AVIATION INDUSTRY IN INDIA1

Aviation Industry in India is a significant one among those industry segments that have experienced a phenomenal growth across the globe over the past years. The open sky policy of the Indian government is one of the key factors that have allured international players into the aviation industry in India. Since long, the aviation industry in India has been growing in terms of number of air travel firms and number of aircrafts. Today, private airlines alone bear the burden of not less than 75% of the domestic aviation requirements. Indian aviation industry is the 9th largest in the world. As per the statistics released by the Ministry of Civil Aviation, in the year 2008 alone not less than 29.8 million people travelled to and from India which was a 30% surge from 2007. Industry experts have predicted that not less than 50 million passengers will be served by the India aviation industry by 2015. Widening opportunities in India will create room for over 69 foreign airlines entering the Indian aviation sector from about 49 countries. Growth of Indian Aviation industry The Civil Aviation market in India witnessed a CAGR growth of about 18%, which was valued at US$ 5.6 billion in the year 2008. This figure witnessed almost a doubling surge in August 2009 with the domestic airliners transporting more than 3.67 million passengers against only 2.92 million in the corresponding period of 2007, which was a increase up by 26%. The estimation made by the Centre for Asia Pacific Aviation (CAPA) states that the domestic airline traffic in the country will go up by 30% to 35% till in 2011 and 2012, while the international traffic is expected to increase by 15%. This would mean not less than 110 million passengers traveling by air by the year 2011. The Aviation Ministry in India has allotted US$ 9 billion to modernize the existing airports by the year 2011.
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With respect to the volume of domestic passengers, US have always been leading the sector followed by China, Japan and India. Between 2005 and 2008, the number of domestic flights in the nation rose up by 69%, while the domestic aviation sector grew by 9-10%. Some of the notable players in the India aviation industry include Kingfisher Airlines and Kingfisher Red (previously Air Deccan), Jet Airways and Jet Lite (previously Air Sahara), Air India and Indian (previously Indian Airlines), IndiGo, SpiceJet, GoAir, Paramount Airways and MDLR Airlines.

FUTURE OF AVIATION INDUSTRY IN INDIA

With a surging demand and with the entry of a large number of domestic and international companies into the sector, India aviation Industry is sure to witness a phenomenal growth in the near future demonstrating a CAGR growth rate of more than 15% in the forth coming years. It is also estimated that the Ministry of Civil Aviation in India will alone handle about 280 million passengers by the year 2020. Industry experts envisage about US$ 110 billion new investments in the Indian aviation sector with not less than US$ 80 billion exclusively targeted for the purchase of new aircraft and US$ 30 billion for developing the infrastructure at the airports.

AVIATION - MARKET SIZE

In the last decade, domestic air traffic has quadrupled from 13 million to 52 million and international traffic more than tripled to 38 million. A similar trend is observed in the cargo sector, Ms Patil added. The rapidly expanding aviation sector handles 2.5 billion passengers across the world in a year; moves 45 million tonnes of cargo through 920 airlines, using 4,200 airports and deploys 27,000 aircraft. Today, 87 foreign airlines fly to and from India and five Indian carriers fly to and from 40 countries. Passengers carried by domestic airlines during Jan-Nov 2011 were 55.03 million as against 46.81 million during the corresponding period of previous year thereby registering a growth of 17.6 per cent, according to data released by Directorate General Civil Aviation (DGCA). The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 423.31 million from April 2000 to September 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP). Private carriers are anticipated to post a combined profit of US$ 350US$ 400 million for the financial year ending March 31, 2012, as per a report titled '2011-12 Aviation Industry Outlook' by Centre for Asia Pacific Aviation (CAPA) India. CAPA India expects domestic traffic growth of 17-18 per cent, possibly as high as 20 per cent. International passenger numbers, which grew by about 10 per cent last year, are expected to increase towards the upper end of a 10-12 per cent range over the next 12 months.

AVIATION - MARKET PLAYERS

GVK Power & Infrastructure Ltd (GVK PIL) has acquired 108 million equity shares constituting 13.5 per cent in Mumbai International Airport Ltd (MIAL) from its Mauritius partner Bid Services Division for Rs 1,130 crore (US$ 215.28 million)

US-based electrical components company Eaton Corporation foresees plenty of opportunities for itself in India's unfolding civil and military aerospace story. "India is expected to emerge as one of the largest aviation markets in the world," as per Joe-Tao Zhou, APAC President, Aerospace Group, Eaton Corporation

GMR Infrastructure-led Delhi International Airport Ltd (DIAL) is set to approach the Government to expand the permitted land use for 250 acres. The company wants to lease out the land for non-airport related activities

SpiceJet has acquired a new fleet of Q400 aircraft from Bombardier and it will use these aircrafts in its new regional service. Under the deal, SpiceJet also has the option of ordering 15 more Q400 NextGen aircraft

AEROSPACE ON A HIGH

Airline operator Emirates plans to add new destinations in the US and Russia from Hyderabad via Dubai in the next few months. "Our market estimates are that there are about 1,500 passengers flying to Dubai and Seattle each every month from Hyderabad," according to K P Venugopal, Emirates Sales Manager, Andhra Pradesh

GippsAERO, the aircraft manufacturing division of Mahindra Aerospace, has signed an agreement with Rolls Royce to partner on engine technology for a new aircraft

Air India will take delivery of its first Boeing 787 Dreamliner aircraft by the end of 2011, according to Dr Dinesh Keskar, President, Boeing India. Further, Boeing predicts that India will require 1,320 new aircrafts valued at US$ 150 billion over the next 20 years

Air India Express has started operating direct flights from Muscat to three new destinations in Kerala, and have increase the number of flights from the Gulf to the country from October 31, 2011

AVIATION - RECENT DEVELOPMENTS

The ground-breaking ceremony of the new terminal at the Ibrahim Nasir International Airport was held on December 19, 2011. The project is being undertaken by a consortium led by GMR Group. Malaysian Airport is GMR's partner for the project which will be completed by 2014. The project is estimated to cost US$ 510 million

The Turkish Airlines plans to expand its operations in India by 2012. "India is a very important market for us and we need to fly to at least five cities there," according to Temel Kotil, CEO, Turkish Airlines

CAPA expects India's carriers to place orders for up to 200 new aircraft this year, with a list price of US$ 11 - US$ 12billion. This will include about 125-150 narrow bodies, 30-50 regional aircraft and 10-15 wide bodies

AVIATION - GOVERNMENT INITIATIVES

The Government's open sky policy has attracted many foreign players to enter the market and the industry is growing in terms of both players and the number of aircrafts. Given the strong market fundamentals, it is expected that the civil aviation market will register a compound annual growth rate (CAGR) of more than 16 per cent during 2010-2013. Air traffic control (ATC) operations will start functioning as a new entity from April 2012. At present, the air navigation service comes under the Airports Authority of India (AAI), the state-owned airport operator. India has signed the bilateral Aviation Safety Agreement (BASA) with the USA. The Government has taken various steps towards structural policy reforms and is coming out with new policies which are liberal and will encourage public-private partnerships (PPP).

Government of India allows 100 per cent foreign direct investment (FDI) for green field airports, via the automatic route. Moreover, foreign investment up to 74 per cent is permissible through direct approvals while special permissions are required for 100 per cent investment

Private investors are allowed to set up general airports and captive airstrips while maintaining a distance of 150 kms from the existing ones. Complete tax exemption is also granted for 10 years

About 49 per cent FDI is allowed for investment in domestic scheduled passenger airlines and investment up to 100 per cent by non-resident Indians (NRI) via the automatic route. FDI up to 74 per cent is allowed for non-scheduled and cargo airlines

AAI has entered into Operation Management and Development Agreements (OMDA) with M/s. Delhi International Airport Ltd (DIAL) for Indira Gandhi International (IGI) Airport, Delhi with an objective to develop it into a world class airport. Phase-1 of the development of IGI airport has been completed with the construction of the new Integrated Terminal 3 (T3). It caters to additional 34 million passengers per annum (mppa) and can operate as a hub. It is up to the airline to take these opportunities to operate regular scheduled services from these airports and use it as regional hub. This information was given by Mr Vayalar Ravi, the Minister of Civil Aviation to the Lok Sabha. Aviation - Road Ahead The Indian aviation sector is a major economic driver for prosperity, development and employment. Massive investments in airport infrastructure have led to world class airports which have become the symbol of India's growth story. India is poised to emerge as the third largest aviation market in the world by the end of this decade, according to Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation. The sector with a growth of 18 per cent in domestic market is expected to generate approximately 2.6 million jobs in the next one decade, added Dr Zaidi. The Vision-2020 document prepared by Ministry of Civil Aviation is an assessment of the overall outlook of the aviation sector in 2020. The growth of aviation sector has potential to absorb upto US$ 120 billion of investment, according to the 2020 document. Fleet size of commercial airlines sector will be approximately 1,000 aircraft, domestic passenger numbers could reach 150-180 million, Helicopter fleet is expected to be 500, while the air cargo movement is expected to reach the level of 9 million MT. The sector is expected to have the potential to absorb 3 million jobs directly by 2020. The Vision 2020 announced by the Ministry of Civil Aviation also conceives of building infrastructure to support about 280 million customers.

Presently, India has 136 airports, of which 128 are owned by the AAI. managed airports can be categorized as : Airports International airports, including joint venture (JV) airports Domestic airports Customs airports Civil enclaves Number 14 81 8 2

AAI-

TOTAL PASSENGER TRAFFIC HANDLED2

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TOTAL AIRCRAFT MOVEMENTS3

http://www.ibef.org/download/Airports_270111.pdf

NO FRILL AIRLINES
No-frills or no frills is a term used to describe any service or product for which the nonessential features have been removed to keep the price low. The use of the term "frills" refers to a style of fabric decoration. Something offered to customers for no additional charge may be designated as a "frill" - for example, free drinks on airline journeys, or a radio installed in a rental car. No-frills businesses operate on the principle that by removing luxurious additions, customers may be offered lower prices. Frills or tassles on a carpet are not necessary but make the rug look fancy. Frills on any goods are not necessary but are a luxury. No frills means to live without certain luxuries. No-frills airlines are airlines that offer low fares but eliminate all non - essential services, such as complimentary drinks snacks, in - flight entertainment systems, business-class seating etc. A no-frills airline will typically cut overheads by flying from more remote airports (with lower access charges) and by using one single type of aircraft. Aircraft cabin interiors may be fitted out with minimum comforts, dispensing with luxuries such as seat-back video screens, reclining seats and blinds; some airlines choose to carry advertising inside the cabin to increase revenue. Some airlines also extend the definition of "frills" to include standard services and conveniences; for example, a no-frills airline may charge passengers an additional fee for carrying luggage, using the airport check-in desk, using wheelchairs or even for using the toilet.

SPICE JET

SpiceJets mission is to become Indias preferred low-cost airline, delivering the lowest air fares with the highest consumer value, to price sensitive consumers. We hope to fulfill everyones dream of flying! With India's economic and business growth, the percentage of traveling population is burgeoning. More and more Indians are traveling for both business and pleasure and everyone needs to save both time and money. SpiceJet's vision is to adress that and ensure that flying is for everyone. The power to fly for everyone With a dynamic fare structure, SpiceJet offers fares that are affordable and significantly lower than most airlines. With contemporary interiors, modern graphics and vibrant colours, SpiceJet is very much like todays traveler - practical yet stylish. A SpiceJetter will feel this is the smart, international way to travel, I've made the smart choice. SpiceJet is committed to make sure you feel good at the end of a flight, arriving at your destination - fresh and on time. The power of performance. From aircraft to crew and ground staff the focus is on performance. Each SpiceJet employee is groomed to be smart, friendly, efficient and well-informed, ensuring that any interaction will make you feel welcome and looked after. Experienced pilots, well-trained cabin crew will make every flight a comfortable one. The philosophy is no-frills but high-performance. The power of safety SpiceJet invests heavily in safety, impeccable maintenance and a high level of expertise. Experienced pilots, engineers and maintenance crew go through rigorous training and are hand-

picked for their technical knowledge and expertise. So you can rest assured that there is no cutback in this key area of modern day flying. The power behind the power to fly SpiceJet's key management personnel are all senior, seasoned professionals and have significant international experience in both launching and managing low-cost airlines. With thousands of cumulative man hours in the industry, the management is committed to bring to customers in India all the benefits of the global revolution in the skies. SpiceJet aims to make travel comfortable, affordable and refreshingly efficient experience for all.

IndiGo

IndiGo is built for people with things to do, places to be, people to see - who don't want to waste time, money or energy in the process. By minimizing the cost/time/tension of air travel, IndiGo opens up a country full of opportunities. With IndiGo, you've got a billion reasons to fly! IndiGo incorporates the best hardware, software, interface design & personnel from around the world. The IndiGo team uses all of these resources to design processes and rules that are safe and simple, that make sense, and that cut waste and hassles, which in turn ensures a uniquely smooth, seamless, precise, gimmick-free customer experience at fares that are always affordable. IndiGo focuses on doing one thing, and doing it well. That's why we have: One type of airplane - brand-new Airbus A320s One type of fare - low One type of customer service - professional One way to deal with delays and cancellations - honestly

We believe that we can offer the lowest fares by staying focused, which keeps our costs down without cutting corners or compromising on things that matter.

KINGFISHER
"Welcome to a world without passengers" Welcome aboard Kingfisher Airlines, where you are made to feel like an honoured guest and not just a passenger. At Kingfisher, a flight is not a journey between two airports but an experience of a lifetime. As our esteemed guest you can experience Kingfisher Airlines in three unique classes of service - Kingfisher First (Business class) Kingfisher Class (Premium economy) and Kingfisher Red (Low fare). Kingfisher First and Kingfisher Class is available on our international routes too. As Kingfisher takes off into the international skies, you can expect a world-class experience. Every Kingfisher aircraft meets the global standards that I have set in terms of safety and performance. Our brand-new fleet incorporates the latest technology and each aircraft is fitted with a personalized in-flight entertainment system and top quality programming content from around the world for your viewing and listening pleasure, and to create an environment that you will truly cherish. Aboard our flights, you will be delighted by the various sensory experiences on offer from tantalizing aromas of world cuisine to the magic touch of your personal therapeutic massage seat - we really have thought about every little thing that will exhilarate you. In fact our commitment to delivering the Kingfisher experience has won us many accolades. We were voted the "Best New Airline of the Year" within a few months of launching. Of course, being part of a Global conglomerate, the UB Group, has helped us strengthen our service quality even more. We invite you to fly Kingfisher Airlines and experience a journey we strive to create everyday. A journey like never before.

GOAIR
Go Airlines (India) Ltd. is the aviation foray of the Wadia Group, The airline operates its services under the brand GoAir. GoAir launched its operations in November 2005. GoAir, a low-fare carrier launched with the objective of commoditizing air travel, offers airline seats at marginal premium to train fares across India. The airline currently operates across 21 destinations 156 daily flights and approximately 1060 weekly flights. The GoAir route network spans prominent business metropolis as well as key leisure destinations across the Indian subcontinent. GoAir is currently servicing the airports at Ahmedabad, Bagdogra, Bengaluru, Chandigarh, Cochin, Delhi, Goa, Guwahati, Jaipur, Jammu, Kolkata, Leh, Lucknow, Mumbai, Nagpur, Nanded, Patna, Port Blair, Pune, Ranchi and Srinagar. Through this route network GoAir ensures a smart value-for-money option for both business and leisure travellers, without compromising on either safety or service factors. GoAir's distribution network has been well-researched and after thorough evaluation of the available mediums, the Airline has introduced a gamut of options designed to make tickets very accessible to the end passenger. GoAir has convenient online booking options of on its web site www.GoAir.in wherein the passenger or his associate can book GoAir tickets 24x7, 365 days a year from the comforts of his home. For passengers who do not have a credit or debit card or access to a Web Networked Computer, tickets can be booked from other distribution mediums including GoTravel Agents or GoCallCentre. Tickets are also available at the Airport Counters. GoAir is positioned as 'the Smart People's Airline'. It's captivating theme, 'Fly Smart' is aimed at offering passengers a consistent, quality-assured and time-efficient service

through 'pocket-friendly' fares. The airline uses the state-of-the-art Airbus A320 aircraft fleet. GoAir is based on 'punctuality, affordability and convenience' business model. The airline has also partnered with Radixx International, a leading technology provider of automated aviation and travel related software solutions, for the use of its Air Enterprise. The adoption of such technology solutions enables GoAir to achieve superior process efficiency, thereby helping transfer a greater portion of time savings to its passengers. Since January 2007, GoAir has been consistently recording Highest Load factors in the industry. It has been recording an average load factor of 86% achieved through a balanced mix of good on-time performance and consistent quality of customer service coupled with smart fares. As part of its aggressive future outlook, GoAir is inducting aircraft which will take its fleet size to 11 aircraft upto 2011 and will induct new routes while efficiently servicing existing ones. The Wadia Group has been in the fore-front of corporate India for over 116 years. Today, the Group is broadly diversified in several growth industries covering aviation, textiles, chemicals, petrochemicals, plantations, foods, electronics, light engineering, health, laminates, real estate and consultancy. The Group Company has consistently emerged as market leaders in every field they have entered. Over the years, the Wadia Group has developed an enviable record of successfully managing diverse technologies. The Wadia Group has earned a reputation as a household brand through its businesses like Britannia and Bombay Dyeing.

MINIMUM FLIGHT CHARGES FOR BHOPAL TO NEW DELHI4

Air India Jet Airways Jet Konnect Jet Lite Jet Lite Codeshare Multiple Airlines Spicejet Rs.3884 Rs.4184 Rs.10868 Rs.3734 Rs.884 Rs.8889 Rs. 3684

FLIGHT CHARGES FOR MUMBAI TO NEW DELHI4

Kingfisher Jet airways Konnect Jet Airways Jetlite Go Air IndiGo Air India Rs. 4020 Rs. 4185 Rs.3434 Rs. 4634 Rs. 3742 Rs. 4646 Rs. 3793

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