AVIATION SECTOR IN INDIA

Presented By-
1
Swapnilkumar Pawar (13253)
HISTORY-BEFORE INDEPENDENCE
 First commercial flight on February 18, 1911
 Allahabad to Naini made by a French pilot
Monseigneur Piguet covering a distance of about 10 km
 In 1915 Tata Sons Ltd. started regular air mail services
between Karachi and Madras and on January 24,
1920 Royal Airforce started regular airmail services
between Karachi and Bombay.
 First air route between Karachi and Delhi-1912-by
Indian State Air Services and Imperial Airways-
extension to LONDON – KARACHI flight
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HISTORY-BEFORE INDEPENDENCE
 In 1915 Tata Sons Ltd. started regular air mail services
between Karachi and Madras and on January 24, 1920
Royal Airforce started regular airmail services
between Karachi and Bombay
 Construction of Civil Airports in India started in 1924.
Constructions began in Calcutta at
DumDum,.Allahabad at Bamrauli and in Bombay in
Gilbert Hill .
 April 1927 saw the setting up of a separate Department
of Civil Aviation to look after all civil aviation
matters. That year also saw the establishment of Aero
club of India. 3
HISTORY-AFTER INDEPENDENCE
 India had nine air transport companies transporting both
cargo and passenger traffic.
 Indian Airline was set up to cater to the domestic
market, while Air India was set up to take care of the
International sector. Both Indian Airline and Air India
enjoyed monopoly over the Indian skies.
 In March 1953 the Indian Parliament passed the Air
Corporations Act, and Indian Airlines and Air India
International were set up afternationalisation of the entire
airline industry. At this time eight formerly independent
domestic airlines: Deccan Airways, Airways
India,Bharat Airways, Himalyan Aviation, KalingaAir 4

Lines, Indian National Airways, Air India, Air Services

of India were merged.
HISTORY-AFTER INDEPENDENCE
 In 1953 the Indian government nationalized all the
existing airline assets.
 In 1972 the International Airports Authority of India
(IAAI) was constituted and Vayudoot airlines (a
government owned airline company) started operation in
the year 1981.
 1985 was also a very traumatic year for Indian aviation
when Air India flight AI 182 between
Montreal and Delhi was blown up by terrorists over
the Atlantic Ocean. Following this, the Bureau of Civil
Aviation Security was established in 1987.
 The National Airports Authority was constituted in
1986. 5
HISTORY-POST LIBERALIZATION
 In 1995 Airport Authority of India (AAI) was constituted after the
merging of the International Airport Authority of India with National
Airports Authority.
 1990-91 saw the entry of private airlines after the de-regulation of
the civil aviation sector. Private airlines were given permission to
operate charter and non-scheduled services under the ‘Air Taxi’
Scheme. The East West Airlines was the first national level private
airline to operate in the country after almost 37 years.
 In 1994-95 the government gave permission to directly import
aviation turbine fuel (ATF).In 1997-98 to take the process of
liberalization one step further, foreign equity participation up to 40
per cent (100 per cent for NRI's) was allowed in the domestic airline
segment. But International service providers could not take stakes
either directly or indirectly without approval from DGCA. 6
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REGULATORY AUTHORITIES: STATE OF
REGULATION
 Airport Authority of India (AAI):
The Airport Authority of India (AAI) is the operator in majority of airports.
- The relevant statutes are The Airports Authority of India Act, 1994 and The
Airports Authority of India (Amendment) Act, 2003.
- It is the de facto regulator for those airports.

 The Directorate General of Civil Aviation (DGCA):

- The overall functions of DGCA include regulation of air transport services
to/from/within/over India by Indian and Foreign operators, registration of civil
aircraft, formulation of air safety and airworthiness standards for civil aircraft
registered in India and grant of certificates of airworthiness to such aircraft.
- It oversees the licensing of pilots, aircraft maintenance engineers, flight
engineers and air traffic controllers.
- It also coordinates all regulatory functions with International Civil Aviation
Organization (ICAO). 8
REGULATORY AUTHORITIES: STATE OF
REGULATION CONTD…
 Airport Regulatory Authority of India (AERA):

- The relevant statute is the Airports Economic Regulatory

Authority of India (AERA) Act, 2008.

- The function of the authority is to determine tariffs for

aeronautical services, determine development and
passenger service fees in the major airports and to
monitor set performance standards relating to quality,
continuity and reliability of service.

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DOMESTIC AIRLINES
 Air India
 GoAir Airlines
 IndiGo Airlines
 Jagson Airline
 Jet Airways
 Jet Airways Konnect
 Paramount Airways
 SpiceJet Airlines
 JetLite (Air Sahara)
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MARKET SHARE

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HOW AVIATION INDUSTRY IS EFFECTING
INDIA'S ECONOMY?
Earlier there were just two airlines, both state owned. In last
few years economy has opened up. India experienced
growth rate of 5-6% per year
 The main factors which affect the Indian Economy are:-
1. Increased no. of domestic airlines
2. Low cost airlines
3. India's improving economy
 the other factors are:-
1. Increased in no. of business travellers to different
countries
2.Incresed no. of incoming tourist and business
enterprises 12
ROLE OF AVIATION INDUSTRY IN INDIA GDP-
GROWTH FACTORS

The growth in the Indian economy has increased the Gross

Domestic Product above 5% and this high growth rate will be
sustained for a good number of years
 Air traffic has grown enormously and expected to have a
growth which would be above 25% in the travel segment
with the growth in the economy and stability of the country
India has become one of the preferred locations for the trade
and commerce activities
 The growth of airlines traffic in Aviation Industry in India is
almost four times above international average
 Aviation Industry in India have placed the biggest order for
aircrafts globally
 Aviation Industry in India holds around 69% of the total
share of the airlines traffic in the region of South Asia 13
ROAD AHEAD

 The Indian aviation sector is likely to see clear skies ahead in the years to come.
 Passenger traffic is projected to grow at a CAGR of over 15 per cent in the next
5 years.
 The Vision 2020 statement announced by the Ministry of Civil Aviation,
envisages creating infrastructure to handle 280 million passengers by 2020.
 Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80
billion in new aircraft and US$ 30 billion in development of airport
infrastructure.
 Associated areas such as maintenance, repair and overhaul (MRO) and
training offer high investment potential. A report by Ernst & Young says the
MRO category in the aviation sector can absorb up to US$ 120 billion worth of
investments by 2020.
 Aerospace major Boeing forecasts that the Indian market will require 1,000
commercial jets in the next 20 years, which will represent over 3 per cent of
Boeing Commercial Airplanes’ forecasted market worldwide. This makes India a
US$ 100 billion market in 20 years. 14
AIRPORT INFRASTRUCTURE
 Of the 464 airports and airstrips in India, 16 are
designated international airports
 India’s Civil Aviation Ministry aims 500 operational
airports in next 12 years as per report by CAPA
 Government aims to attract private investment in
Aviation Infrastructure
 Mumbai and Delhi airports already privatized,
upgraded at an estimate investment of US$ 4 billion
over 2006-16

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AIRPORT INFRASTRUCTURE CONTD…
 A Greenfield airport already operational at
Bangalore and Hyderabad, built by private consortia at
total investment of over US$ 800 million
 A second Greenfield airport planned at Navi Mumbai,
developed using public-private partnership mode at an
estimated cost of US$ 2.5billion
 35 other city airports proposed to be upgraded
 Over next five years, AAI planned massive investment of
US$ 3.7 billion – 43% of which for Kolkata, Chennai
and Trivandrum and rest for other non metro airports
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AT PRESENT

 AAI manages 125 airports which

includes:

 18 International airports
 07 Custom airports
 26 Civil Enclaves
 78 Domestic airports

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CIVIL AVIATION SECTOR IN INDIA – INVESTMENT
NEEDS
 Projected Investment in Infrastructure—Twelfth
Plan( Rs Crore at Current Prices)

Twelfth Plan Projection

Total Eleventh
sector
Plan Total Twelfth
2012-13 2013-14 2014-15 2015-16 2016-17
Plan

Centre 11873 2456 2710 2988 3282 3605 15041

State 1030 268 351 458 596 776 2449

Private 23408 4967 7655 11787 18081 27735 70224

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Airports 36311 7691 10716 15233 21959 32116 87714
BUDGET FOR AVIATION
 Civil Aviation: Budgetary support of Rs.6500.00
crore has been earmarked for equity infusion in Air
India Limited. Budgetary support of Rs.50.00 crore
has been earmarked to meet expenditure
towards the Plan schemes of Ministry
 Airports Authority of India has been provided
with budgetary support of Rs.79.70 crore, out of
which Rs.22.00 crore has been earmarked for its
project at Pakyong, Sikkim (North Eastern Region).
 Budgetary support of Rs.50.00 crore has been
provided to Directorate General of Civil Aviation
to pursue their Plan schemes
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 A provision of Rs.40.00 crore has been made for
Bureau of Civil Aviation Security for meeting
expenditure towards their Plan schemes
 Budgetary support of Rs.0.10 crore has been
provided to Hotel Corporation of India for
renovation of its hotels/flight kitchen.
 Aero Club of India has been provided grants-in-aid
of Rs.0.10 crore. The Indira Gandhi Rashtriya
Uran Akademi is being provided with grants of
Rs.0.10 crore.

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11TH FIVE YEAR PLAN
 The investment requirement for airport development in
the country is projected at Rs. 30,968 crore for the
Eleventh Plan Period. It consists of investment in the
four Metro airports, 35 specific non-Metro airports,
Greenfield airports, North-East airports and upgradation
of CNS-ATM and other equipments. Out of the total
investment, the projected shares of public and private
sector investment are roughly 30% (Rs. 9,338 crore) and
70% (Rs. 21,630 crore) respectively.

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11TH PLAN PERFORMANCE OF CONSTITUENT
UNITS OF CIVIL AVIATION

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PASSENGER TRAFFIC FORECAST 12TH PLAN

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PASSENGER GROWTH
 Passengers carried by domestic airlines during Jan-Oct 2014 were 550.68
lakhs as against 507.03 lakhs during the corresponding period of
previous year thereby registering a growth of 8.61%

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CARGO TRAFFIC FORECAST

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PASSENGER LOAD FACTOR

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AIRLINES CANCELLATION RATE( SEP.2014)

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AVIATION POLICIES
Many policies supporting the infrastructure are now in
place
 For Greenfield airports, FDI up to 100% permitted
through automatic approvals
 For existing airports, FDI up to 74% permitted through
special permission from Foreign Investment
Promotion Board (FIPB)
 Private developers allowed to set up captive airstrips and
general airports 150 km away from existing airports
 100% tax exemption for airport projects for a period
of 10 years
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AVIATION POLICIES CONTD…
 49% FDI permissible under automatic route, but not by
foreign airline companies. 100% equity ownership by
non-resident Indians (NRI’s) is permitted
 74% FDI permissible in cargo and non- scheduled
airlines
 The “Open Sky” policy of the Government and rapid air
traffic growth, resulted in the entry of several new
privately owned airlines and increased frequency/flights
for international airlines

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FOREIGN COMPANIES CAN EXPLORE VARIOUS MODES
OF ENTRY INTO THE INDIAN MARKET

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AIRPORT INFRASTRUCTURE INVESTMENT 12TH
PLAN

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AIRLINES 12TH PLAN

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KEY OBJECTIVES UNDER THE TWELFTH PLAN
 Develop greater design and manufacturing
capabilities in the defence space.
 Become a global player in supplying advanced
technology in space sector at a fair price in the
global space market.
 Drive dedicated technology development for civil
aviation, develop greater manufacturing
capabilities.
 Become the international hub for maintenance,
repair and overhaul needs(MRO).
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REFERENCES
 www.india-aviation.in
 www.ibef.org/industry/indian-aviation.aspx

 12thplan.gov.in

 planningcommission.nic.in/plans/planrel/11thf.htm

 articles.economictimes.indiatimes.com › Collections
› Market Share
 en.wikipedia.org/wiki/List_of_airlines_of_India

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