AVIATION INDUSTRY IN INDIA

Sector structure/Market size Fastest growing aviation industries in the world Many overseas players entering the market and the industry has been growing both in terms of players and number of aircrafts 9th largest aviation market in the world Private airlines account for around 75 per cent share of the domestic aviation market.

DOMESTIC AIRLINES

Air India Go Air Airlines Indigo Airlines Jagson Airline Jet Airways Jet Airways Konnect Kingfisher Airline SpiceJet Airlines JetLite (Air Sahara) Kingfisher Red (Air Deccan) MDLR Airlines

 State owned domestic airlines ((earlier Tata Airline) ) Formerly known as Indian Airlines GoIs plan to merge Air India and Indian airlines into one

giant airline consisting of 130-140 aircraft

Regular airline offering normal economy and business class

seats. 300 flights, 43 Indian destinations Does not own its brand. Brand owned by Jetair Enterprises Ltd. a separate company substantially owned by Naresh Goyal

Low-cost airline (LCC) Began in May 2005 Entered with Rs. 99 fares for first 99 days Offering low everyday spicy fares Aim: Compete with Indian Railways AC sgment GoAir The Peoples Airline established in June 2004 LCC promoted by The Wadia Group GoAir FreeFares Relatively small player as compared to other LCCs Initial flights in southern & western India with the first nine A320s

Services started in May 05 Initially operates only on domestic routes but now in overseas also. Owned by United Beverages Group under the leadership of Vijay Mallya

MARKET SHARE
Jet Airways and Jet Lite (previously Air Sahara) Kingfisher Airlines and Kingfisher Red (previously Air Deccan) Indigo Air India (previously Indian Airlines) SpiceJet GoAir
24.8%

19.5%

19.2% 15.8% 14.3% 6.4% Jet Airways Kingfisher Airlines Air India IndiGo SpiceJet GoAir

MANAGING AUTHORITY IN INDIA

DGCA controlled every aspect -

Including granting flying licenses, pilots, certifying aircrafts for flights AAI manages all airports Over 128 airports and 1091 aircrafts

At Present
AAI manages 128 airports which includes:
- 15 International airports - 8 Custom airports - 25 Civil Enclaves - 80 Domestic airports

Aviation industry and Indian Economy

16 years back there were just 2 airlines, Both state owned.

The main factors which effect the Indian Economy are:1. Increased no. of domestic airlines 2. Low cost airlines 3. India's improving economy the other factors are:1. Increased in no. of business travellers to different countries 2.Incresed no. of incoming tourist and business enterprises

CURRENT SCENARIO
India ranks fourth after US, China and Japan in terms

of domestic passengers volume Top 5 airports of country handle 70% passengers All airports handled 90.44 million passengers in 2010 Domestic passenger and cargo traffic recorded a growth rate of 44.6% and 8.7%. Intl. passenger and cargo traffic recorded growth rates of 15.8% and 13.8%

Some Challenges which faced by aviation industry in India

Trunk Routes Excess Capacity

High Debt Burden

Not fully exploited Inability to realize the full potential Invite d the new players
New aircrafts bought within a short span of time Aircrafts delivered during recession Raising significant amount of capital A cumulative debt burden of approximately $8 billion.

Poor Infrastructure

Major constraint Aggravated due to excess capacity Need Attractive Investment Aircraft noise, including night noise, is associated with sleep disturbance adverse health effects

Noise Emission

Shortage of No capacity to land two same time. Airport flight atcapacity plague Excess Facilities the industry

Govt. Policy Training to Staff

Competition

Environmental clearance Land Acquisition policy Some exemption in Tax

Shortage of Technical staff providing training to manpower
Industry grew above 40% Primarily stimulated due to low fares Maintaining such low levels of fares is a challenge

Costs pressures
Sources of Investment
Unstable Economic Scenario

ATF Prices Staff Cost

Need for FDI Allowing loans on conditional ease Reduction in business tours Low per capita

EMERGENCE OF CHALLENGES
Indian aviation industry expected to grow two to

three fold by 2020 3,000 Crore would be needed for the development of airports Rs 8,000 crore would be required for airlines Number of passengers is likely to increase to 400450 million by 2020 but present 110 m Number of scheduled aircraft is estimated to go up to 1,000-1,500 from 600 at present Rising Prices of ATF

CONCLUSION
Indian Airline Industry was one of the fastest

growing Airline Industry across the world during the last decade.

However, skyrocketing fuel prices, economic

slowdown, slashed corporate travel budgets over the last 3 years has forced all Indian Airlines to rethink their business model.

SOURCES
Times of India reports

business.mapsofindia.com
Wikipedia.com