and 100 (US$2.17) from Yelahanka. Air link Charter helicopter services are available from Electronics city, Whitefield, HAL Airport and Mysore to BIA. These services are being provided by Birdie and Deccan Air.


Awards and honors

Even though there was an economic slowdown, BIA managed to keep its traffic base and

route network stable. It was hence awarded The Routes Asia Airport Marketing Award chosen among five other airports in the Indian sub-continent.

At the Emerging Markets Airports Awards 2010, held in Dubai, BIA was awarded The

Best Emerging Airport in Indian sub-continent.

Received a platinum certification from IATA in January 2010 for becoming The first

airport in India to be 100% Bar Coded Boarding Passes (BCBP) compliant.

At the CNBC AWAAZ Travel Awards 2010 held at Delhi, BIA was awarded The Best

Managed Airport in India.






1) Are you a passenger, accompanying person or casual visitor to the airport? a) Passenger Table 2.1: Are you a passenger, accompanying person or casual visitor to the airport? TYPE Passengers Accompanying the passenger Casual visitor NO. OF RESPONDENTS 28 59 13 b) accompanying the passenger c) casual visitor

INTERPRETATION: Among 100 customers 28 are passengers, 59 are persons accompanying the passengers and 13 are casual visitors to the airport.So out of 100 persons 72 are potential customers of the airports landside retail.


2) Why did you accompany the passenger? a) This is the passengers first trip b) This has being the practice d) Outing for the family Table 2.2: Why did you accompany the passenger? REASON This is the passengers first trip This has being the practice To see the airport Outing for the family NO. OF RESPONDENTS 05 45 13 37 c) To see the airport

INTERPRETATION: Among 100 persons 50 persons came to the airport for the sake of visiting the airport alone.


3) How was your experience at the airport? a) Excellent Table 2.3: How was your experience at the airport? LEVEL Excellent Good Bad NO. OF RESPONDENTS 48 44 08 b) Good c) Bad

INTERPRETIATON: With 92 % of the respondents giving thumbs up, the airport is in the right track as far the customer experience goes.


4) What pleased you the most at the airport? a) Huge size of the airport c) Comfort facilities Table 2.4: What pleased you the most at the airport? FACILITY Huge size of the airport Food & Beverages Comfort facilities All None NO. OF RESPONDENTS 0 0 0 100 0 b) Food & Beverages d) All e) None

INTERPRETATIONS: With 100% of the respondents giving full marks for the infrastructure and facilities its a winwin situation for the airport in respect to the expansion plans.


5) How do you rate the pricing of the food and beverages items available at the airport? a) Costly Table 2.5: How do you rate the pricing of the food and beverages items available at the airport? RATING Costly Affordable Cheap NO. OF RESPONDENTS 24 76 0 b) Affordable c) Cheap

INTERPRETATION: With 76 % of the respondents saying that the pricing is affordable there is no worry regarding the premium pricing for the products.


6) Are you satisfied with the facilities at the airport? a) Satisfactory Table 2.6: Are you satisfied with the facilities at the airport? RATING Satisfactory Not satisfactory NO. OF RESPONDENTS 76 24 b) Not satisfactory

INTERPRETATION: With 76% of the respondents expressing their satisfaction, the airport is in the right track as far as customer satisfaction is concerned.


7) What facility according to you can be improved at the airport? a) Drinking water Table 2.7: What facility according to you can be improved at the airport? FACILITY Drinking water Toilets Seating arrangements Guides NO. OF RESPONDENTS 56 84 74 06 b) Toilets c) Seating arrangements d) Guides

INTERPRETATION: A majority of the respondents asking for the seating, drinking water and toilet facilities to be improved the airport operator has to take a positive approach regarding this unmindful of the expenditure involved.


8) How will you like to spend time with your family and friends at the airport? a)Shopping b)Sight seeing c)Relax in a park like setup

d)See-off and return immediately Table 2.8: How will you like to spend time with your family and friends at the airport? ACTIVITY Shopping Sight seeing Relax in a park like setup See-off and return immediately NO. OF RESPONDENTS 33 12 40 05

INTERPRETATION: Only 05 persons would like to return back immediately which shows given the right facilities people are ready to spend quality time with their family at the airport.


9) What new concept would you like to see at the airport in the future? a)Shopping mall d)Exhibition Table 2.9: What new concept would you like to see at the airport in the future? TYPE Shopping mall Multiplex Theme park Exhibition All of these NO. OF RESPONDENTS 22 24 08 02 44 b)Multiplex e)All of these c)Theme park

INTERPRETATION: With most respondents wishing to see a shoppingmall, multiplex at the airport there is a bright chance for retail in a big way at the airport.


10) Would you avail of these value additions even if the price is more than in other places? a) Yes Table 2.10: Would you avail of these value additions even if the price is more than in other places? ANSWER Yes No Maybe NO. OF RESPONDENTS 74 04 22 b) No c) Maybe

INTERPRETATION: With a majority of the people willing to spend that extra for good service revenue from the new projects will not be a problem.


11. Would you visit the airport even if no one among you is travelling that is, visit the airport for its added attraction? a) Yes Table 2.11: Would you visit the airport even if no one among you is travelling that is, visit the airport for its added attraction? ANSWER Yes No Maybe NO. OF RESPONDENTS 64 16 20 b) No c) Maybe

INTERPRETATION: Given the right atmosphere and products respondents are ready to consider airport as alternate destination for weekend outing etc.






On the basis of the theoretical information and data gathered by administering schedule to customer which is analyzed, the following observations are made: Bangalore International Airport is Bangalores pride and a landmark the Bangaloreans are proud of. Being a first point of contact to the arriving passengers it has being successful in generating a positive image of this city of being warm, welcoming and tech savvy. Being an airport, the revenue from the aeronautical charges depends upon the aircraft movements at the airport. The pattern of air travel is directly dependent on the economy of the country and the revenue generated in an airport is not always guaranteed. The idea of an aerotropolis is acceptable to the non flying customers. The customers are comfortable with the idea of airport becoming their shopping and leisure destination. They are ready to pay more than the prevailing rates for the goods accepting the fact that the airport premises comes at premium. The facilities can be used both by the traveler and non flying customers.






After taking account the customers feedback and airport performance and looking at the recent trends in airport worldwide airports can not only survive but also earn a neat profit by evolving and innovating itself. We can draw the following conclusion: Those who travel by air will keep doing so and most of them are accompanied to the airport by their relatives or friends. With boarding gates closing half an hour before flight and check-in starting two hours before flight people arrive at the airport at least three hours before flight. So people have at least one to two hour free time at the airport. People prefer to spend quality time with their relatives, friends by shopping, eating or talking in a relaxed, informal setup with F&B at arms length. With reasonable pricing and good packaging people will prefer airport as a weekend spot with airplanes flying around as bonus. People dont mind paying a premium for the facilities. People would not only spend on F&B,but also on luxury items,sightseeing,exhibitions, theme park etc. People like the concept of an airport as an alternate destination for fun and frolic.






People are ready to accept airport as a good fun and frolic destination. So the landside should be developed keeping that in focus. People are ready to pay a premium, so the rates need not be compromised.Morever they are already paying a premium at multiplexes, railway station, shopping malls, boutique etc for the products. With Nandi Hills near the airport and residential projects by big ticket developers planned, an aerotroplis is an ideal concept which is sure to succeed. With Govt planning SEZs and developing Nandi Hills as a major tourist attraction the aerotropolis will have a first mover advantage over others. Some of the suggestions are: A large centrally air-conditioned convention center with a flexible arrangement to

accommodate a group of 5 persons to 5000 persons fitted with top end AV system, Wi-Fi connectivity and secretarial facilities. A spa with quick fix solutions for relaxation and rejuvenation nearby or attached to the

convention centre. These can be situated close to the terminal with connectivity by electric or battery

operated vehicles like golf cart, car or vans. A two tier shopping mall outsourced to a retail giant like Mark&Spencer, Wal-Mart or

Big bazaar. A water theme park or bird safari on the lines of Singapore Sentosa islands or Dubai

managed by experts. A cinema multiplex with flexible arrangement for hosting events like film festival, art

festivals or other cultural events. An open stadia to conduct mini sports event like motocross, exhibitions etc.


A miniature golf course on the line of Hong Kong airport managed by experts to cater to

the business class passengers. Small units of dwelling like for bachelors and small families for limited period which

can be outsourced to hospitality group. This is apart from the 5 star hotel already present. them. Airport should not collect rent for these properties, but should participate in a profit All these above mentioned development will also present a good ad revenue around

sharing pattern. This will give the concessionaires operating flexibility and freedom to conduct business without bothering about the monthly rent. Airport should not operate any of the above mentioned projects but leave it to the

experts. All properties to be given out on short lease only, so that both parties will have the

flexibility of changing the contract if not making profit. A clause of termination on prior and mutual notice to be included so that both parties can

operate flexibly.





1. 2. 3. 4. 5. 6. 7.

Briefing of ICAO Council on airport business and economics, Angela Gittens, ACI world. Director General, Declan Collier, CEO Dublin Airport Authority, pp.81 86,125 - 127. P.S.Senguttavan, Principles of Airport Economics, Excel books, pp.6 9, 14 18, 131- 138. The Economic and Social Impact of Airports, September 2007, Airports Operators Association, York Aviation LLP. 1st Annual Airport Revenue Conference, Eliot Lees, VicePresident, SH&E International Air and Transport Consultancy.






: : :


1) Are you a passenger, accompanying person or casual visitor to the airport? a) Passenger b) accompanying the passenger c) casual visitor

2) Why did you accompany the passenger? a) This is the passengers first trip b) This has being the practice d) Outing for the family 3) How was your experience at the airport? a) Excellent b) Good c) Bad c) To see the airport

4) What pleased you the most at the airport? a) Huge size of the airport c) Comfort facilities b) Food & Beverages d) All e) None

5) How do you rate the pricing of the food and beverages items available at the airport? a) Costly b) Affordable c) Cheap

6) Are you satisfied with the facilities at the airport? a) Satisfactory b) Not satisfactory


7) What facility according to you can be improved at the airport? a) Drinking water b) Toilets c) Seating arrangements d) Guides

8) How will you like to spend time with your family and friends at the airport? a)Shopping b)Sight seeing c)Relax in a park like setup

d)See-off and return immediately 9) What new concept would you like to see at the airport in the future? a)Shopping mall d)Exhibition b)Multiplex e)All of these c)Theme park

10) Would you avail of these value additions even if the price is more than in other places? a) Yes b) No c) Maybe

11)Would you visit the airport even if no one among you is travelling that is, visit the airport for its added attraction? a) Yes b) No c) Maybe