working of cial - a reservoir of indian theses @...
TRANSCRIPT
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Chapter 2
WORKING OF CIAL
Cochin International Airport Limited (CIAL) is the first Greenfield
airport setup in the Public Private Partnership (PPP) model in civil aviation
infrastructure sector in India. This is the first international airport in India
to be built with only a minority (26%) State and Central Government stake
in a public-private partnership (PPP) project.1 Cochin International Airport
has the state-of-the-art facilities and traditionally designed architecture unique
to Kerala , and has been constructed to enable any type of wide-bodied
aircraft to land or take off with the least of hassles. CIAL is the natural
outcome of the liberalisation process initiated by the Government of India
and the enthusiasm and support the people have showered upon this project
surely makes i t a people’s project and one of the biggest success stories
of democratic India.
2 . 1 HISTORICAL PERSPECTIVE
The existing Cochin Airport is an airfield belonging to the Indian
1. CIAL, Personnel and Administration File No. CIAL/PA-34 B.
12
Navy. It is suitable for operations of Boeing-737 aircraft. Ministry of Civil
Aviation, Airport Authority of India examined in detail the feasibil i ty of
expanding the existing naval airport for over two decades. After examining
all factors, it was found to be naviable as it was both time consuming and
cost intensive due to land reclamation from sea, change of runway orientation
for avoiding the obstructions, diversion of railway etc. The construction of
a new airport at a new location was an ideal solution with respect
to safety, economy and time considerations. An expert team of Director
General of Civi l Aviat ion (DGCA) and Airport Authori ty of India
officials inspected the sites and found the site at Nedumbassery, 25 kilometres
away from the ci ty and 30 ki lometres North East of the old ai rport as
most suitable for construction of an international airport. This project of a
new airport for Cochin was envisaged to overcome the operat ional short
comings of the then existing naval airport which was the only alternative
to meet the growing needs of Non-resident Indian travellers, tourists, trade
and commerce.
Figure 2.1: Outside View of Cochin Airport
Source: CIAL
13
To construct and run the airport in the preliminary project report,
it was suggested to register a society under the Travancore Cochin Literary
Scientif ic and Chari table Societ ies Registrat ion Act 1955. The means of
finance proposed in the preliminary study was by accepting interest free
loans from NRIs, donations from major industrial undertakings, small scale
units, exporters and loan from State Government. Government of Kerala
vide G.O.No.42/93/PW&T dt .19/5/93 accorded sanct ion for the proposed
airport project and for registering a society for implementing the project.2
A society under the name and s tyle Kochi Internat ional Airport Society
under the chairmanship of the honourable chief minister was registered under
registration certificate No.ER/311/93 dt.9.7.1993. 3 In the second meeting
of the governing body of the Kochi International Airport Society held on
10th January 1994 it was decided to incorporate a Public Limited Company
for the construction and maintenance of the proposed airport with Kochi
International Airport Society as the chief promoter. In line with the above
decision Public Limited Company under the name and style CIAL was registered
on 30/3/94 with an authorised capital of Rs.90 crores.
KITCO was entrusted with the task of preparation of a detailed
project report and i t was submit ted in August 1994. The project cost of
Rs.288.61 crores is f inanced by an equi ty of Rs.137.82 crores and term
loan of Rs.150.79 crores. The Government of Kerala and State Government
Undertakings are jointly investing 51 percent of the equity and SBT, Federal
Bank, BPCL, Air India , NRIs and Publ ic , have invested the balance 49
2. CIAL, Personnel and Administration File No. CIAL/PA -34 D.
3. Ibid.
14
percent of the equity. HUDCO, SBT and Federal Bank have provided the
term loan of Rs.140 Crores. BPCL has installed a fuel hydrant system in
the airport for refuelling the aircrafts. Air India has been retained as the
agency to provide Ground Handling Service at this airport . An extent of
1300 acres of land has been acquired for the construct ion of the airport
from around 2600 landowners and rehabilitating 822 families.4
The foundation stone for the project was laid by the honourable
chief minis ter Shri . K. Karunakaran on 21-8-1994. The project is being
implemented in two phases . Phase 1 was completed in a per iod of four
years i .e. between 10th March 1995 and 19th April 1999.5 The Airport was
formally inaugurated by the Honourable President of India, late Dr.K.R.Narayanan
on 25 th May and the f i rs t inaugural f l ight of Air India took off on 10th
June 1999. The f i rs t domest ic f l ight landed at this Airport on 30-06-
1999. Domestic operation from naval airport was shifted on 1st July 1999.
On the 12th of June 2000, Honourable Minister for Civil Aviation, Government
of India, declared this Airport as an international Airport. This has paved
the way for the introduction of international flights to and from this airport,
operated by M/s. Air-India and Indian Airlines, which are India’s premier
Public Sector Airlines.
4. Deshabhimani Supplement, May 25, 1999, P.6.
5. CIAL, Personnel and Administration File No.CIAL/PA/30D/IA-12.
15
Over 10,000 shareholders from 30 countries have invested in
the project with a hope to reduce travel cost and time apart from inconvenience.6
The thirty countries hosting the NRIs are the following.
Table 2.1: Countries host ing the NRIs
1. Australia 9. Switzerland 17. Emirates 25.Indonesia
2. Egypt 10. Brunei 18. Botswana 26.United Arab
3. Japan 11. USA 19. Uganda 27.South Africa
4. Mexico 12. Italy 20. Kuwait 28.Malaysia
5. Sweden 13. Iran 21. Bahrain 29.Singapore
6. Germany 14. UK 22. Oman 30.Saudi Arabia
7. Austria 15. India 23. Nigeria
8. Canada 16. Qatar 24. Kenya
Source: Malayala Manorama, May 25, 1999, P. 1.
In three years, Cochin Airport earned the distinction of one of
the finest airports in the country and bagged the National Tourism Award
for the best international airport for the year 2002.7 The construction work
of second phase was s tar ted on Feb. 10 th 2004. In the second phase
Taxiway, Apron for Airbus 380, expansion of international and domestic
terminals, Radar, new duty free shop, separate cargo building, new airline
6. Ibid.
7. Touriststatistics 2005, Department of Tourism, Govt. of Kerala, P. 20.
16
building etc shall be undertaken. Among these work of new airline buildings,
expansion of international terminal, modification of domestic terminal and
work of taxiway has been completed. The estimated cost of the project is
Rs. 150crores . 8
Cochin is strategically located in the international air map. Three
major international air routes that intersect near Cochin are the following.9
Mumbai - Colombo Air route
Mumbai - Trivandrum Air route
Abu Dhabi - Colombo Air route
The Cochin Airport is equipped with al l the operat ional and
technical requirements suitable for the heaviest aircraft that is being operated
in the world namely Boeing-747 Jumbo Jet. Cochin is currently one of the
few Indian airports besides been Mumbai, Delhi, Chennai, Bangalore and
Hyderabad which is capable of handling the Airbus A 380.10 Around 1300
acres of land was acquired for the a i rport and the a i rport has
been constructed with facilities matching international standards. The first
green f ie ld joint sector a i rport has completed nine years of commercial
operat ion and during this short per iod, i t has earned the dis t inct ion of
being the fourth busiest airports in the country. Other three airports ahead
of Cochin are Mumbai, Delhi and Chennai.11
8. CIAL, File No. CIAL/PA/30D/IB-17
9. Malayala Manorama, May 25, 1999, P. 2.
10. V.G.Gireesh , “Growth of CIAL” ,India Today, September 29, 2004, P.20.
11. Varkey,Biju and Raghuram G., “Governance Issues in Airport Development: Learning fromCIAL”, Integrated Transport, 2004.
17
Source: www.cochin-airport.com
2.1.1 General Features
The airport has excellent market prospects owing to its unique
location. It is located at latitude of 10009’08 North and longitude of 76024’29
East in the geographical centre of Kerala.
Figure 2.2: Location
2.1.2 Easily accessibility to Cochin Airport is another important feature
of CIAL. The airport has full range of multimodal transport linkages namely
the National Highway, Seaport, Railways etc. The Airport site is very close
and centrally located to all the three National Highways passing through
Kerala . I t is four ki lometres from the main highways of Kerala namely,
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National Highway - 47 and National Highway -17. More over the prestigious
Main Central Road of Kerala, which is the major State Highway, is hardly
4 kilometres from the airport. Further the main Railway Line from Trivandrum
to Mangalore is adjacent to the airport and it is situated between Alwaye
and Angamaly Railway Stations. The Cochin Seaport one of the biggest in
the country is also situated close by. The Cochin Port Trust is developing
an International Container Terminal at Vallarpadam near Cochin .All these
factors make this airport an easy place to reach.
2.1.3 CIAL is also centrally located to important tourist and pilgrim
centres . This has a t t racted touris ts f rom different par ts of the country.
Important tourist spots are Cherai Beach, Athirampally Water Falls, Thattekkad
Bird Sanctuary, Kumarakam Back Waters and Periyar Wild Life Sanctuary,
Thekkady etc.
2.1.4 Important pilgrim centres are also located close to the airport.
Kalady the birthplace of Adi Sankara, St.Thomas Church Malayattoor and
Krishna Temple Guruvayoor etc. Thus, Cochin Airport would certainly boost
international trade, tourism and enhance the image of the country.
2.1.2 Technica l Features
The airport is equipped with all the operational and technical
requirements suitable for the heaviest aircraft that is being operated in the
world namely Boeing- 747 Jumbo Jet. Other types of aircraft handled at
Cochin Internat ional Airport , include: Airbus 380, Super Jumbo, Airbus
300, Airbus 310, Airbus 320, Boeing 737-800, Boeing 777, Airbus 330-
200, Airbus 340 etc.
19
The technical features of CIAL are the following
2.1 .2 .1 The runway of the CIAL is 3400 metres long, 45 metres wide
and shoulder width of 7.5 metre on both sides. This is the second largest
airport in India with Instrument Landing system. The f irst place goes to
Delhi. Runway is a paved path used for take off and landing the aircraft.
Runway ends are usually finished with a concrete surface where it is less
affected by Jet effects and fuel dripping. The runway of CIAL is aligned
East-West . Al l coastal runways are a l igned so, s ince the a i rcraf t has to
land against the wind. For measuring visibility, during bad weather Electronic
Automatic Visual Range Equipment is installed.
Figure 2.3: Runway
Source : Ibid
20
Source : Ibid
12. CIAL, Personnel and Administration File No. CIAL/PA/30D/IB.5
13. Praveen.M.P, “One More Budget carrier from Cochin”, The Hindu, Wednesday, July11, 2007,P.5.
It took three and half years to complete the runway and the project expense
of the runway is Rs.72 Crores . 12 In the proposed phase II , the runway
will be extended by 300 metres to make a total length of 3700 metres.
2.1 .2 .2 Another important feature is the two link taxiways connecting
the runway. A special ly prepared area or marked path on an aerodrome
for the use of taxing aircraft is called taxiways. This taxi track is about
930 metres long along with sui table l ink taxi t racks, connect ing to the
apron 13. In the phase I I a paral le l taxiway for the ent i re length of the
runway with high-speed link taxiways between runway and parallel taxiway
has been completed .
Figure 2.4: Taxiway
21
2.1.2.3. Another technical feature of CIAL is a i rcraf t parking s tand
called Apron. It is a defined area on a land aerodrome intended to accommodate
aircraft for the purpose of loading or unloading passengers or cargo refuelling,
parking or maintenance. Only one apron of s ize 492 metre x 125 metre
with a PCN, value of 65/R/B/W/T (Rigid/bearing/Tyre Pressure/Technical
evaluat ion) is provided for al l a ircrafts namely internat ional f l ights ,
domestic flights and cargo flights.14 The apron has nine stands to accommodate
f ive wide bodied aircraf ts and four narrow bodied aircraf ts . At present ,
the airport has enough parking stands to accommodate eight aircrafts at a
t ime including four wide-bodied aircraft . In the IInd phase of the project
the area will be extended to accommodate 12 aircrafts at a t ime.
Figure 2.5: Apron
Source: www.cochin-airport.com
14. Macdonald David, “Cochin International Airport a Success Story”, Airports International,Vol.1, No.2, September 2008, P.19.
22
2.1 .2 .4 The airport is being equipped with ground lighting facilities for
24-hour operations. The Category I Runway Lighting System is arranged
along the edge of a runway. This system facil i tates all weather landings.
Aeronautical approach lights indicate a desired line of approach to runway.
2.1 .2 .5 A class I Aviation Meterological office that caters to all meterological
needsof domestic and international flights is operating in CIAL. It keeps
cont inuous watch of weather over the airport and i ts vicini ty, record of
hourly half - hourly weather observations and issues meterological reports
regarding trend forecast indicating expected weather at the airport for two
hours, rout ine terminal aerodrome forecasts , la test weather information
pertaining to route, issuing airfield warning whenever hazardous weather
is anticipated over the airfield
Figure 2.6: Wind Soak
Source: www.aai/airport.com
23
2.1 .2 .6 Precision Approach Path Indicators (PAPI) are being provided
at both ends of the runway. This is intended to assist a pilot to maintain a
correct path to achieve a safe landing in all weather conditions both day
and night.
2.1 .2 .7 A separate Isolat ion Parking Bay for parking aircrafts under
bomb threat, unlawful interference and mobile lighting system for illuminating
the area is also provided in the airport.
2.1 .2 .8 CIAL has installed Category I of the Instrument Landing System.
With the help of Instrument Landing System aircraft operat ions is made
possible even in extreme foggy condition up to a visibility of 200 metres.15
The main components of Instrument Landing System are a) Localiser Beacon,
which gives control path guidance to the pi lot . b) Glide Slope Antenna
giving glide angle information of which aircraft has to fly in order to affect
safe touch down along c) Distance Measuring Equipment enables pilot to
know distance of touch down.
2.1 .2 .9 CIAL has well equipped facilities to tackle emergency requirements
of passengers, buildings and aircrafts. The Airport Rescue and Fire Fighting
Service (ARFFS) of Cochin Internat ional Airport commenced operat ions
on 25 th May 1999 with Category-8 level of protect ion to accommodate
larger flights. From 1st July 2005 onwards the level of protection provided
at this airport has been upgraded to Category -9, as per ICAO standard.16
15. CIAL, Personnel and Administration File No. CIAL/PA/30D/IB/2.
16. CIAL, Personnel and Administration File No. CIAL/PA/30D/IB/ 8.
24
Source: www.cochin-airport .com
The Fire Stat ion is located on the eastern s ide of Air Traff ic Control
Tower about 500 metres away from the middle of Runway, providing equal
response times to either end of the Runway.
The station is equipped with four Airfield Crash Fire Tenders
(ACFT) and one Rapid Intervention Vehicle (RIV) all imported from Rosenbauer,
Austr ia . Out of these one ACFT has been provided as s tandby to cover
maintenance activities. The major ACFT has a capacity of 9000 litres water
and 1080 l i t res foam compound. The other ACFTs have water tank of
6500 l i tres capacity and foam compound tank of 800 l i tres capacity. The
RIV has 2400 litres of water tank capacity and 300 litres foam compound
tank capaci ty. The vehicles are wel l equipped with long-range monitors
and fire fighting equipments. Rescue equipments like Breathing Apparatus
Sets , Fire Proximity Sui ts , Hydraul ic Rescue Tools , Power Saw etc are
also provided. The vehicles are fitted with Radio Tele Type [RTT] communication
system and public address facility.
Figure 2.7: Airport Rescue and Fire Fighting Service
25
2.1.2 .9 .1 Watch Tower and Fire Control Room
Watch Tower is the nerve centre that keeps continuous watch
of apron and aircraft movement areas and alerts the fire crew for turnout
incase of an incident. The communication facilities like AM Radio and Hot
line with ATC are provided in the Watch Tower. Both crash bell and fire
siren alarm arrangements exist for alerting the fire crew from ATC tower
or Fire Stat ion watchtower, as the case may be. The Fire control room
receives all emergency calls and mobilises fire appliances for dispatching
to s i te and coordinate for augmentat ion as per the Airport’s es tabl ished
Emergency Plan.
2.1.2.10 Another important feature of CIAL is that Bharath Petroleum
Corporat ion Limited (BPCL) India’s second largest company has erected
hydrant pumps for fuel l ing at a cost of Rs.25 crores . With the help of
hydrant pumps, it is possible to fuel 6000 litres in a minute. However, in
a tanker it is possible to pump only 1000 litres in a minute. In India, this
facility is available only in Mumbai and Delhi. 17
2.1.2.11 Cochin International Aviation Services Limited (CIASL) is a
subsidiary of Cochin International Airport Limited, established on 8th September
2005 under Companies Act , 1956. 18 CIASL has been establ ished for the
purpose of setting up a world class aircraft maintenance, repair and overhaul
(MRO) facil i ty clubbed with an Aviation Training Insti tute for imparting
17. CIAL, Personnel and Administration File No.CIAL/ PA/ 30D/ IA.17.
18. CIAL Annual Report 2006-2007, P.30.
26
training to Pilots, Cabin Crew, Engineers and Technicians for in-flight and
ground support, at Cochin International Airport, Nedumbassery. In the initial
phase, it is proposed to establish a twin hangar facility for narrow-bodied
aircrafts for line maintenance and major maintenance up to ‘C’ checks and
Aviation training institute for Aircraft Maintenance Technicians.
Figure 2.8: Aircraft Maintenance, Repair and Overhaul Facility
Source: www.cochin-airport.com
2.1.2.12 The fifty-metre tall Control Tower or Air Traffic Control Tower
[ATC] that is under the Airport Authori ty of India has a l l the modern
faci l i t ies for regulat ing f l ights . I t i s one of the ta l les t towers in India ,
27
Source: CIAL
which can handle the flights in a busy route.19ATC deals with the following
three functions namely, communication between aircrafts that are flying under
the specified air region and ATC, the particulars of airline billing, it include
aircraft landing fee, parking fee etc. and the matters relating to meterological
billing.
Figure 2.9: Air Traffic Control Tower
19. Malayala Manorama, Tuesday, May 25, 1999, P. 8.20. Varkey,Biju and Raghuram G., “Governance Issues in Airport Development: Learning from
CIAL”, Integrated Transport,2004.
28
2.1.3 Facilities in the Airport
2.1 .3 .1 Two separate spacious fully air-conditioned terminals for domestic
and international operations measuring a total area of around 4.5 lakh square
feet reflecting Kerala architecture and decorations with all modern passenger
amenities comparable to world-class standards are present. 20 International
terminal efficiently caters to a peak capacity of 1200 passengers per hour.
The arrival hall is located on the ground floor and is equipped to handle
peak hour capacity of 400 passengers. There are 23 immigration counters
at the arrival hall. The arrival hall has two conveyor belts with individual
flight indicators to alert passengers on their respective baggage. The departure
hall is equipped to handle a peak hour capacity of 800 passengers. International
terminal transit lounge has a capacity of 100 passengers. The transit area
caters to inter l ine t ransfer of t ransi t passengers . Some of the faci l i t ies
available at the Departure Hall include: Airline computerized Check-in Counters, Airline
Offices, Postal Service, STD/ISD Telephone Booths, Restaurant and Lounge,
Coffee Kiosks, Executive Lounge, Reserved Lounge, Baggage Scan, Currency
Exchange Bureau, Wait ing Room, Emigration and Customs, Customs and
Securi ty Check, Securi ty Hold and CIAL Terminal Manager ’s Off ice on
the Ground floor.
20. Varkey, Biju and Raghuram G., “Governance Issues in Airport Development: Learning fromCIAL”, Integrated Transport,2004.
29
Source: CIAL
Figure 2.10: International Terminal
2 .1 .3 .2 The Domestic Terminal Complex has exclusive arrival and departure
areas spread over a f loor area of 10,000 square metre, with a peak hour
passenger handling capacity of 800. All domestic flights are handled through
this complex. A large shopping complex consisting of 21 shops are situated
at this terminal . There are two conveyor bel ts in the arr ival hal l . The
arrival hall at the domestic terminal of Cochin International Airport is integrated
with travel-friendly facilities. Some of the facilities available at the arrival
hall are: Waiting Area, Baggage Claim, Prepaid Taxi (CIAL), Tourism Information
Centre, Touch Screen Kiosk (Kerala Tourism), Currency Exchange Bureau,
Hospitality Services Counters of CGH Earth Hotels, Abad Group of Hotels,
Taj Group of Hotels , Saj Hotels and Resorts and Sports Lakshadweep
Tourism, Offices of the Chief Airport Security Officer, Police Assistance
Counters, Coffee Kiosk, Public Conveniences, Fire Exit /Security etc.
30
Source: CIAL
Figure: 2.11 Domestic Terminal
The Domestic Departure Hall has a peak hour passenger handling
capaci ty of 800. The departure area has a spacious wai t ing area for the
convenience of passengers and accompanying persons. Airline check-in counters,
baggage screening, security check, airl ine offices, medical room, foreign
exchange services , restaurant and lounge, publ ic conveniences etc are a
few of the faci l i t ies avai lable for passengers at the Domest ic Departure
area.
2.1.3.3 CIAL has commenced duty free operations from May 2002
onwards. Shopping facil i t ies is spread over 14,000 square feet . Two duty
free shops at Cochin International Airport are located in the arrival section
of the international terminal. This is for the passengers arriving from other
destinations. The other shop is located in the departure area of the international
terminal. This shop is meant for the passengers flying from Cochin and a
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‘Last Minute’ Shop for people who always get to the gate a t the f inal
call. The duty free shop at CIAL has won the best India duty free retailers
of the year 2007-08 awards competing among 11 inter duty free shops in
the country.
Figure 2.12: Cochin Duty Free
Source: CIAL
The duty free shop is entrusted with Alpha Retai l of United
Kingdom. Sales revenue from duty free shop is one of the important foreign
exchange earners. The duty free business is fast proving to be the chief
money-spinner with respect to revenue growth at CIAL. For the year
2006-07 under review CIAL duty free recorded a turn over of US $ 7.23
mil l ion (Rs.32.5crores) as against a turn over of US $ 4.96 mil l ion
32
(Rs. 21.91 crores) for the previous year.21 Cochin Duty Free, the biggest
duty free shop in India has an average sale of $17000 nearly Rs.7 lakhs a
day. Sales activity is carried through three shops in CIAL in the international
terminal . All i tems sold are scanned with bar code reader and sales bi l l
are generated automatically. All required passenger data is collected from
passengers which also get printed on the sales bill. Payments from customers
are collected only in foreign currencies accepted by company bankers.
2.1 .3 .4 International Cargo operations at Cochin International Airport
commenced in October 1999. Cochin International Airport Limited (CIAL)
took over the cargo custodian functions from Air India on 1st December
2000 and s tar ted operat ions a t the newly constructed warehouse. The
internat ional cargo warehouse is spread across an area of 6000 square
metres and is wel l equipped to handle a l l types of export and import
cargo to var ious countr ies with the help of var ious agents and air l ines .
Import cargo includes unaccompanied baggage from various Gulf stations,
ship spares, chemicals and electronic/mechanical i tems, whereas exports
consist mainly of fruits, vegetables, garments, fabrics, spice products etc.
CIAL handles on an average 1500 metric tonnes of international cargo per
month.22 CIAL cargo handles international cargo for the following Airlines:
Indian Airlines, Air India, Jet Airways, Oman Air, Silk Air, Kuwait Airways,
Emirates Airways, Qatar Airways, Srilankan Airlines, Saudi Arabian Airlines,
Gulf Air and Air Sahara , operat ing through Cochin cargo areas . Cochin
Internat ional Airport has s tar ted handl ing Domest ic Cargo also from
21. CIAL Annual Report 2006-2007, P.6.
22. Kerala Calling, October 2004, P. 15.
33
Source: CIAL
1st February 2005, at the newly established Domestic Cargo Terminal. The
cargo complex is s i tuated less than half a ki lometre to the west of the
international terminal.
Figure2.13: CIAL Air Cargo
An area of about 80 acres of land has been earmarked for
cargo village. Cargo village at the airport serves as a gate for cargo exports
not only from Cochin but a lso adjoining areas l ike Coimbatore , Tripur,
Salem, Madurai e tc . A centre for perishable cargo is under construct ion
for which CIAL has received a hundred percent grant in aid by Agricultural
and Processed Food Products Export Development authority (APEDA), Government
of India.23
23. Morgan Stanley, J.M., “CIAL places Kerala in the International Airport Map”, SCMS, Journalof Indian Management, April- June 2005, P. 39-52.
34
Figure 2.14 : Domestic Cargo
Source: CIAL
The cargo warehouse at the a i rport is direct ly managed by
CIAL and the operations have shown excellent improvement in volumes.
Table 2.2 shows the details of cargo handled from 2004-2007.
35
Table 2.2: Cargo operations
Cargo Movement Quantity in tonnes
International Cargo Import Export
2004-05 5181.60 13092.70
2005-06 5589.80 12076.50
2006-07 4364 12647
Domestic Cargo Arrival Departure
2005-06 2405.60 1554.00
2006-07 2681.80 2239.70
Source: Annual Report CIAL 2005-06, 2006-07 P.10.
2.1.4 Regulatory Agencies in the airport
2 .1 .4 .1 Airport Authority of India
In advanced countries, Airport Authority of India (AAI) is responsible
for the operation of domestic and international terminal buildings, runways,
taxiways, parking bays, air traffic control etc. The communication, navigation,
survei l lance and air t raff ic management services is provided by Airport
Authority of India using most modern equipments like distance measuring
equipment, visual approach slope indicators, Category-1 instrument landing
system etc. Similar facilit ies at the Cochin Airport are carried out by Air
India as per which Air India has to pay the company at an agreed percentage
36
of their income (18.5 percentage) from ground handling services rendered
in the airport . 24
2.1 .4 .2 Bureau of Civil Aviation Security (BCAS)
BCAS is the regulatory authority for civil aviation security in
India. It is headed by an officer of the rank of Director General of Police
and is designated as Commissioner of Security Civil Aviation. Security arrangements
of the CIAL like any other airport is under the Central Industrial Security
Force (CISF) and Armed Force under the Government of India since 26 th
May 2000.25 The CISF unit at CIAL has been adjudged as the best security
wing in India. CIAL has become the f irs t airport in the country to have
army trained sniffer dogs as part of its bomb detection and disposal squad.
To cater to the securi ty requirements mult i energy colour x-ray baggage
systems have been installed. For registered baggage, this has a tunnel size
of 1 metre x 80 cm width 2-monitor colour and black and white . There
are also two hand baggage x-ray machines in both terminals with a tunnel
s ize of 6 metre x 40 cm. These monitors display organic and inorganic
materials including plastic explosives, narcotics, guns etc. Passenger frisking
hand held metal detectors are provided by CIAL to securi ty personals .
Entry to sterile hold area is through doorframe metal detectors again provided
by CIAL.
24. CIAL Annual Report, 2006-2007, P.28.
25. Praveen.M.P, “Airport’s bomb squad gets sniffer dogs”, The Hindu, 2007, P.5.
37
Figure 2.15: X-Ray Baggage Machine
Source: www.cochin-airport.com
2.1 .4 .3 Immigration
The immigration set up at the airport, works under Ministry of
Home Affairs. The immigration processing of passengers both in international
arrival and departure are regulated by Foreign Regional Registration Officer,
who is of the rank of Deputy Commissioner of Police. He is assisted by
Assistant Commissioner of Police. The process of immigration is controlled
by set of rules and regulations issued from time to time. Specific counters
are earmarked for foreigners and Indians to expedite the clearing process.
The health check is compounded with immigration check. The pre-immigration
area is furnished with facilities such as drinking water and public convenience.
There are 15 emigration counters available at departure and 23 immigration
counters at the arrival terminal.
38
Figure: 2.16 Emigration Counter
Source: CIAL
2.1 .4 .4 Customs
Central Board of Excise and Customs, a department of the
Ministry of Finance is the agency, which regulates the clearance of arriving
and departing international passengers through international terminal under
Customs Act , 1962. The commissioner of Customs, Customs House,
Cochin - 9 having jur isdict ion over the Cochin Internat ional Airport is
functioning from the office of the Joint Commissioner of Customs and Air
Customs. There are two main wings under Commissioner of Customs. Air
customs wing for clearance of passengers and baggages, Air Intel l igence
Unit for Anti-smuggling work, prosecution and Cofeposa cells. Air Cargo
complex for Import/Export of Commercial cargo /Unaccompanied Baggage
of Bonded warehouse, (at the airport ) Foreign Travel Tax and Inland Air
Travel Tax Units also fall under administrative jurisdiction of this commissioner.
39
Customs has provided green channel facility for passengers to walk through,
when they carry goods within permissible limit of free allowance. Separate
counters have been provided for clearing gold, silver, and dutiable goods
above the permissible limit of free allowance.
Figure 2.17: Customs (Green Channel Area)
Source: www.cochin-airport.com
40
Two Customs channels are available for arr iving, passengers
namely Red and Green Channels . 26 The Green channel is a lso cal led as
‘Walk through’ channel, through which arriving passengers without dutiable
i tems can walk through. The Red channel is earmarked for c learance of
passengers with dutiable items. There are ten Customs Counters at arrival
and five Customs Counters at departure, which include counters for currency
declaration, transfer of residence and crew.
All these facilities show that CIAL being centrally located that
too in the industrial capital of Kerala will prove to be the perfect solution
for the travelling public and tourists to reach various tourist destinations.
26. CIAL, Personnel and Administration File No. CIAL/PA.30D/IB-18.
41
Chart 2.1 : Airport Lay Out
1. Run way
2. Apron
3. Air Traff ic Control Tower
4. Cargo complex
5. Internat ional Terminal
6 . Domestic Terminal
7. Car parking
8. Car parking
9. BPCL
Source: CIAL
1
2
36
5
4 7
8
9
42
Chart 2.2: Organisational Chart
Source: CIAL
COCHIN INTERNATIONAL AIRPORT LIMITED
Managing Director
Board of Directors
Personnel andadministration
Cargo Finance Operations Commercial Secretarial
Communicationand Information
TechnologyCivil Electrical Duty Free
43
2.2 ADMINISTRATIVE SETUP
2.2.1 Board of Directors
The organisational chart of CIAL has a Board of Directors at
the top .The Cochin International Airport Limited is managed by a Board
of Directors consisting of Government Nominees, industrialists, Non-Residents
Indian’s and representatives of financial institutions. The Chairman of the
Board is the honourable Chief Minister of Kerala.
2.2.2 Departments
The Managing Director executes the affai rs of the company
through the line of managers of various departments. The functions of various
departments are the following.
2.2 .2 .1 Personnel and Administration Department
The main function of Personnel and Administration department
is to manage the human resources in the company. People are the main
subject matter of personnel department and its business is to educate employees,
manage to place high value on the dignity and work of the individual human
being. The functional chart of personnel and administration department is
as follows.
44
Chart 2.3: Functional Chart of Personnel and Administration Department
Important duties and responsibilities of Personnel and Administration
department are the following.
2.2.2 .1 .1 To evaluate the individuals performance and progress in a job
and assessing his or her performance. The scheme of formal
performance appraisal was introduced in the year 2001.
2.2.2 .1 .2 To deal with human resource information system. It gives various
details regarding the name, age, family background etc. of employees.
2.2.2 .1 .3 To establish desirable working relationship among the members
of the organisation.
General Manager
Manager
Deputy Manager
Senior Executive
Executive
Junior Executive
45
2.2.2 .1 .4 Issue salary certificates, paying allowances, provident fund, and
certif icate for the issue of pass all come under the personnel
department.
2.2.2 .1 .5 To administer various areas including documentation, vehicle records,
library, prepaid taxi services all are under the responsibility of
personnel department.
2.2 .2 .2 Cargo Department
Cargo operations at CIAL commenced in October 1999. CIAL
took over from Air India the cargo custodian functions on December 2000.
Cargo department consists of Senior Manager, Manager, Deputy Manager,
Assistant Manager, Supervisor, Executive and Junior Executive.
Chart 2.4: Functional Chart of Cargo Department
Senior Manager
Manager
Deputy Manager
Assistant Manager
Supervisor
Executive
Junior Executive
46
Important functions of cargo department are the following.
2.2.2 .2 .1 CIAL air cargo division is mainly concerned with the import
and export of cargo to various countries with the help of various
agents and airlines both domestic and international.
2.2.2 .2 .2 To col lect var ious charges l ike x-ray machine usage, charge
for export cargo, strapping charges for import, cargo handling
charges etc.
2.2.2 .2 .3 To prepare reports regarding segregation and discrepancy reports.
Segregation report contains all the details of the cargo received
as per each f l ight . Cargo discrepancy report contains detai ls
of the cargo received in the damage condition, flight handling
report, cargo arrival notice etc.
2.2 .2 .3 Finance Department
Money is the lifeblood of any business enterprise as it is required
to purchase machines, materials and to pay the wages and salaries of employees.
Finance department consists of General Manager, Manager, Deputy Manager,
Assistant Manager, Executive, and Junior Executive.
47
General Manager
Manager
Deputy Manager
Assistant Manager
Executive
Junior Executive
Chart 2.5: Functional Chart of Finance department
The finance department deals with the following aspects.
2.2.2 .3 .1 To collect revenues from operational income. Operational income
includes traffic revenue and non-traffic revenue. Traffic revenue
is landing fee, parking and housing fee, terminal-landing charges
etc. Non-traffic revenue are users fee, passenger service fee etc.
2.2.2 .3 .2 Payments and provisions to employees. They include salary and
allowances to staff, salary and allowances to managing director,
contribution to provident fund, bonus, gratuity etc.
2.2.2 .3 .3 To effect coordination between company and various financial
inst i tut ions l ike HUDCO, State Bank of Travancore, Federal
Bank etc.
2.2.2 .3 .4 To pay al l costs , charges and expenses incurred or sustained
by the company. Operational expenses include air traffic management
fee, meteorological expenses, safety and security expenses, repairs
and maintenance cost etc.
48
2.2.2 .3 .5 To verify the contract bi l ls and f i l l ing the annual returns of
tenders from contractors.
2.2 .2 .4 Fire Department
CIAL has well equipped facilities to tackle emergency requirements
of passengers, buildings and aircraft . Rescue and Fire Fighting Services
deal any emergency at the a i rport . This department consis ts of General
Manager, Deputy Manager, Superintendent, Fire Forman, Junior Fire Operator
cum Junior Technician.
Chart 2.6: Functional Chart of Fire Department
Main functions of this department are the following.
General Manager
Deputy Manager
Superintendent
Fire Forman
Junior Fire Operator cumJunior Technician
2.2.2 .4 .1 To maintain close coordination with air traffic control and other
operational agencies for effective functioning of the department.
2.2.2 .4 .2 To take appropria te posi t ion in the f i re tenders during each
landing and take off aircraft and conducting runway inspection
before each landing.
49
2.2.2 .4 .3 To organise periodic training for fire personnel at the fire training
centre of Airport Authority of India.
2.2.2 .4 .4 To maintain equipment and fire vehicles used in the airports.
Important equipments used in the fire station are fire tenders,
ambulances, breathing apparatuses etc. Important vehicles are
foam discharge range and rapid intervention vehicle.
2.2 .2 .5 Operations Department
The ent ire operat ions of the airport are under the control of
this department. Operations department consists of Airport Director, Manager,
Deputy Manager, Assistant Manager, Supervisor, Executive and Junior Executives.
The chart of operations section is as follows.
Chart 2.7 Functional Chart of Operations Department
Airport Director
Manager
Deputy Manager
Assistant Manager
Supervisor
Executive
Junior Executive
Important functions of this department are the following.
50
2.2.2 .5 .1 To effect coordination with all agencies operating at the airport.
Important agencies are Security Force, Customs, Meteorological
department etc.
2.2.2 .5 .2 Proper upkeep and maintenance of both international and domestic
terminals . The airport provides 24 hours house keeping and
conservancy services in the terminals.
2.2.2 .5 .3 Every passenger travelling through airport is a valued guest of
the company. To ensure bet ter faci l i t ies provided for airport
and passengers is another important function of this department.
2.2.2 .5 .4 Formation and coordination of different committees in the airport
namely Bomb threat committee, Environmental management committee,
Airport coordination committee for security etc.
2.2.2 .5 .5 To ensure that procedures are es tabl ished and resources are
provided for aviation security.
2.2 .2 .6 Commercial Department
All the revenue-earning activities of the airport are done with
the help of this department. Commercial department consists of Manager,
Supervisor, Executive and Junior Executive. The chart of commercial section
is as follows.
51
Chart 2.8: Functional Chart of Commercial Department
Manager
Supervisor
Executive
Junior Executive
Important duties of this department are the following.
2.2.2 .6 .1 To provide license for non- aeronautical services like car parking,
film shooting etc.
2.2.2 .6 .2 To purchase product range of goods needed for duty free shop.
2.2.2 .6 .3 To take up supply of weighing machines, fax machines, photocopies
required for the company.
2.2.2 .6 .4 To issue and purchase of fixed assets needed for the company.
2.2 .2 .7 Secretaria l Department
Another important department is the secretarial department. It
is functioning in Cochin at Marine Drive Complex. It consists of the Company
Secretary, Deputy Manager, Supervisor, Executive and Junior Executive.
52
Chart 2.9: Functional Chart of Secretarial Department
Company Secretary
Deputy Manager
Supervisor
This department deals with the following aspects.
2.2.2 .7 .1 To make a better liaison with Government and other financial
inst i tut ions l ike HUDCO, Federal Bank etc for joint working
or concession rate of interest from financial institutions.
2.2.2 .7 .2 To prepare and publish annual report of CIAL and ensure that
it contains complete financial performance of the company.
2.2.2 .7 .3 To conduct annual general meet ings and other meet ings and
discuss future expansion lay out and the new infrastructure facilities
proposed in the airport .
2.2.2 .7 .4 To issue shares on a right basis to share holders.
2.2 .2 .8 Civil Department
Another important administrative arm of CIAL is the civil department.
This department does a l l the important c ivi l works of the a i rport . The
chart of civil section consists of General Manager, Senior Manager, Manager,
Deputy Manager, Supervisor, Executive, Junior Executive.
53
Chart 2.10: Functional Chart of Civil Department
General Manager
Senior Manager
Manager
Deputy Manager
Supervisor
Executive
Junior Executive
Important functions of civil department are the following.
2.2.2 .8 .1 To construct, maintain or alter any building or works necessary
for the purpose of the airport .
2.2.2 .8 .2 Invi t ing tenders regarding the future plans . This involves
expansion of terminal buildings, run way, cargo complex etc.
2.2.2 .8 .3 Appointing consultancy experts for studying the new expansion
in phase II.
2.2.2 .8 .4 To plan and implement important civil works of airport.
2.2 .2 .9 Communication and Information Technology Department
Another important department is the Communication and Information
Technology. This department comes under electrical department. It consists
54
of Deputy Manager and two technicians. This department deals with the
following aspects.
2.2.2 .9 .1 Visual flight information and electronic flight display boards are
installed both inside and outside the terminal buildings. Maintenance
of flight information and display boards is one of the important
functions of this department.
2.2.2 .9 .2 Providers of walky talkies to security personnel and other ground
handling agencies entrusted with the responsibility of advising,
monitoring and supervising the airport.
2.2.2 .9 .3 Technical providers of phones, computers, fax machines, teleprinters
etc.
2.2.2 .9 .4 To up date the websi te of Cochin Internat ional Airport and
include all the latest developments that took place in each department
and its future plans.
2.2.2.10 Electrical Department
Electrical department coordinates with all other departments in
the airport , especially with the communication department on the upkeep
of the l ighting in the runways and other l ighting for signal purpose. The
source of electricity to CIAL are through 11 KV supply by KSEB. Apart
from this, CIAL is having three substations and seven diesel generators to
reduce the wastage of energy. Emergency power supply by Diesel Generators
is available for Runway, Taxiway, Approach Lights, PAPI and apron flood
lights. Electrical department consists of In Charge Electrical, Senior Manager,
55
Manager, Deputy Manager, Senior Technician, Technician, Junior Fire operator
cum Junior Technician, Junior Technician.
Chart 2.11: Functional Chart of Electrical Department
In charge Electrical
Senior Manager
Manager
Deputy Manager
Senior Technician(Electrical)
Technician (Electrical)
Junior Fire Operator cumJunior Technician
Junior Executive
This department deals with the following aspects.
2.2.2.10.1 The electrical department has the responsibility of the maintenance
of the outer s ta t ions. Important outer s ta t ions is s i tuated at
Thattekad, Koovapady, Kalady and Cheranallor.
2.2.2.10.2 To e n s u r e u n i n t e r r u p t e d p o w e r s u p p l y t o a e r o b r i d g e s ,
escalators, approach lights, computers etc.
56
2.2.2.10.3 To dis t r ibute e lectr ical supply for shops in domest ic and
international terminals, power supply to airport facilities such
as passenger check in, online booking etc.
2.2.2.10.4 To maintain electrical equipment, electrical stores and electrical
items used in the airport.
2.2.2.10.5 To manage the energy optimally by adopting conscious steps
to opt imize the consumption of power, when f l ights are not
operating during off peak hours
2.3 FINANCING PATTERN
Kerala Industrial and Technical Consultancy Organization Limited.
(KITCO) was entrusted with the task of preparation of a detailed project
report and they submitted their report in August 1994. Initially the cost of
the project was estimated at Rs.200 crores.27 Government of Kerala’s contribution
towards equity was Rs.26 crores. CIAL raised Rs.4 crores byway of interest
free deposit from NRIs. The cost of the project was revised to Rs.288.61
crores. Due to delay in equity contribution by the shareholders, the company
was required to arrange additional funds through loans and debentures.
To meet this unexpected fund crunch and to continue the project,
the CIAL took loans from HUDCO, commercial banks namely Federal bank,
State Bank of Travancore, Dhanalakshmi bank and South Indian bank for
27. CIAL Annual Report 2001-2002, P. 4.
57
the complet i t ion of the project . Government of Kerala decided to be a
major shareholder and issued a notification in September 1997 enhancing
equity participation to 51 percent. State Bank of Travancore, Federal bank,
Bharath Petroleum Corporation Limited, Air India, NRI’s and public, has
invested the remaining 49 percent.
In March 2002, the Government of Kerala the chief promoter
of the company, decided to limit its share in CIAL from 51 percent to 26
percent .28 As the company had to identify fresh investors to invest around
Rs.80 to 90 crores to br idge the gap in r ight issue, CIAL engaged the
services of UTI bank to identify prospective investors. Shareholding pattern
of CIAL is given in table 2.3.
Table 2.3: Shareholding pattern of CIAL
Stake in CIAL Percentage
Government and PSUs 26
Directors 26
Central PSU (AI & BPCL) 5.1
Banks 4.4
NRIs 38.5
Total 100
Source: File No. CIAL/PA/30D/IB-10.
28. Malayala Manorama Supplement, 1999 May 25, P. 1 – 2.
58
Kerala Industrial and Technical Consultancy Organization Limited
(KITCO) estimated the total cost of the project at Rs.288.61 crores to be
invested in two phases. Phase I will have a financial outlay of Rs.162.04
crores financed through 60 percent loans (Rs.97.22 crores) and 40 percent
equity (Rs.64.82 crores) and phase II Rs.126.57 crores f inanced through
40 percent loans(Rs.53.57 crores) and 60 percent internal accruals and
right issue(Rs. 73 crores) . Table 2.4 the means of f inance est imates and
project indicators as per KITCO report is given below.
Table 2.4: Means of Finance
Sl. Means of Finance Phase I Phase II Total
N o (Rs. in crores)
1 Equity — — —
a Government of Kerala 16.85 — 16.85
b Financial Institution/
Mutual Funds 16.20 — 16.20
c Public Issue 31.77 — 31.77
d Right Issue — 35.71 35.71
2 Internal Accruals — 37.29 37.29
3 Term loans 97.22 53.57 150.79
Total 162.04 126.57 288.61
Source: File No. CIAL/PA/30 D/I B-10
59
2.3.1 Settlement with HUDCO
HUDCO has agreed to reduce interest f rom 16.5 percent to
12 percent on the term loans from 1st Apri l 2000 up to 31 st December
2002 and to 11 percent f rom 1 st January 2003. The total dues towards
HUDCO amounting to Rs.221.48 crores as per their claim has been negotiated
and set t led at Rs.175.07 crores as on 31 st December 2002. Of the above
Rs.175 crores dues payable to HUDCO, Rs.52 crores have been converted
as equity participation in the company. 29 The company repaid Rs.120 crores
of the above loan to HUDCO by avai l ing term loan total l ing to Rs.100
crores f rom Federal bank, State Bank of Travancore and Dhanalakshmi
bank at an average ra te of interest of 8 .3 percent on securi t isa t ion of
receivables and the balance Rs.20 crores from internal accruals. This saved
the company 2.6 percent by way of interest and 0.75 percent by way of
guarantee commission every year.
Company was successful in negotiating with commercial banks
and the rate of interest on the outstanding term loans have been brought
down stil l further. The total loans out standing as on 31st August 2003 is
around Rs.80.92 crores at 7 percent interest per annum from various commercial
banks and Rs. 3 .07 crores f rom HUDCO at 11 percent interest . Under
the scheme of set t lement with HUDCO, a package was worked out to
resolve the default posit ion of HUDCO loans. Pursuant to the sett lement
package s igned on 7 th March 2003, HUDCO reduced the interest ra te to
29. CIAL Annual Report 2002-2003, P.6.
60
12 percent with retrospective effect from 1st April 2000 and subsequently
to 11 percent f rom 1 st January 2003 and also waived the penal interest
rate etc and arrived at a package loan of Rs.175.07 crores. The company
subsequent ly remit ted Rs.120 crores and the outs tanding port ion of the
loan was Rs.55.07 crores. The company availed fresh loans from commercial
banks at lower rates and remitted the entire outstanding loan plus interest
accrued thereon on 16 th September 2004. But HUDCO did not accept the
remittance demanding shares equal to 26 percent stake in the share capital
of the company at face value of Rs.10 per share. Since HUDCO did not
accept repayment of the loan, the company has not provided interest since
that date. The company had provided for interest on Rs.55.07 crores loan
only up to the period of 15th September 2004 ie. 11 percent in the current
year. The interest for the period 16 th September 2004 to 31 st March 2005
works out to Rs.3.27 crores . 30
Subsequent to current balance sheet date (on 27-04-2006)
HUDCO has filed an application with the Debt Recovery Tribunal for delivery
of equi ty shares in their name for Rs.52 crores and payment of balance
loan and interest of Rs.2.29 crores. In response to this the company has
during the current year provided interest on the loan amount for the
remaining period from 16th September 2004 to 31st March 2006 amounting
to Rs.9.33 crores (Rs.2.7 crores) , which includes Rs.3.27 crores relat ing
to the previous year. An amount of Rs.116 crores being the excess of loan
principal, determined based on the scheme of settlement with HUDCO on
7 th March 2003. 31
30. CIAL Annual Report 2005-2006, P.33.31. CIAL Annual Report 2006-2007, P.27.
61
Table 2.5: BALANCE SHEET AS ON 31 st MARCH 2007
As at As at31-3-2006 (Rs.) 31-3-2007 (Rs.)
SHARE CAPITALAuthorised:400,000,000 (200,000,000)equity shares of Rs. 10/-each 20,000,00,000 4,00,00,00,000
Issued Subscribed and Paid up:29,60,56,549(14,88,67,460)equityshares of Rs.10/-each, fully paid up 1,48,86,74,600 2,96,05,65,490
RESERVES AND SURPLUSSurplus in Profit and Loss Account — 16,39,41,179
SECURED LOANSa) Term Loans from SBT 1,55,06,070Interest accrued and due 12,56,735 —
Unsecured Loans HUDCOTerm Loans 55,06,68,141Interest Acquired 17,74,97,512
72,81,65,653 —
b) Federal Bank Term Loan 13,82,23,792Overdraft 1,36,798 —
15,51,23,395
CAPITAL WORK IN PROGRESSa) Civil and other work in progress 15,24,78,797 31,14,44,432b) Advance to Contractors 3,12,80,393 4,15,58,348
18,37,59,190 35,30,02,780
INVESTMENTSLong Term Trade Investments(Unquoted)a) 50000 (50000) Equity shares ofRs.10 each, fully paid up in AirKerala International Services Ltd. 5,00,000 5,00,000
b) 10,200 (7,150) Equity shares ofRs. 10,000 each, fully paid up inCochin International AviationServices Ltd. 7,15,00,000 10,20,00,000
7,20,00,000 10,25,00,000
62
BALANCE SHEET AS ON 31 st MARCH 2007
As at As at31-3-2006 (Rs.) 31-3-2007(Rs.)
CURRENT LIABILITIES ANDPROVISIONS
a) Current Liabilitiesa) Sundry Creditors 45,71,02,113 25,09,44,915b) Security Deposits 29,09,09,635 29,56,39,582c) Liability towards Investor Education and Protection Fund not due Unpaid Dividendsd) Grant APEDA 20,88,434 93,73,374e) Other Liabilities 1,64,05,200 8,68,28,000
7,93,411 1,57,67,609
767,298,793 65,85,53,480
b) Provisions
Provision for tax (Net)Proposed Dividend 13,86,043 4,26,288Provision for Tax on Proposed 14,88,63,350 17,63,68,982DividendProvision for gratuity and leave 2,08,78,085 29,973,908encashment 9 ,492,749 11,598,896
18,06,20,227 21,83,68,074
CURRENT ASSETS LOANSAND ADVANCES
a) Inventories 9,75,85,827 8,34,28,481
b) Cash and Bank Balances
Cash on hand 3,83,958 4,60,566Cheques on hand 52,24,591 ,308,39,833
Balances with scheduled banksIn current account 2,30,64,352 8,63,81,973In deposit account 2965,936 40,77,40,801
3,16,38,837 52,54,23,173
Source: Annual Report of CIAL 2006-2007, P.17 -20.
63
2.4 SOURCE OF INCOME
The income generated by CIAL falls broadly under two categories.
2.4.1 Traffic Revenue (Operational Income)
2.4.2 Non -Traffic Revenue
Traff ic revenue consists of:
2 .4 .1 .1 Terminal Navigation Landing Charges (TNLC)
Terminal Navigation Landing Charges are collected from airline
operators for the use of the Air Traffic Control System (ATC) during terminal
navigat ion and approach for landing. According to the present ra tes , an
amount of Rs.4575 is col lected from each aircraf t that has landed. In
2007 a total of Rs.5,83,23,775 was col lected as TNLC.32
2.4 .1 .2 Landing and All ied Charges
Landing charges const i tute a good percentage of income in
any airport. Landing charges are collected from both flight originating from
or departing to an international destination and any flight where the arriving/
departing passengers require the facili t ies of customs and immigration. It
also include lighting charges, fees collected for use of runways and apron
areas including associated lighting. The rate depends on the landing weight
of the aircraft. In 2007, a sum of Rs. 4,01,22,522 was collected as landing
fee.33
32. Annual Report CIAL 2006-2007, P.No.21.
33. Ibid.
64
2.4 .1 .3 Housing and Parking Charges
When an aircraft is parked in the open, only half the housing
charges shall be levied, provided that no parking charges shall be levied
for the first two hours. Housing and parking charges are levied by airports
for parking of aircraft after the elapse of the stipulated free parking period.
While calculating free parking period, a standard time of 15 minutes shall
be added on account of t ime taken between touchdown t ime and actual
parking t ime on the parking stand. Another s tandard t ime of 15 minutes
shall be added on account of taxing time of aircraft from parking stand to
take off point. These periods shall be applicable for each aircraft irrespective
of actual t ime taken in the movement of aircraft after landing and before
take off. For calculating chargeable parking time, part of an hour shall be
rounded off to the next hour. (Revised from 1-1-2004) This is charged on
the basis of the weight of aircraft. For the purpose of computing income,
housing charges has been assumed to be 4 percent and parking charges
1percent of the total landing charges collected in each year. In 2007 Rs.
21,59,884 was collected as housing and parking charges .
2.4.2 Non-Traff ic Revenue
2.4 .2 .1 X-ray Inspection Charges
X-ray charges are levied on each aircraft for the use of x-ray
equipment at the airport . I t is charged at a f lat rate of Rs.1200 for each
take off . In 2007, Rs.1,09,35,000 has been collected as income.
65
2.4 .2 .2 Passenger Service Fee (PSF)
PSF is charged in Indian airports according to the rates fixed
by Ministry of Civil Aviation, Government of India. An amount of Rs.130
and Rs.70 is col lected from each internat ional and domest ic passenger.
An income of Rs.95,787.692 was col lected as passenger service fee in
2007. 34
2.4 .2 .3 Cargo Handling Charges
Handling charges of internat ional cargo var ies f rom Rs.1 to
Rs.2 per Kg, depending on the type of cargo. A rate of Rs.1.25 has been
used in this airport for calculations. In 2007, an amount of Rs.7,04,95,424
was collected as cargo handling charges.35
2.4 .2 .4 Vehicle Parking/Visitor ’s Entry Charges
Car parking facility and visitors entry charges plays an important
role in the non-aeronautical revenue . The incomes from these sources have
been est imated with a direct bearing on the passengers using the airport
annually. In 1999-2000 about 6 lakh vehicles used the parking lots of the
airport and it has been increased to 20 lakhs in 2007. The income earned
from the car parking is about 30-40 lakh rupees per month.36 In the year
2007, Rs.1,73,678 and Rs.62,37,455 was generated as income under the
entry ticket and parking charges.
34. CIAL, Personnel and Administration File No. CIAL /PA/30D /IB-10. and Annual reports
of CIAL,2005-2007.
35. Ibid.
36. Ibid.
66
The details of source of income for the airport from 2005 to
2007 are given below.
Table 2.6 Major Source of Income for the Airport
OPERATIONAL INCOME For the For the For theyear ended year ended year ended
31-3-2005 31-3-2006 31-3-2007
Traffic Revenue
Landing Fee 19,82,61,728 19,97,06,796 255,042,942
Parking and Housing Fee 14,02,094 21,10,708 21,59,884
Terminal Navigational Landing Charges 5,22,00,872 5,83,23,775 4,01,22,522
Non Traffic Revenue
Users Fee 23,89,77,500 20,14,86,000
Passengers Service Fee 5,97,37,782 7,01,48,718 9,57,87,692
X-Ray Inspection Charges 7,645,500 7,645,500 10935,000
Public Admission Fees
Entry Ticket Income 1,50,67,215 1,30,30,165 62,37,455
Commercial Pass for Travel Agents 3,38,100 5,77,950 9,66,750
Courtesy Coach Parking Charges 78,000 1,51,500 1,73,678
Income from Cargo Operations 5,92,91,214 7,33,32,627 7,04,95,424
Royalty 15,35,89,225 16,71,87,406 18,71,84,544
79,37,01,145 66,91,05,891
OTHER INCOME
Rent and Services 56,717,695 6,70,05,256 7,73,95,918
Interest Income 8,97,119 1,23,76,569 3,96,37,720
Miscellaneous Income 70,53,811 52,37,672 74,69,100
6,46,68,625 8,46,19,497 12,45,02,738
Source: Annual Reports of CIAL 2005, 2006, 2007 Page No.21.
67
Both Traffic and Non –Traffic revenue constitute a major source
of foreign exchange earner. They also show an increasing trend over the
years. The figure for three conceptive years is provided in table 2.7.
Table 2.7: Foreign Exchange Earnings and Outgoings(Receipts and Payments in US Dollars)
2004-05 2005-06 2006-07(Rupees) (Rupees) (Rupees)
Foreign Exchange Earnings
Landing Charges from Foreign Flight 2,94,05,485 3,98,418 8,19,780
Sales Revenue from Duty Free Shop 15,20,24,845 21,90,68,703 31,40,69,477
Royalty from Ground Handling 2,52,95,767 4,36,50,872 5,46,23,868
Royalty from Atlas Jewellery 22,35,375 22,06,750 22,35,375
Others 19,133 7,02,758 10,01,791
20,89,80,605 26,60,27,501 37,27,50,291
Expenditure in Foreign currency
Management Fee 28,79,306 42,78,665 60,47,939
Others 2,75,435 6,84,740 3,28,613
31,54,741 49,63,405 63,76,552
Source: Annual Report of CIAL 2004-05, 2005-06, 2006-07.
A perusal of the above data indicates that the revenue from
duty free business is a key dr iver of foreign exchange growth at CIAL.
About 42 percent of non-aeronaut ical revenue and 15 percent of tota l
revenue generated is from duty free shop. For the year under review, CIAL
duty free recorded a turnover of US $ 7.23 million (32.5crores) as against
a turnover of US $ 4.96 million (Rs.21.31crores) for the previous year.
68
2.5 Performance of the Company
In 2000-01, the company regis tered a net loss of Rs.27.64
crores.37 The major cause for the loss in the operation was the high interest
burden on the debt. During the financial year 2001-02, the gross business
of the company s tood at Rs.4406 lakh regis ter ing a growth rate of 44
percent as against an increase of 14 percent in the operational expenditure.
For the year 2001-02, the airport operat ions generated a cash surplus of
Rs.3412 lakh. However, after providing the interest and financial charges
of Rs.4004 lakh and depreciat ions Rs.1298 lakh, the year ended with a
net loss of Rs.1890 lakh.
During the year 2002-03, the gross earnings of the company
stood at Rs.60.37 crores registering a growth of 37 percent over the previous
year and CIAL registered a net profit (before tax) of Rs.19.83 crores for
the year. This includes an extraordinary item of Rs.15.14 crores being the
benefit accrued to the company by way of waiver of penal measures, reduction
of interest etc. from 1st April 2000 on the scheme of settlement with HUDCO
on 7th March 2003. The total loans outstanding as on 31st August, 2003 is
around Rs.80.92 crores at 7 percent interest per annum from various commercial
banks and Rs.3.07 crores from HUDCO at 11 percent interest. Apart from
this, an amount of Rs.52 crores is ear marked in the total settlement amount
with HUDCO for their equity participation. 38
37. CIAL Annual Report 2000-01, P.4.
38. Ibid.
69
During the year 2004, company earned a net profit of Rs.21.11
crores as against Rs.12.54 crores for the previous year. This represents a
growth of approximately 68 percent . The gross revenue for the year is
Rs.85.26 crores against Rs. 60.37 crores during last year. This translates
into a revenue growth of around 41 percent. The interest and finance charges
were brought down to Rs.11.92 crores as against a total outlay of Rs.20.68
crores for the previous year. The prof i t before tax of Rs.36.04 crores
marks an improvement by 81.74 percent over the previous financial year.
On 31/3/2004, company has given a maiden dividend of 8 percent on the
paid up value of equity shares to the shareholders.
In 2007, the total turnover of the company was Rs.111.86
crores as against the corresponding f igure of Rs.110.66 crores for the
previous f inancial year. The Profi t After Tax (PAT) was Rs.37.19 crores
as against Rs.31.78 crores for the previous year. Table 2.8 shows important
financial parameters for the year under review and figure 2.18 clearly depicts
the key driver of growth of CIAL.
Table 2.8: Performance of the Company .
Financial Parameters 2007 2006 2005
Dividend 8% 8% 8%
Total Income 111.86 110.66 100.26
Profit/ Loss before Tax 44.39 38.80 48.03
Profit/Loss after Tax 37.19 31.78 28.79
Source: Annual Report of CIAL 2005-06, 2006-07, P.4, 32.
70
Figure 2.18: Revenue Mix of CIAL
39. Malayala Manorama, Daily News Paper, 2007, May 24, P. 10.
2.6 PASSENGER MOVEMENT
Cochin is regarded as the fourth busiest airports in the country,
the other three being Mumbai, Delhi and Chennai. In 2005-06, about 73,46,556
passengers travelled through Mumbai, 66,53,366 passengers through Delhi,
28,95,930 passengers are through Chennai and fourth place goes to Cochin
with 11,54,892 passengers.39 Kerala has three airports at Trivandrum, Cochin
and Kozhikode handling both international and domestic flights. Out of the
three international airports Trivandrum and Kozhikode airports are owned
by Government of India and that at Cochin is owned by Cochin International
Airport Limited (CIAL), a company set up by Government of Kerala with
71
public private participation. In Kerala, passenger strength has increased
by 16.34 percent compared to other airports namely Trivandrum and Kozhikode
with more people preferring Cochin. Following table shows passenger movement
through three airports namely Trivandrum, Cochin and Kozhikode.
Table 2.9: Passenger Movement — Trivandrum Airport
Year International Domestic Total
2002-03 758501 239906 998407
2003-04 809140 248491 1057631
2004-05 872436 287715 1160151
2005-06 1003082 320305 1323387
2006-07 1178076 596223 1774299
Source: Economic Review 2007, State Planning Board, P.321.
Table 2.10: Passenger Movement – Kozhikode
Year International Domestic Total
2002-03 411393 172274 583667
2003-04 474710 145793 620503
2004-05 655950 171912 827862
2005-06 768856 191506 960362
2006-07 900345 233342 1133687
Source: ibid
72
Table 2.11: Passenger Movement -Cochin
Year International Domestic Total
2001-02 419249 413565 832814
2002-03 590718 419568 1010286
2003-04 861004 471597 1332601
2004-05 1006158 590054 1596212
2005-06 1154717 731661 1886378
2006-07 1429172 1131898 2561070
Source: ibid
In 2006-07, about 54,69,056 passengers (19,61,463 domestic
and 35,07,593 internat ional) t ravel led through the three airports namely
Trivandrum, Cochin and Kozhikode as against 41,10,750 passengers in the
previous year. Passenger movement through Cochin International Airport
rose to 2.56 million during the year 2006-07 registering a growth of 35.7
percent over the previous year. Increase in passenger strength was due to
more direct flights and reduction in the rates charged by various airlines.
The trends are depicted in figure 2.19.
73
YEAR
NO
. OF
PASS
ENG
ERS
Figure 2.19: Trends in the passenger movement through three airports
2.7 AIRCRAFT MOVEMENT
During 2006-07, 62390 flights (31225 domestic and 31165 international)
were operated from the three airports. Details of flights operated from the
three airports are shown in table 2.12 and figure 2.20.
74
Table 2.12: Aircraft Movement from the Three Airports
Airport International Domestic
Flights(No.) Flights(No.)
Trivandrum 9430 8804
Kozhikode 7563 5920
Cochin 14172 16501
Total 31165 31225
Source: Economic Review 2007, State Planning Board, P.321.
Figure 2.20 : Air Craft Movement from the Three Airports
AIRPORT
NO
. OF
FLIG
HTS
Tri
vand
rum
K
ozhi
kode
Coc
hin
75
Flight movement through the Cochin Airport registered a substantial
growth during 2005-06 and 2006-07 financial year with most of the international
and domestic airlines increasing the in-services. The total aircraft movement
during the per iod was 30,673 as against 20,975 in the preceding f iscal .
International services recorded a growth rate of 23 percent for the period
with the airport handling 14,172 services compared to 11,444 services in
the previous fiscal. During the period, the airport handled 300 international
services a week. The growth in the domestic sector services was 73 percent,
a total of 16,501 services operated through the airport during the period
as against 16,501 services in the previous f iscal year. There has been a
phenomenal increase in the a i r t raff ic through this a i rport . The air l ine
wise break up of operations for the past three years is furnished below.
76
Table 2.13: Aircraft Movement-Cochin
Name of the Aircraft Movement
Airline 2004-05 2005-06 2006-07
Domest ic International Domest ic International Domest ic International
Air India 3273 2176 — 2112
Indian Airlines 2624 2718 2108 3257 2185 3204
Jet Airways 4319 — 4386 — 4365 —
Oman Air — 604 — 710 — 716
Silk Air — 432 — 548 — 610
Kuwait Airways — 312 — 314 — 356
Emirates Airline — 650 — 588 — 740
Qatar Airways — 784 — 500 — 552
Srilankan Airlines — 593 — 1052 — 1134
Saudi Arabian Airlines — 314 — 314 — 316
Air Deccan — — 844 — 3451 —
Kingfisher Airlines — — 738 — 3160 —
Go Air — — 72 — 590 —
Paramount Airways — — 228 — 997 —
Non Scheduled Flights — — 427 21 582 36
Jazeera Airways — — — — — 182
Air Arabia — — — — — 778
Mahan Air — — — 102 — 358
Air India Express — — — 1322 — 2552
Gulf Air — 606 — 540 — 526
Air Sahara 574 — 728 — 1171 —
Total 7671 10286 9531 11444 16501 14172
Source- CIAL Annual Report 2005, 2006, 2007.
77
Cochin International Airport is the only airport in Kerala that
hosted more international and domestic carriers; 16 and 10 whereas, Trivandrum
10 and 3 and only four international and two domestic carriers operated
service in Kozhikode. In the f irs t year of operat ions, the Cochin airport
was handling only 73 services per week. It increased to 158 in 2002 and
170 in 2004. During the period 2006-2007, the airport handled 300 services
per week and on an average 110 aircraf t movements dai ly. 40 Table 2 .14
and Figure 2.21 represents flight operation through CIAL for the last eight
years.
Table 2.14: Number of Flight Operations
Year Flights per week
1999-2000 73
2000-2001 104
2001-2002 152
2002-2003 158
2003-2004 170
2004-2005 184
2005-2006 258
2006-2007 300
Source- CIAL Annual Report 2005, 2006, 2007.
40. Malayala Manorama, Daily News Paper, 2007, May 24, P. 10.
78
Figure 2.21 : Flight Operations through CIAL
The Central Government has accorded this airport Hajj Embarkation
point s ta tes . This leads to the operat ion of over 50 f l ights per year to
transfer Hajj pilgrims to and from Kerala and Jeddah. Several foreign carriers
have shown interest to operate services through Cochin. No other airport
in India has been able to at t ract so many internat ional f l ights in such a
short time as Cochin. CIAL, thus, is a single key factor, which has largely
been responsible for the spurt in tourism, especially modern tourism.
Year
Fli
ghts
per
wee
k