Overview

The history of civil aviation in India began in December 1912. This was with the opening of the first
domestic air route between Karachi and Delhi by the Indian state Air services in collaboration with
the imperial Airways, UK, though it was a mere extension of London-Karachi flight of the latter
airline. Three years later, the first Indian airline, Tata Sons Ltd., started a regular airmail service
between Karachi and Madras without any patronage from the government.

At the time of independence, the number of air transport companies, which were operating within
and beyond the frontiers of the company, carrying both air cargo and passengers, was nine. It was
reduced to eight, with Orient Airways shifting to Pakistan. These airlines were: Tata Airlines, Indian
National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry
Airways.

In early 1948, a joint sector company, Air India International Ltd., was established by the Government
of India and Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed
constellation aircraft. Its first flight took off on June 8, 1948 on the Mumbai (Bombay)-London air
route. At the time of its nationalization in 1953, it was operating four weekly services between
Mumbai-London and two weekly services between Mumbai and Nairobi. The joint venture was
headed by J.R.D. Tata, a visionary who had founded the first India airline in 1932 and had himself
piloted its inaugural flight.

Significance of Air Transport

  Air transport is the most modern, the quickest and the latest addition to the modes of transport.
Because of speed with which aeroplanes can fly, travel by air is becoming increasingly popular. As far
as the world trade is concerned it is still dominated by sea transport because air transport is very
expensive and is also unsuitable for carrying heavy, bulky goods. However, transportation of high
value light goods and perishable goods is increasingly being done by air transport

Nationalization of Airlines  

  The soaring prices of aviation fuel, mounting salary bills and disproportionately large fleets took a
heavy toll of the then airlines. The financial health of companies declined despite liberal Government
patronage, particularly from 1949, and an upward trend in air cargo and passenger traffic. The trend,
however, was not in keeping with the expectations of these airlines which had gone on an expansion
spree during the post-World War II period, acquiring aircraft ad spares.
The Government set up the Air Traffic Enquiry Committee in 1950 to look into the problems of the
airline. Though the Committee found no justification for nationalization of airlines, it favored their
voluntary merger. Such a merger, however, was not welcomed by the airlines.
 

Foreign Airlines  

Foreign airlines carrying international passenger traffic to and from India existed long before
Independence. Their operations are governed by bilateral agreements signed from time to time
between the Government of India and the governments of respective countries. In 1980-81, the
number of such airlines was 35. It rose to 49 in 1996-97.

The share of foreign airlines in India's scheduled international traffic has increased. In 1971, their
share was 55.58 per cent which went up to 65 per cent and declined to 58 per cent during 1972-75. It
fell to 55.72 per cent in 1976 and further to 55.02 per cent in 1977. Between 1978 and 1990 it gradually
increased and rose to 75.93 per cent. In 1996, the share was nearly 72 per cent.

Open-Sky Policy  

The Open-sky policy came in April 1990. The policy allowed air taxi- operators to operate flights from
any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo
and passenger fares. The operators were, however, required to use aircraft with a minimum of 15
seats and conform to the prescribed rules. In 1990, the private air taxi-operators carried 15,000
passengers. This number increased to 4.1 lakh in 1992, 29.2 lakh in 1993, 36 lakh in 1994 and 48.9 lakh
in 1995.

The 1996, private air taxi operators carried 49.08 lakh passengers which amounted to a 41.14 per cent
share in the domestic air passenger traffic. Seven operators viz NEPC Airlines, Skyline NEPC, Jet Air,
Archana Airways, Sahara India Airlines, Modiluft and East West Airlines have since acquired the
status of scheduled airlines. Besides this there were 22 nonscheduled private operators and 34 private
operators holding no-objection certificate in 1996. The number of plus 120 category aircraft in the
private sector was 34 and the total fleet strength was 75 in June, 1996. Two out of seven scheduled air
taxi operators suspended their operations in 1996 because of the non-availability of aircraft.  

Infrastructure and Related Facilities  

Airport Authority of India:

set up on April 1,1995 by amalgamating the international Airport Authority of India and the National
Airport Authority of India, the Airport Authority of India was to handle all matters relating to
infrastructure for civil air traffic and transport at the international and the domestic airports and
enclaves in the country.
Indira Gandhi Rashtriya Uran Akademi:
It was set up at Fursatganj to standardize and improve the flying training facilities in the country. Till
January 1997 it had trained 289 pilots on fixed wing aircraft and 20 pilots on rotary wing aircraft.

Flying/gliding training clubs:

On December 31,1996, besides the above Akademi, 41 flying clubs/institutes and their branches
including nine private institutes were imparting flying training. Five gliding clubs, seven gliding
wings of flying clubs and a government Gliding Centre, Pune, were imparting training in gliding.

Development of Civil Aviation

The repeal of the Air Corporation Act from 1 March 1994 enabled private operators to provide air
transport services.

Six operators were given the status of scheduled operators on 1 February 1995.

Currently there are five international airports and 87 domestic airport in the country with 28 civilian
enclaves for defence purposes.

The Airport Authority of India plans to invest Rs 35,000 million for the construction and up gradation
of airports.

Budgetary support of Rs 485.50 million was allocated to AAI in 1996-97.

In august 1996, in a major policy decision, the government allowed the private sector to set up air
cargo complexes in a bid to ensure smooth movement of export cargo.

Domestic and foreign investors including NRIs have been invited to participate in the development of
infrastructure support at select airports.
With a market share of 43% Indian airlines is the biggest player in aviation.
Rs 24,710 million have been marked for development of the civil aviation sector in the annual plan for
1997-98.

The Indian Air cargo Market 

The growth of air cargo in India has also been manifold though it might not have kept pace with the
progress made all over the world. Table 1 shows how both international and domestic air cargo traffic
has increased, reflecting an overall year on year growth. 

Table 1: Trends in cargo traffic at five international airports in India.

(Figures in '000 tonnes)
 Period  International Domestic Tota Percentage
Cargo Cargo l Increase 
1972-73  47.4  33.6  81  - 
1982-83  165.4  84.6  250 209%
1992-93  300.5 90.9 391.  56.56%
4
1999-2000  494.2  183.0 677. 73%
2

(Source - Transport India 2000) 

Future Outlook Of The Industry

Future projections reflect that the air cargo industry both in the domestic sector and the international
sector will continue in its upward trend of growth. Fig.1 reflects that the domestic air cargo will
continue at a somewhat steady rate of growth whereas the international air cargo movement as
illustrated in Fig.2 shows a steeper rate of growth indicating that international air cargo trade will
flourish at a higher rate of growth.

Fig. 1 

Fig. 2

(Source - Transport India 2000)

Both Domestic cargo and International cargo are poised to grow according to the projections. The
major reasons, which can be attributed to this increase, are 

Increase in overseas trade 

Indian economic policies 
Customer service orientation 
Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the
Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a
government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines
 and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air
travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded
by a large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and
Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an
extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian
airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers.
These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat
Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration
with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft.
The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The
Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established
the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for
international air travel passengers. The assets of the existing airline companies were transferred to these two
corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned
airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These
government-owned airlines dominated Indian aviation industry till the mid-1990s.

In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate flights from any
airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger
fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air
transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations
(Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport services.
Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up
to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services
sector. However, no foreign airline could directly or indirectly hold equity in a domestic airline company.

By 1995, several private airlines had ventured into the aviation business and accounted for more than 10 percent
of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines, East West Airlines, ModiLuft
Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But only Jet Airways and Sahara managed
to survive the competition. Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began
to lose market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines
and these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air travel
affordable.

Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF) prices,
rising labor costs and shortage of skilled labor, rapid fleet expansion, and intense price competition among the
players. But one of the major challenges facing Indian aviation industry is infrastructure constraint. Airport
infrastructure needs to be upgraded rapidly if Indian aviation industry has to continue its success story. Some
steps have been taken in this direction. Two of India's largest airports-Mumbai and New Delhi-were privatized
recently. Two greenfield airports are coming up at Bangalore and Hyderabad in southern India. Investments are
pouring into almost all aspects of the industry, including aircraft maintenance, pilot training and air cargo services.
The future prospects of Indian aviation sector look bright.

The history of civil aviation in India started with its first commercial flight on February 18, 1911. It was a journey from
Allahabad to Naini made by a French pilot Monseigneur Piguet covering a distance of about 10 km. Since then efforts
were on to improve the health of India's Civil Aviation Industry. The first domestic air route between Karachi and Delhi
was opened in December 1912 by the Indian State Air Services in collaboration with the Imperial Airways, UK as an
extension of London-Karachi flight of the Imperial Airways.

The aviation industry in India gathered momentum after three years with the opening of a regular airmail service
between Karachi and Madras by the first Indian airline, Tata Sons Ltd. However this service failed to receive any
backing from the Indian Government.

At the time of independence nine Air Transport Companies were operational in the Indian Territory. Later the number
reduced to eight when the Orient Airways shifted its base to Pakistan. The then operational airlines were Tata
Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry
Airways.
With an attempt to farther strengthen the base of the aviation sector in India, the Government of India together with
Air India (earlier Tata Airline) set up a joint sector company, Air India International, in early 1948. With an initial
investment of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, Air India started its journey in the
Indian aviation sector on June 8, 1948 in Mumbai (Bombay)-London air route.

For many years since its inception the Indian Aviation Industry was plagued by inappropriate regulatory and
operational procedures resulting in either excessive or no competition. Nationalization of Indian Airlines (IA) in 1953
brought the domestic civil aviation sector under the purview of Indian Government. Government's intervention in this
sector was meant for removing the operational limitations arising out of excess competition.

Air transportation in India now comes under the direct control of the Department of Civil Aviation, a part of the Ministry
of Civil Aviation and Tourism of Government of India.

Aviation by its very nature constitutes the elitist part of our country's infrastructure. This sector has substantial
contribution towards the development of country's trade and tourism, providing easier access to the areas full of
natural beauty. It therefore acts as a stimulus for country's growth and economic prosperity.

07th, May 2007
Kingfisher Airlines Creates Aviation History by flying in the Airbus A380 to commemorate its second
anniversary       
The world`s biggest and most advanced aircraft arrives in New Delhi on its maiden visit to India New
Delhi, May 7, 2007—Kingfisher Airlines Limited, India`s favourite airline today added another feather to
its cap with the arrival of the Airbus A380 at New Delhi`s Indira Gandhi International Airport. The Airbus
A380 is on its maiden visit to India and arrived here on the eve of the second anniversary celebrations of
Kingfisher Airlines Limited. The visit of the world`s largest and most advanced passenger airplane, which
is widely regarded as the future of aviation, marks a momentous milestone in the history of civil aviation
in India. Addressing media persons at a press briefing held to commemorate the maiden visit of the
Airbus A380, Dr. Vijay Mallya, Chairman and CEO, Kingfisher Airlines Limited, said, "Ever since its launch
in May 2005, Kingfisher Airlines has achieved a reputation for being an innovative, superior service
airline and has evolved into one of the most admired brands in the aviation space worldwide. Besides
introducing a host of delights in terms of product and service offerings coupled with world-class
technology, Kingfisher Airlines has altered and redefined the whole paradigm of air travel and marketing
in many ways and our guests, our investors, our partners and staff and have come to expect excellence
from us". Dr. Mallya added, "The visit of the Airbus A380 to India on the occasion of the second
anniversary celebrations is a celebration of the continued spirit of innovation and excellence that has
become a hallmark for Kingfisher Airlines. The rapid expansion of our route network has resulted in an
unprecedented rate of growth and today, Kingfisher Airlines serves 26 cities and operates 163 flights a
day in just under two years of operations. We are on track in our mission to be India`s largest private
domestic carrier by 2010". "We are very proud that we have brought our flagship aircraft to India for
everyone to see. Kingfisher Airlines has grown impressively and we are delighted they will be flying the
A380 over Indian skies to destinations as far afield as the United States. The A380 will bring new
standards of passenger comfort, and fuel efficiency to the Indian aviation market. The A380 is truely a
"green giant" with the lowest environmental impact of any aircraft flying today or in the near future,
with lower fuel consumption and lower noise", said John Leahy, Airbus Chief Operating Officer,
Customers. Added Mr. Srinivas Bommidala, Managing Director, GMR Delhi International Airport (P)
Limited said, “We are delighted to welcome the Airbus A380 to Delhi Airport. It is a historic moment for
us to be among the first airports in Asia and the first in India to host this revolutionary aircraft. I wish Mr.
John Leahy, COO (Customer) Airbus and Dr. Vijay Mallya, Chairman, Kingfisher Airlines, the very best in
their endeavour."