Name of the Student: Manisha Shadangi Enrolment Number: IFHE2301RL1167

SEM 1 /BEL

Landscape of Indian Aviation Sector and establishing GMR as a leading airport

operator in India

Course Project Report

Introduction
In my 2+ years of Experience in GMR Group of Companies , I had an exposure to various sectors of
the their businesses namely, Aviation, Aerospace Engineering, Hospitality and Infrastructure
Development Sector having a multi-dimensional and Multi- Functional exposure in legal, HR,
Taxation, Accounting, Implementing the compliance related IT Tools.

Every Organisation faces some hesitation from its Human Resource/ Employees for implementing a
new policy or a new Standard Operating procedure or Business process management or such other
Technology as may be required for the business for better analysis of Organisational data and
Financial Information. This Course project will highlight certain issues/challenges and will provide
some recommendation by the end of each course project for each subject in its conclusion part which
shall be beneficial for the organisation upon its implementation.

Project Objective
Objective of the BEL Project Study:
Get the better understanding of the of Indian Aviation sector.
 Current landscape
 Key Challenges
 Establishing GMR as a leading Airport operator

Information Collection & Analysis

Sources of data collection

 Aero Commercial Division (staff) of GHIAL – Hyderabad;
 Backend Data Base Management System;
 IATA Websites
 Ministry of Civil Aviation(MoCA Websites)
 Information and records maintained by DGCA;
 CAPA reports
 Reports published by various external sources.

Formats Used
Excel sheet for compilation and preparation of the Air Traffic data for analysis and strategies.
Data Analysis:

Landscaping of the Indian Aviation Industry: Growth Indicators

Aviation Growth in India :
 India one of the least penetrated market in the world.
 Indian Aviation grown by 11% CAGR in last decade(Fastest)
 Expected to grow by 6% CAGR over FY 2018 to FY 2040 (2nd Highest after Vietnam)
 Airline order book of 1000 aircrafts over next 5 years
Government Focus on Aviation
 Rationalization of Airspace post successfully launching of GAGAN.
 UDAN Scheme driving traffic at Underserved locations.
 100% FDI for green field projects.
 Open Service ASAs & privatization of Air India.
Privatization of Airports
 Recently in FY 2019, Govt. of India privatized 6 airports
 Total ~ 25 Airports earmarked to be privatized over the course of next 5 years
 Govt. of India announced to sale residual stake in the JV Airports
Untapped Non-Aero Potential
 Developed airports account for ~55%-60% revenue from non-aero business.
 India AAI owned airports have ~15% revenue from Non-Aero Business while private airports
have ~40% revenue from Non-Aero Business

India is well-positioned to capitalize on growth drivers with clearly defined strategies in Airport and
Non-Airport sectors.
Airports:
India became the world’s 3rd largest domestic aviation market and it is on track to become the world’s
3rd largest international market. Successful implementation of the regional connectivity scheme
(UDAN) has been instrumental in connecting smaller tier 2 and tier 3 towns to the other aviation
markets in India.

Air Cargo:
The Indian air cargo industry was estimated to be US$12.41 billion in 2022 and is expected to reach
US$16.37 billion by 2027, growing at a compound annual growth rate (CAGR) of 5.7% .With the
pandemic and associated nationwide lockdown, the air cargo sector gained prominence in transporting
medical supplies, food, and other essential commodities both domestically and internationally.

MRO:
To cater to this rising demand for air travel, the aircraft fleet size of the country is expected to quadruple
to 2500 (605 as of January 2022) by that time. Indian MRO industry can also cater to aircraft of other
south east (SE) Asian markets such as Bangladesh, Sri Lanka, Maldives, Thailand, Vietnam, and
Philippines.
 Findings:

About Airports-

 The government is planning to transform several tier 1 (non-metro) and tier 2 airports into some
of the country’s most major airports.
 At present, there are around sixteen major airports in the country, but by 2033, these are
expected to increase to forty-five.
 Traffic in 2033 is expected to increase to 959 million PAX p.a., at cumulative increase of 281%
(around 8% CAGR)

 As per the DGCA 123.2 million passengers traveled by air in India in 2022.
 India's air travel reached 85.7% of 2019 levels in 2022.
 The country's RPKs (revenue passenger kilometers) increased 48.8% compared to 2021, while
domestic ASK (Available Seat Kilometers) increased 30.1% from the previous year.
 According to CAPA India, India will be the next growth engine of global aviation with Indian
carriers expected to place orders for 1,500-1,700 aircraft over the next 24 months.
 India will require approximately 2,210 new airplanes over the next two decades, of which 1,983
units
 AAI and other airport developers have targeted a capital outlay of approximately Rs. 98,000
crore in the next five years for expansion and modification of new and existing terminals as well
as strengthening of runways.

About MRO-

 To cater the rising demand for air travel, the aircraft fleet size of the country is expected to quadruple
to 2500 (605 as of January 2022) by that time.
 Indian MRO industry can also cater to aircraft of other south east (SE) Asian markets such as
Bangladesh, Sri Lanka, Maldives, Thailand, Vietnam, and Philippines.
 The Government of India has launched measures such as the Make in India initiative and relaxation in
foreign Direct investment (FDI) norms to boost manufacturing in the nation’s aerospace sector.
 About Air Cargo:

 The air cargo industry plays a prominent role

in the supply chain of the country, and is a
major source of employment for its
population.
 Despite this, the modal share of air accounted
for less than 5% of the country’s total freight
in 2021
 Out of the Global Air Freight Market, which
was valued at USD Billion 270.20 in 2019,
India contributed only USD Billion 8, thereby
accounting for 3% of the global air freight
market
 India has an advantage of its geographical
location as it is situated between the
manufacturing hub of East and Southeast Asia
and the consumption centers in America and
Europe.
 India has seen significant growth of 9.7% over
the last decade and will continue to grow
despite the impact from the COVID
 India’s domestic air cargo trade will continue
to see rapid growth of 6.3% per year over the
next two decades.

Current Scenario and Challenges

 Indian carriers fleet is down by 72 aircrafts compared to pre-COVID, ~12%
 IndiGo fleet is higher than all other Indian carriers combined
 For next 7-8 years, 1060 aircraft are ordered by Indian airlines. However, ~70% are replacements.
 90% of Order size is Narrow Body (A320/B737) IndiGo order 566, SpiceJet at 168, Air India at
150 and Vistara at 27 and rest by others
 Focused on Neo and Max aircraft due to lower cost attributed fuel efficiency and maintenance cost
 There is no effective Hub Carrier in India like Lufthansa, Singapore Airlines, Emirates, Qatar
Airways etc. Further, India’s proximity to large hub airports in cities like Dubai, Singapore and
Istanbul also affected in gaining large share of International-to-International transfer passengers.

GMR Airports Infrastructure Ltd

 GMR Airport Ltd is the 2nd Largest globally and Largest Private airport operator in Asia Pacific
 Catering to 40mn+ pax (DIAL) Catering to 15mn –25mn pax (GHIAL)
 It had 27% share of passenger traffic in India in CY22.
 It has Operational capacity of 190 million.
 With a market share of ~45% in India, GIL has demonstrated the scalability of the platform which
has wide ranging capabilities across the airport value chain, developed over years of experience
Conclusion

Recent Developments in Indian Aviation Landscape to Facilitate Indian Airport Operators

such as GMR

 To capitalize, the National Air Cargo Policy 2019 (“NACP”) proposes for creation of
transportation hubs at all Metro airports in the run up to 2025.
 For International Freighters GoI has withdrawn from the unrestricted Open Skies Policy to
promote Indian Carriers.
 Indigo Signed Pact to Explore Usage Of Sustainable Aviation Fuel in its Aircraft
 TATA’s to be a game changer for the sector in the long run
 Integration of Vistara and Air India Network
 Integration of Air India Express with AirAsia
 Plans to service ~ 100 Dom and 60 Intl.
 Indigo's long term focus is on international (~40% of its operations by 2025).
 Signed Code-Shared agreement with American Airlines. Plans for more such agreements.
 Spice Jet plans to expand the fleet of passenger jets and cargo (~ 30-40 Planes).
 Has broken into the top ten carriers of cargo from India in the World ACD air cargo
rankings
 Akasa (LCC) started in summer 2022. Ordered 75 planes (B737 Max) for next four years.

Hence, we can conclude that Indian aviation has good time ahead will be benefited from the
liberal government policies.

It is the right time for GMR to invest more in the Airports through the Greenfield or the
brownfield model.

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