For the purpose of forecasting demand, methods identified by International Civil Aviation Organization (ICAO) were used to the extent possible. ICAO provides three basic methods of forecasting, namely Trend Projections (based on historical growth), Econometric Relationship Modelling (based on correlation with GDP of the catchments area) and Market and Industry Survey (based on the industry and market survey).

In absence of reliable long term historical economic data for catchments area of different airports, a combination of trend and market/industry survey methods have been adopted for demand projections. By analyzing the past trends and through inputs from market analysis, informed judgement for the growth rate of each airport has been formed. Different growth rates have been adopted for the period 2007-15 and 2016-20.

Growth rates adopted for domestic passenger demand forecast

Ahmedabad has exhibited domestic traffic growth of 36% CAGR during last five years. However impeding challenges in the aviation sector may slow this growth and hence a conservative 24% growth in the traffic of Ahmedabad airport has been adopted. Vadodara and Jamnagar for the second category of growth airports at the middle level. For other airports relatively slower growth rates have been adopted, mainly based on past trends.

Based on the above, on an unconstrained capacity basis, the traffic forecast for domestic passengers for Gujarat airports is as under.

Exhibit: Domestic passenger traffic projection for Gujarat airports (lakh passengers)

Airport	Year
Total	33.7	49.3	72.5	161.8	222.6

 

Source: CRISIL Analysis (Base Data:AAI) (2007 are actual numbers)

The above forecast shows that the Ahmedabad will continue to have the major share of the air traffic on the State given its higher growth rate. Vadodara will be a distant second. The balance key airports will continue to have low traffic numbers and low overall market share

International Passenger Traffic

International passenger traffic at Ahmedabad has grown at a CAGR of 29% in the last five years from 2002-03 to 2007-08. There was a drop in growth in 2006-07 but the recovery has been robust in 2007-08 with increased direct flights. However, the current year (2008-09) may see a slump. However, given the huge investments planned, introduction of many new international flights, easing of oil prices and the new international terminal with apron will become available in 2009. Considering these, a conservative, lower than historical growth rate of 25% has been adopted for the period of 2007-15 while 15% has been adopted for period beyond 2015. The projections are as under.

Passengers) Exhibit: International passenger traffic projection for Ahmedabad airport (Lakh

Source: CRISIL analysis