ARE YOU READY TO FLY?

INDIAN AVIATION INDUSTRY

India, the fastest-growing aviation market in
the world with an annual growth rate of 20%.
Ninth largest civil aviation market in the world
Catered to 183 Million passengers in 2015.
60 Million international passengers by 2017.
90 international airlines connecting over 52
countries.
Third largest aviation market by 2020.
1000 aircraftby 2020.
Estimated profit of USD 1.29 billion in FY2016

Aviation infrastructure

AGENCIES

Ministry of Civil Aviation

Directorate General of Civil Aviation
Bureau of Civil Aviation Security
Airports Economic Regulatory Authorit
y of India
Air India Limited
Pawan Hans Limited
Airports Authority of India

INVESTMENT OPPORTUNITIES
300 business jets, 300 small aircraftand 250 helicopters are
expected to be added to the current fleet in the next five years.
Growth in aviation is accentuating demand for MRO facilities.
Greenfield airports under PPP at Navi Mumbai and Mopa (Goa).
The development of new airports the AAI aims to bring around
250 airports under operation across the country by 2020.
The North-east region the AAI plans to develop Guwahati as an
inter-regional hub and Agartala, Imphal and Dibrugarh as intraregional hubs.
The AAI plans to spend USD 1.3 Billion on non-metro projects
between 2013 and 2017, focusing on the modernisation and upgradation of airports.
Indian airports are emulating the SEZ Aerotropolis model to
enhance revenues, focus on revenues from retail, advertising and
vehicle parking, security equipment and services.

FOREIGN INVESTORS

Airbus (France)
Boeing International Corporation (USA)
AirAsia (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)

INVESTMENTS
According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in air
transport (including air freight) between April 2000 and June 2015 stood at US$ 573.12 million.
Key investments and developments in Indias aviation industry include:

The Ministry of Civil Aviation has signed Memorandum of Understanding (MoU) with Finland, Kazakhstan,
Kenya, Sweden, Norway, Denmark, Oman and Ethiopia for increased co-operation between the countries in
terms of additional seats, sharing of airlines codes, increased frequencies and additional points of call, during
the International Civil Aviation Negotiations (ICAN),2015 held in Antalya, Turkey.

Tata Advanced Systems (TASL) has signed a joint venture with American aircraft manufacturing major,
Boeing, to establish a centre of excellence for manufacturing aerostructures for Apache helicopter initially
and collaborate on integrated systems development opportunities in India in the long term.

US-based aircraft manufacturer Boeing plans to assemble one of its two helicopters namely, Chinook (heavylift) or Apache (attack type) in India, thus becoming yet another global company to invest in India
encouraged by the Make in India campaign.

Airbus SAS, one of the top two aircraft manufacturers in the world, plans to open aircraft maintenance and
repair overhaul (MRO) facility in India.

Airbus, the worlds leading aircraft maker, expects Indias aviation industry to grow at over 10 per cent
annually in the next decade, almost double the average growth rate of the global aviation industry.

Eyeing large orders from Indian airlines, Airbus has committed to source products worth US$ 2 billion
cumulatively over the next five years from India; the company plans to provide customised maintenance and
other services closer to the base for all its airline customers in India.

French drone-maker LH Aviation signed a Memorandum of Understanding (MoU) with Indias OIS Advanced
Technologies on June 19, 2015 to manufacture tactical drones in India through an industrial license.

Mahindra Group expanded its partnership with GE Aviation by signing an agreement to manufacture aero
structures at the Groups new aerospace facility in Bengaluru.

IndiGo plans to file documents for an initial public offering within the next two months to raise US$ 400
million by selling 10 per cent stake.

SpiceJet plans to enter a deal with Boeing Co. and Airbus Group SE to buy 80-120 jet airplanes which would
help to expand their fleet and rebuild its business.

ROLE OF INDIAN AVIATION

IN GDP
TheRole of Aviation Industry in India GDPin the past few years has been phenomenal in all
respects. The Aviation Industry in India is the most rapidly growing aviation sector of the world.
With the rise in the economy of the country and followed by the liberalization in the aviation
sector, the Aviation Industry in India went through a complete transformation in the recent period
With the entry of the private operators in this sector and the huge cut in air prices, air travel in
India IS becoming popular.
The growth in the Indian economy has increased the Gross Domestic Product above 8% and this
high growth rate will be sustained for a good number of years
Air traffic has grown enormously and expected to have a growth which would be above 25% in
the travel segment
In the present scenario 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
The growth of airlines traffic in Aviation Industry in India is almost four times above
international average
Aviation Industry in India have placed the biggest order for aircrafts globally
Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region
of South Asia

Road ahead..
Indias aviation industry is largely untapped with huge growth opportunities, considering that air
transport is still expensive for majority of the countrys 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 Indias 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.
Challenges
Initializing privatization in the airport activities
Modernization of the airlines fleet to handle the pressure of competition in the aviation industry
Rapid expansion plans for the major airports for the increased flow of air traffic
Immense development for the growing Regional Airports
Waving of tax exemption on leasing from government.
cost pressures ( ATF fuel and staff cost)
the Indian airports have a combined capacity to cater to 220.04 million passengers and 4.63
million tonnes cargo per annum . As per estimates, passenger traffic at Indian Airports is
expected to increase to 450 million and 10 million tonnes of cargo by 2020. therefore, massive
infrastructural facilities is the need of the hour.

FDI POLICY
100% Foreign Direct Investment (FDI) is permitted for Greenfield airport projects under the
automatic route.
Up to 74% FDI is permitted for existing airport projects under the automatic route, above
74% and up to 100% permitted under government approval route.
Up to 49% FDI is permitted in domestic scheduled passenger airlines under the automatic
route. 100% permitted for NRIs. Up to 49% FDI under the automatic route is permitted in
Non-Scheduled Air Transport Service. FDI above 49% and up to 74% is permitted under
Government approval route. 100% FDI permitted for NRIs.
Up to 100% FDI is permitted in helicopter services and seaplanes under the automatic
route.
Up to 49% FDI is permitted in ground handling services under the automatic route. FDI
above 49% and up to 74% is permitted under government approval route. 100% FDI
permitted for NRIs.
Up to 100% FDI is permitted in maintenance and repair organisations; flying training
institutes; and technical training institutes under the automatic route.
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.

Top players in industry

GROWTH DRIVERS
Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have
been completed successfully under Public Private Partnership (PPP) mode.
Greenfield airport at Navi Mumbai, Mopa (Goa) and some brownfield airports of
Airports Authority of India (AAI) and 50 airports under the low-cost model are to
be developed all over the country, including under PPP.
Indian aviation is experiencing dramatic growth across the board, from the
emergence of LCC/new carriers to a growing middle-class ready to travel by air
as well as growth in business and leisure travel.
Indias middle-income population is expected to increase from 160 Million in
2011 to 267 Million by 2016.
Greater focus on infrastructure development; increasing liberalisation Open Sky
Policy; AAI driving modernisation of airports, Air and Navigation Systems.
Growth in aviation accentuating demand for MRO (maintenance, repair and
overhaul) facilities.
Large scale collaborations/M&A deals Etihad Airways & Jet Airways; Tata Group
& Singapore Airlines, Tata Group & AirAsia.
India plans to increase the number of operational airports to 250 by the year
2030.