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Noida Airport will complement IGI: Daniel Bircher, CEO, Zurich Airport Asia

The chief executive says Zurich Airport International is bullish on Uttar Pradesh as a investor and developer and is not ruling out a partnership with a strategic investor at a later stage. We consider four factors important — offering peak hour slots; Noida’s proximity to eastern, north-eastern areas of NCR as well as Uttar Pradesh, says Daniel Bircher.

, ET Bureau|
Last Updated: Dec 07, 2019, 06.47 AM IST|Original: Dec 07, 2019, 06.47 AM IST
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In pic: Daniel Bircher, CEO, Zurich Airport Asia
Daniel Bircher, chief executive of Zurich Airport Asia, spoke to ET from Kuala Lumpur on the Zurich Airport AG’s successful bid for the Noida International Airport. Edited excerpts...

How do you see the prospects of business and traffic at the Noida International Airport?
We see a potential growth of air travel beyond 200 million passengers for the metropolitan Area of Delhi by the end of the concession period in 2060. For Noida International Airport, we see a development range between 50 and 80 million passengers until the end of the concession. The airport is located strategically between Delhi and Agra, close to the fast-developing Noida and Greater Noida area.

For success of Noida airport, road connectivity has to be executed as planned and the Metro must be extended to the airport. Apart from the land connectivity, the treatment of Noida International airport as equivalent to IGI Delhi International Airport is extremely important — thus traffic rights and airspace management are two important aspects that need to be applied for the whole NCR area.

If we look at large metropolitan areas worldwide, we see that second airports become viable once the primary airport reaches a level of about 35 million passengers. We see Noida International Airport as complementary to IGI Delhi International Airport.

Which aspects of your experience from Zurich Airport do you plan to incorporate in the Noida Airport?
Zurich Airport has been ranked top by the World Travel Award, the Skytrax Award, ACI ASQ Award and the Air Cargo Excellence Award over the past 10 years. We see this as a result of our well-functioning processes and passenger flows, our focus on passenger services, our dedication to have a clean, lean and efficient airport with Swissness. Our investment in Kempegowda international Airport (Bengaluru), Belo Horizonte International Airport and Floripa Airport (Brazil) and Bogota Eldorado Airport (Colombia) has resulted in excellent customer feedback and satisfaction. Our aim is to develop and manage an efficient, user-friendly and sustainable Indian airport. Passengers will see, feel and experience Uttar Pradesh as well as India, be it in its architecture, its service culture and its products and services (food, beverage, retail, entertainment) and by its local operating team.

How realistic are the targets (2023) for construction and start operations at Noida International Airport?
We consider timelines as very ambitious, but they are achievable. The Bengaluru Airport did not take even three years. We need a couple of approvals to come through from the authorities. Another factor is the land acquisition which we believe isn’t complete yet. We will sit with the Noida International Airport Authority and discuss our project plan to ensure that all the planning and construction steps are thoroughly coordinated with the land acquisition process as well as with the construction of the airport access roads and other enabling works. Zurich Airport has delivered recently two terminals in Brazil in record time; we are used to working with tight timelines.

Your bid of above Rs 400 per passenger is considered aggressive, mainly due to the fact that there is a competing airport and that will always remain the main airport for Delhi. What is your justification for this 'aggressive' bid?
There are several factors that determine your final proposal for a concession. We are convinced about the Indian growth story and are willing to contribute to the government’s plan to create a $5 trillion economy. Disposable income, propensity to travel, economic and city side development in catchment areas and expected growth in air travel are some factors that form the basis of our proposal. We are convinced that Delhi, as one of the largest metropolitan areas, requires additional airport capacity.

How difficult will it be to get business from an established airport like Delhi?
We consider four main factors as important. First, the available peak hour slots at Delhi International Airport are limited, thus, airlines that want and need to operate during such peak hours will naturally look for ways to find airport slots. Second, Noida offers a natural catchment area for the eastern, north-eastern areas of NCR as well as significant parts of Uttar Pradesh between Delhi. These locations will be significantly closer to the new airport and more convenient for passengers. Third, if both airports operate on level playing fields with respect to traffic rights for international flights, airspace utilisations, provisions of government resources such as immigration, Customs and security personnel, the Noida airport will be able to offer very competitive process and quick and easy access. Lastly, with the new capacity available, the airport will be able to support mid-term growth of an anchor carrier. This might be a crucial decision for airlines given the significant number of aircraft orders that have been placed by Indian carriers in recent months.

Will the company implement the whole project solely or are you looking at or open to partners for the project?
Zurich Airport has been able to show its capability with the greenfield project in Bangalore. We are currently operating 9 airports and have the necessary expertise and commitment for Noida International Airport. In view of our overall strategy to operate a portfolio of airports in Asia, we are not ruling out a partnership with a strategic investor at a later stage.

Are you open to taking GMR as an Indian partner?
We haven’t really decided on the issue of a partner. There are many opportunities there, we have to first set up the concessionaire and then see if we go for an Indian or a foreign partner.

For the first phase, which is estimated to cost Rs 4,588 crore, what is going to be your debt/equity ratio?
As this is a greenfield airport, we are looking at debt/equity ratio in line with financial leverage available for airport projects in India.

In terms of borrowings, would the company be looking at domestic or foreign funds?
Whereas cost of debt on the international financial market is considerably lower, we prefer to do our project financing in Indian currency. Majority of the airports revenues will be in Indian rupee.
With the recent reform that the government has initiated for the banking sector ensuring liquidity in the market, we are confident that we will be able to achieve favourable financial conditions for this project. We are sure that our companies’ AA- credit rating and financial stability would support this as well.

Uttar Pradesh has traditionally not been seen investor-friendly, and there have been law and order issues? Do you have any such fears?
We are confident that we will establish a prosperous and genuine partnership with the state administration. It is an honour to invest and contribute to the development of the Uttar Pradesh economy and the Indian aviation system, and we are looking forward to creating a win-win situation for Uttar Pradesh and for Zurich Airport International as an investor and developer. I am looking forward to being able to create employment opportunities for many young talents at Noida International Airport.

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Noida Airport will complement IGI: Daniel Bircher, CEO, Zurich Airport Asia

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