Aviotech analyzed the airport security market in India. It found that airport security contributes approximately $800 million annually to India's critical infrastructure protection market, which is expected to grow to $6 billion over the next 5 years. Aviotech also examined trends in India's aviation sector like increasing passenger traffic and new airport development that are driving growth in airport security spending.

1. Airport Security
Market Assessment

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• Aviotech Defense Advisory & Investments
• Rahul Gangal*
• +91 (0) 770 233 1818
• Director
• rahul@aviotech.com
• Udit Narula
• +91 (0) 965 445 2626
• Research Associate
• udit.narula@aviotech.com
• Airport Security Market Assessment
• Synopsis
• ▪ Airport security is a key component of Critical Infrastructure Protection

4. • which is a subset of the larger Homeland Security spend for India. The
• Homeland Security spend annually in India (across central government,
• state governments and private industry) is anticipated at more than $38 Bn
• The projections for the next 5 years are anticipated to be several folds more
• ▪ Of the Homeland security spend the Critical Infrastructure Protection
• contribution is anticipated at 16%
• ▪ Airport security contributes to approximately $800 mn as an annual
• opportunity. This trend is seen to have a strengthening uptick in spending
• over the next 2-3 years as key airports of India are progressively modernised
• alongwith the inception of new ones
• ▪ Aviotech anticipates the market for Airport Security in India to be a
• cumulative opportunity of $6 Bn over the next 5 years
• Indian Security Market
• Source: Aviotech Research

5. • Aerospace and Defense Update
• Aviotech does and seeks to do business with companies covered in its
research reports. As a result, investors should be aware that the firm may
have a conflict of
• interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment
decision
• Defense Advisory & Investments
• ▪ The first step in analyzing the Critical Infrastructure Protection market is
• defining what constitutes “Critical Infrastructure”
• ▪ Critical infrastructure is a term used by governments to describe assets
• that are essential for the functioning of a society and economy. Thus if the
• consequential aspect of failure of an infrastructural facility is taken into
• account, a large and diverse set of sectors fit into the framework of
• “Critical infrastructure”
• ▪ Key threats to Critical Infrastructure include:
• ▪ Terrorism and internal security

6. • ▪ New forms of cyber crime
• ▪ Natural hazards
• ▪ Increasing overall infrastructural spends are cascading into larger capital
• outlays for Critical Infrastructure in specific and security market in general.
• Total spend by the government on Critical Infrastructure security in India
• over the next 5-6 years is anticipated to be around $32 Bn
• ▪ The key focus areas of Critical Infrastructure Protection include integrated
• security systems, disaster management equipment, emergency response
• forces and physical manning of installations
• ▪ Airport security is one of the major sub components of Critical
• Infrastructure Protection. Thus this report is an attempt to provide an
• overview of the Critical Infrastructure security market through a detailed
• mapping of the airport security market in India

7. • ▪ The same exercise when performed individually for all the other
• components of Critical Infrastructure security will give us a fair idea of the
• overall market
• Detailed Assessment - Critical Infrastructure
• Critical Infrastructure Protection - Components
• Critical Infrastructure market in India
• Key areas of
• focus
• ▪ Integrated security
• systems
• ▪ Disaster
• management
• equipment
• ▪ Emergency
• response forces
• ▪ Physical manning of
• installations
• Projected
• market
• $32 Bn in the next 5-
• 6 years
• Share out of the
• overall security
• market
• 16%

8. • Aviotech does and seeks to do business with companies covered in its
research reports. As a result, investors should be aware that the firm may
have a conflict of
• interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment
decision
• Defense Advisory & Investments
• Aerospace and Defense Update
• ▪ India's domestic aviation market continues to expand significantly:
• ▪ Passenger traffic increased from 40 mn in 2000-01 to 124 mn in
• 2010-111
• ▪ Cargo handled has expanded by 18% year on year1
• ▪ Investment of Rs. 12,900 Crores envisaged on creating new airport
• facilities in the 12th five year plan2
• ▪ Currently there are 50 operational airports in the public domain
• and 15 in the private domain. This number is expected to increase
• significantly4
• ▪ The need for security equipment, therefore, is growing in tandem with

9. • the growth in the number of airports and travellers. The core areas of
• high-tech equipment, such as digital surveillance technology, perimeter
• control equipment, access control and emergency response have
• captured the attention of all airport operators (both private and
• government)
• ▪ The Indian airport security market is expected to present an opportunity
• to the tune of $6 bn till 2015-16. This will include upgradation of existing
• airports, replacement of equipment as well as procurement for the
• Greenfield airports planned
• Detailed Assessment - Airport Security in India
• Number of Airports: Projected rise
• Public-Private
• partnership projects
• 12 airports (till 2014)

10. • Modernization of
• metro airports
• 5 airports (till 2014)
• Modernization of non
• metro airports
• 35 airports (till 2014)
• Airport development
• in Eastern states
• 5 airports (till 2014)
• No frills/Low cost
• airports
• 25 airports (till 2014)
• Private/Merchant
• airport development

11. • 15 airports (till 2014)
• Airport Authority of
• India’s projection for
• 2020
• 500 airports
• Airport Security in India - Classification
• Source: Aviotech Research
• Source: Position paper on the airports sector in India
• by the Department of Economic Affairs, Ministry of
• Finance, Government of India
• *Source:
• 1Creating World Class Infrastructure by Ministry of Civil Aviation, GoI
• 215th Annual Report, Airport Authority of India
• 3 List of Licensed Aerodrome (as on 31st August, 2011) by the DGCA

12. Defense Advisory & Investments
▪ Focus areas for capacity building in airport security will be upgradation
and integration. As an illustration, the future may be defined by systems
which integrate perimetric security equipment with surveillance
equipment which will further generate triggers to activate response
principles and control mechanisms
▪ The process of upgradation of equipment at the existing airports and
new installation at the planned airports has been set into motion with
the following emerging trends:
Airport security equipment market in India
Airport Security Infrastructure: Key Roles
Overseer
Airport Authority of India
Regulator
Bureau of Civil Aviation
Security
Buyer
Airport Operator (Private or
Government)
Implementer
Central Industrial Security
forces

13. Aviotech does and seeks to do business with companies covered in its research
reports. As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report. Investors should consider this
report as only a single factor in making their investment decision
Defense Advisory & Investments
Aerospace and Defense Update
▪ The responsibility lies with Central Industrial Security Force, although
many private airport operators have now started complementing it with
private security
▪ About 4000 personnel for the larger airports and 500 for the smaller
airports are employed for airport security
▪ This sub-segment addresses about $300 mn of the airport security
market each year
▪ Largest opportunity is seen to lie in bullet proof jackets, hand held
weapons and light armored vehicles
Airport Security Spend : Physical Manpower
▪ This sub-segment addresses about $250 mn of the airport security
market each year
▪ Constantly evolving technologies and rapid obsolescence ensure quick
turnaround of the equipment necessary
▪ Major sets of opportunities are:
▪ Scanners: Including X ray Baggage Scanners, Hand held metal

14. Detectors, Hand Baggage Scanners and Door Frame Metal
Detectors (about $120 mn)
▪ Surveillance equipment: Including CCTV System & surveillance
monitors, IP surveillance cameras (about $80 mn)
▪ Perimetric access: Bollards, Tyre killers, Boom barriers, Electrical
Fencing, Alarms and sensor systems for fencing and Turnstiles
(about $50 mn)
▪ Largest opportunity is seen to lie in X ray baggage scanners, hand
baggage scanners, CCTV systems and electrical fencing and sensor
systems
Airport Security Spend : Perimetric Security
Major components as
a percentage of the
total physical
manpower security
market
Major components
as a percentage of
the total Perimetric
Security market

15. Assumptions for projecting market size for each equipment class:
•
The classification used in the figure “Airport Security in India – Classification” and
contains the same sub components
•
The airports for public use were divided into bigger airports in terms of footfalls
(Delhi,
Mumbai, Bangalore etc.) and smaller airports (Bhubaneswar, Chandigarh etc./).
•
The number of existing/projected equipment researched through sources at each
airport was plugged in accordingly
•
The rate at which the government buys the listed equipment was as the benchmark
price of equipment
•
All the security equipment was assumed as getting replaced once every three years on
account of wear & tear or technology obsolescence, all the services an yearly cycle of
contract renewal
•
Integration and installation as well as service and maintenance have each been taken
50% of the cost of equipment
•
The total market was projected accordingly
All figures in $ mn and over
a 3 year horizon

16. Defense Advisory & Investments
▪ This sub-segment addresses about $210 mn of the airport security
market each year
▪ Major sets of opportunity are:
▪ Bomb detection and disposal: Including Explosive Vapour Detector,
Improvised Explosives Device (IED) Detector, Liquid bomb detector,
Non linear Junction Detector, Water Jet Disruptors, Bomb Disposal
Kit, Bomb disposal blankets, IED Jammers and Bomb Disposal Suits
(about $45 mn)
▪ Disaster response Vehicles: Police vehicles, ambulances,
communication vehicles and fire tenders (about $155 mn)
▪ Including Fire fighting equipment: Including smoke detectors, fire
extinguishing systems and hand held extinguishers (about $10 mn)
▪ Largest opportunity is seen to lie in IED detectors & jammers and
emergency vehicles
Airport Security : Disaster Management & Emergency Response
▪ This sub-segment addresses about $70 mn of the airport security market
each year
▪ Largest opportunity is seen to lie in smart card readers, iris recognition
equipment and doorphones/intercom
Identification/Access Control
Major
components as a
percentage of the
total Disaster
Management
market
Major components
as a percentage of
the total
Identification /
Access Control
market
Aviotech Defense Advisory and Investments
India
202-206 Sewa Corporate Tower, Sector 25, MG Road, Gurgaon 122002
UK
31A, St. James Square, London SW1 YJR
www.aviotech.com

17. Page 10
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Aviotech does and seeks to do business with companies covered in its research reports. As a result, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.
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where multiple research analysts are primarily responsible for this report, with respect to each security that
the research analyst covers in this research) that; 1) all of the views expressed in this report accurately reflect
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