INDUSTRY ANALYSIS

REPORT
INDIAN AVIATION
INDUSTRY

SCHOOL OF MANAGEMENT
STUDIES
JAWAHARLAL NEHRU
TECHNOLOGICAL UNIVERSITY
HYDERABAD
 CONTENTS
 An Introduction  Factors Inputs
 Aviation History  Consumer
 Open Sky Policy Demands
 Civil Aviation Policy  SWOT Analysis
 Airport  Challenges of the
Infrastructure Industry
 Major Player  Findings of the
report
 Conclusion
 INDIAN AVIATION INDUSTRY
Introduction
 AAI manages 127 airport which includes
13 international,94 domestic and 28 civil
enclaves.
 Five metro cities handles about 70% of air
traffic
 Growth rate of domestic passenger is at
12% per annum.
 Air traffic movements recorded at an
increase of 18.4% in Oct 2008.
 The air traffic becoming more thicker than
previous.
 History of indian aviation
 The first flight in India was made on 18
Feb 1911 by a Franch Monseigneur Piguet
between Allahabad to naini.
 Tata airlines was the first aviation
company founded by Jamsedji Tata.
 Aviation was firmly controlled by Govt.
prior to liberalization.
 Air Corporation Act was erected in 1953.
 DGCA controls all aspect of flying.
 Open Sky Policy

 Unrestricted access by any carrier into the

sovereign territory of a country.
 No restrictions on landing, clarification,
permit, scale of air carrier movements.
 Share of aviation route is unrestricted
(except defense aircraft).
 Provision to avail full ground support.
 More than 180 bilateral agreement has
signed by India with different countries.
 Civil aviation policy in India
 100 percent FDI under automatic route is
permissible for Greenfield airports .
 Private developers allowed setting up of
captive airstrips and general airports 150
km away from existing one
 100 percent tax exemption for airport
projects for a period of 10 years
 74% FDI is permissible in cargo and non
scheduled airlines.
 100 % equity ownership by NRIs is
permitted.
 Airport Infrastructure

 Total 127 airports(13 intnl,80 domestic,

7 custom, 28 civil enclave)
 Third largest in the world operating with
more than 500 fleet size.
 All major airlines have its own
maintenance units for the aircraft
overhauling.
 In recent year three new international has
been developed at Hyderabad,Bangaluru
and kochi.
 Major Player
 Air India ( Oct 1953), Govt. owned
 Air Deccan ( Aug 2003), Capt G R Gopinath
 Air Sahara (Sep 1991) Sahara Pariwar
 Go Airlines (Jun 2004) Wadia Group
 IndiGO Airline (Aug 2006)
 Jet Airways (Naresh Goyal)
 Kingfisher (May 2005) Vijay Mallya
 Paramount Airways (Oct 2005) Paramaount Gp
 Spice Jet (May 2005)
 JetLite (Known as Air Sahara)
 Factors inputs
 Aviation fare in India is highest
amongst any other developing
countries
 labor charges contributes 36% of
operational cost.
 ATF is major cost for domestic
carriers. It cost around 30% at
variable rates.
 Capital investment in
 SWOT ANALYSIS
STRENGTHS WEAKNESS
 Passengers need for  Excess capacity
connected services  Complicated flight
 Fast and leisure mode operations. Hub and
traveling spokes network in
 Enhancement in-flight legacy carriers
services and more  Mounted debt-
comfort seating enormous debt to
 Govt. protection investment ratio.
 Cost to revenues per
seat is very high
 SWOT ANALYSIS
OPPORTUNITES
 Vast market,
 growing demand,
 un-restricted business
opportunities,
 favorable mkt conditions,
 increasing income level of
families,
 availability of liberal housing
loans,
 India becoming hub of BPOs &
IT / ITES co.
 Increasing scope for medical
tourism
 Increasing income level of
younger people due IT sector.
THREATS
 High land value in big cities
 Less assistance from Govt.
 Recessionary world market.
 Outsourcing jobs moving to
smaller countries like
Phillipines, Malayasia etc
 Increasing terrorist activities.
 Entry of international retailers
into India
 Illegal land grabbing by land
mafias.
 Major Real Estate Players
 DLF Pvt Ltd
 Parsavanath Dev Ltd
 Purvankara Infrastructure Ltd
 Sobha Developers Pvt Ltd
 Kolte Patil Pvt Ltd
 Omaxe group Co.
 Unitech Ltd etc
 MARKET & OPPORTUNITIES
 Moving up the value chain
 Commercial Real Estate
 Residential Estate
 Rising urbanisation
 Increasing number of households
 Growing number of first time home buyers
 Increasing income levels
 Penetration of mortgage finance
 Retail real estate
 Concept of specialised malls gaining popularity eg,
jewellary mall, auto mall, food malls, electronic malls,
furniture malls etc.