Dual airport viability depends on economic feasibility

Oman Air’s decision to shift operations to Mopa International Airport from January 1, 2023, has resurrected the debate on continued commercial operations at Dabolim Airport. However, there is no clear indication that the existing airport will close for commercial landings and takeoffs. The present plan seems to be a dual airport system for Goa. However, the economic reality could alter the dual airport plan.

An August 26, 2022, order of the Airports Economic Regulatory Authority of India states in paragraph 1.3: ‘State of Goa already has an airport in Dabolim run by Airports Authority of India as a Civil Enclave. The site for this Greenfield airport viz Mopa International Airport is in close proximity to the existing airport. After operationalisation of the Greenfield airport, State of Goa will have a dual airport system and passengers will have the option to fly from either of the two airports.’

If this does not dispel misgivings about the continuation of the Dabolim airport for commercial aircraft operations, then the Request for Qualification for the Mopa airport made it clear that Dabolim would remain open, even after the new airport was opened.

Paragraph 1.1.1. of the RFQ states, ‘In March 2000, the Government of India (“GoI”) had granted an in-principle approval to develop a greenfield airport at Mopa, Goa (the “Airport”). While granting such approval, the GoI had recommended the closure of the existing airport at Dabolim upon the commencement of commercial operations of the airport. However, in June 2010, GoI reviewed its decision and allowed the continuation of operations at the existing airport in Dabolim even after the commissioning of the airport. The Government of Goa (“GoG”) has endorsed the decision and confirms that Dabolim will remain open for commercial civil operation even after Mopa is made operational.’

This is a condition that GMR, concessionaire of the Mopa Airport, which is a Public-Private Partnership that has reached completion of the first phase on a Design, Build, Finance, Operate and Transfer (DBFOT) basis, cannot claim it is unaware of.

Yet, there will be airlines that will opt for the new airport. Following Oman Air’s revelation, other airlines may follow suit. A few days later, a report in a section of the media revealed that a Chandigarh-Goa flight would operate from Mopa. Yet, it is expected that not all airlines will change airports immediately. Most may wait and take a decision based on how the market develops.

According to Traffic Plan Greenfield Airport Mopa Master Plan Volume 3, the following airlines have a high likelihood of shifting to Mopa: Air Asia India, Go Air and Spice Jet. Foreign airlines which may opt to change base are schedule carriers like Russian Charters and Vistara. The least likely to shift airports are Air India and the European Charters.

However, keeping Dabolim open for operations would also depend largely on economic viability. GMR has a 60-year concession for the Mopa airport. The Master Plan Volume 3 of the Traffic report also states, ‘Goa Mopa will be operated concurrently with Dabolim which will continue to operate as is. The CA states the airport should be fully A380 compliant and able to handle 4.4 mppa (million passengers per annum) upon opening with capacity ultimately growing to 13.1 mppa at least.’

What this essentially means is that in the first phase Mopa airport opens with a passenger handling capacity of 4.4 million passengers per annum, while simultaneously Dabolim is equipped to handle up to 5 million passengers per year. The airport’s passenger handling capacity is projected to grow to 5.8 million passengers per annum on completion of the second phase and 9.4 million passengers per annum by the third phase.

With Goa’s passenger traffic currently over 5 million a year, both airports can manage to stay operational for a while distributing air traffic between themselves, but what happens when Mopa Airport is fully functional with a capacity of 13.1 million passengers per annum? Or even before that for instance in the third phase when its capacity reaches 9.4 mppa? Will it be economically viable for both airports to stay open?

The same master plan also states that ‘Goa Dabolim will remain open, and its preferable location and low costs – combined with airline inertia – will mean it retains a considerable share of its traffic base despite the complexities caused by the restricted operating hours.’ If this does happen, then Mopa will have to find new airlines and new destinations to sustain itself economically.

The fear that currently resides among people is that it will be Dabolim airport that will have to shut down for commercial operations when it reaches economic unfeasibility and that this will have a domino effect on business and tourism in South Goa. A correlation to the Mopa airport opening is that it will boost tourism in North Goa and make possible the development of South Maharashtra for holidayers.

The dual airport system is a complex matter and it is only the economic feasibility of keeping two airports in operation that will decide the issue. With Mopa being a business proposition, the fears of Dabolim closing at some point in the future cannot be set aside.