INDIAN AVIATION INDUSTRY

ARE YOU READY

TO FLY?
 OVERVIEW

India’s civil aviation industry is on a high-growth trajectory. It

is currently the ninth-largest civil aviation market in the world,
with a market size of around US$ 16 billion.
• India, the fastest-growing aviation market in the world.
• Catered to 190 Million passengers in 2015.
• 60 Million international passengers by 2017.
• 90 international airlines connecting over 52 countries.
• Estimated profit of USD 1.29 billion in FY2016
 VISION

India aims to become the third-largest aviation market by 2020

and the largest by 2030.
• Low Cost Carriers(LCCs)
• Modern Airports
• FDI
• Advanced Information Technology
• Growing regional Connectivity
TOP PLAYERS IN DOMESTIC MARKET

INDIGO
JET AIRWAYS
SPICEJET
AIR INDIA
GO AIR
OTHERS

New entrants like AIR ASIA, AIR INDIA

EXPRESS, AIR COSTA & VISTARA AIRLINES
 INVESTMENT
OPPURTUNITIES

 Joint venture between TASL and Boeing to establish a centre of

excellence for manufacturing aero structures.
 Boeing plans to assemble one of its two helicopters namely,
Chinook in India, thus becoming yet another global company to
invest in India encouraged by the ‘Make in India’ campaign.
 Airbus plans to open aircraft MRO facility in India and to source
products worth US$ 2 billion cumulatively over the next five years.
 300 business jets, 300 small aircraft and 250 helicopters are
expected to be added to the current fleet in the next five years.
 150 greenfield and brownfield airports.
 The development of new airports – the AAI aims to bring around
250 airports under operation across the country by 2020.
GOVERNMENT INITIATIVES
•Fostering of PPP models
•AAI to revive and operationalize around 50 airports in India.
•Proposition to raise FDI limit in domestic airlines from 49%to over
50%. Reforms such as tax incentives for airlines, incentives for
travellers to fly to small towns at affordable rates.
•The DGCA has given its approval to Air India’s MRO unit.
•committee comprising bankers, aviation experts and technocrats
to help turn around and privatize the national airline, Air India.
•The Government of India approved a proposal to set up a second
airport in NCR.
•The Government to finalize the new aviation policy and revised
international flying norms for domestic carriers soon. May remove
the ‘5/20’ norms for domestic airlines in this new policy.
FDI IN INDIAN AVIATION
• 100% Foreign Direct Investment (FDI) for Greenfield airport projects.
• Up to 74% FDI for Brownfield airport projects.
• Up to 49% FDI for passenger airlines
• Up to 100% FDI in helicopter services and seaplanes.
• Up to 49% FDI in ground handling services.
• Up to 100% FDI in maintenance and repair organisations; flying training institutes;
and technical training institutes.

NOTE -Investments are subject to relevant regulations, approvals from DGCA and
security and other conditions. Foreign airlines are also, henceforth, allowed to
invest in the capital of Indian companies, operating scheduled and non-scheduled
Air Transport Services, up to the limit of 49% of their paid-up capital. Investments
will be subject to government route.
FOREIGN INVESTORS
•Airbus (France)
•Boeing International Corporation (USA)
•Air Asia (Malaysia)
•Rolls Royce (UK)
•Frankfurt Airport Services Worldwide (Germany)
•Honeywell Aerospace (USA)
•Malaysia Airports Holdings Berhad (Malaysia)
•GE Aviation (USA)
•Airports Company South Africa Global (South Africa)
•Alcoa Fastening Systems Aerospace (USA)
•Etihad airways (Abu Dhabi)
•Singapore airlines (vistara airlines)
•Total energy
ROLE OF AVIATION INDUSTRY IN INDIAN
ECONOMY
• Entry of private operators and huge cut in air travel prices has
made air travel in India popular.
• Air traffic has grown enormously and expected to have a
growth which would be over 20% in coming years.
• Presently around 12 domestic airlines and above 60
international airlines are operating in India.
• 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 bringing in more FDI.
• The growth of airline traffic in India is almost twice the global
average.
• Aviation Industry in India have placed the biggest order for
aircrafts globally.
Airline Business Strategies

Service time and

its corresponding Deregulation
price
Basis

Market Pricing strategy

penetration
Pricing Strategy
The most commonly pricing model used in airline industry is
dynamic pricing model.
The components of pricing strategy are :

Pricing strategy
Peak user
Segmented pricing
pricing

Service Time of Changing

time purchase conditions
Limitations

Increasing
Low profit
consumer
margins
expectations

Cost reduction &

improved Shifting airline
operational landscape
efficiency
Recommendations

Get to know
your Digitalizatio
customers n
better

Cut the fat,

Partner
not the
strategically
muscle
Strategic Alliances
Some examples of strategic alliances :-
• Etihad Airways and Jet Airways
• Tata and Malaysian Airlines (Vistara Airlines)
• Star Alliance Members
• Skyward Alliance
• Pro-jet

ADVANTAGES DISADVANTAGES

Extended Higher
network prices

Cost Lesser
reductions frequency
ROAD AHEAD..
India’s aviation industry is largely untapped with huge growth
opportunities, considering that air transport is still expensive
for majority of the country’s population, of which nearly 40 per
cent is the upwardly mobile middle class. The industry
stakeholders should engage and collaborate with policy makers
to implement efficient and rational decisions that would boost
India’s civil aviation industry. With the right policies and
relentless focus on quality, cost and passenger interest, India
would be well placed to achieve its vision of becoming the
third-largest aviation market by 2020 and the largest by 2030.
THE END