AVIATION SECTOR

OUTLINES
Current Scenario of Indian Aviation industry Market Size Air Traffic Type of market Airport Infrastructure Aviation Policy Effect on Indian Economy Factors influencing growth rate Aviation Sector Outlook

Current Scenario of Indian Aviation Industry

India completed 100 years in aviation sector on 18 February, 2011 The Indian Aviation Industry is one of the fastest growing aviation industries in the world 454 airports and airstrips; 16 designated international airports With the liberalization of the Indian aviation sector aviation industry has undergone rapid transformation Being primarily a government-owned industry, Indian aviation now dominated by privately owned full-service airlines and low cost carriers Private airlines account for around 75% share of domestic airline aviation market Airline business growing at 27% per annum: Ministry of Civil Aviation

Market Size
India is currently the ninth largest aviation market in the world India's domestic air traffic grew at a rate, which is the second highest after Brazil according to global figures for June 2011, compiled by IATA Domestic traffic growth 25-30% annually and international traffic 15% in 2010 :CAPA

Domestic Airlines
Air India Go Air Airlines Indigo Airlines Jagson Airline Jet Airways JetLite Kingfisher Airline Paramount Airways Spice Jet Airways MDLR Airlines

Market share

Air Traffic
The country's domestic traffic grew by 14 per Strong domestic passenger growth rate of 22.3 per cent in July 2011 Passenger traffic has grown at 18 per cent year on year (y-o-y) basis and the year 2010 closed at 90 million passengers both domestic and international In July 2011, airlines in India handled 5 million domestic passengers, according to data released by the Directorate General Civil Aviation (DGCA) on 12 September 2011, marking the 11th consecutive month of double-digit growth

Passengers carried by scheduled domestic airlines

Aircraft Class Statistics

Class G H A U X M D B Number 61 300 1169 40 0 8 1 24 20

A B D G
H M U X

Aircraft Balloon Hang Glider Glider

Helicopter Motor Glider Ultralight Experimental

Aviation Sector: Some facts

In present scenario around 11 domestic airlines operating in India Growth of airlines traffic in Aviation Industry in India is almost four times above international average Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia

Type of market
In 1953, all airlines merged into Indian Airlines or Air India Monopoly perpetuated for next 40 years Controlled by Directorate General of Civil Aviation On 1 March 1994, Government open the gates for private entrants Sensing a huge opportunity, a large number of players jumped into the fray Now the market is Oligopoly

Airport Infrastructure
Of the 454 airports and airstrips in India, 16 are designated international airports 97 airports owned and operated by Airport Authority of India (AAI) Indias 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

Continued
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

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 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

Continued
49% FDI permissible under automatic route, but not by foreign airline companies. 100% equity ownership by non-resident Indians (NRIs) 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

How aviation industry is effecting Indias economy?

Earlier there were just two airlines, both state owned. In last few years economy has opened up. India experienced growth rate of 8% per year Main factors which effect the Indian Economy are: 1. Increased no. of domestic airlines 2. Low cost airlines 3. Indias improving economy Other factors: 1. Increased in no. of business travelers to different countries 2. Increased no. of incoming tourist and business enterprises

Known factors Influencing Growth Rate

Increase inward and outward tourism Increased competition driven down prices and margins Additional purchasing power due to rapidly rising real income amongst the middle class Increased business trade due to rapidly growing economy and free trade agreements with neighboring countries Favorable Government policies and tax reforms

Aviation Sector Outlook

As per the Investment Commission of India, aviation sector is likely to boom further in the coming years, attracting huge investment Passenger traffic is projected to grow at a compound annual growth rate (CAGR) of over 15% in next 5 years The vision 2020 statement announced by 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 80 billion in new aircraft and US$ 30 billion in development of infrastructure Air cargo traffic to grow at over 11.4% p.a. over next 5 years