group 5_aviation industry

8/9/2019 Group 5_Aviation Industry

1/23

Aviation Industry

By :

Akshay Kohli(Roll No. 12006)

Himanshu Arora(Roll No. 12024)

Partha Pratim Das(Roll No. 12036)

Rohini Bagchi(Roll No. 12100)Rohit Jindal(Roll No. 12042)

Sandipan Sarkar(Roll No. 12045)

Shalin Kotia(Roll No. 12047)


2/23

Journey Of Aviation Industry in India

JRD Tatafounded 1st

Airline calledTATA Airline

1932

Air CorporationAct Nationalized allexisting Airlinesassets

EstablishedIndian Airlinesfor domestic

Air India forInternational

1953

Liberalization

Newdomesticplayers likeJet Airways,Air Sahara ,Modiluft and

NEPC Airlines

1991

Carriers with moreefficient operationsand strategiessurvived Air Saharaand Jet Airways

1997 1

st

No Frills Airlines Air Deccan

More Players like GoAirways,Paramount,Spicejet etc

2003


3/23

Governing Body

Department of Civil Aviation, a division of the IndiasMinistry of Civil Aviation and Tourism.

Formulates National Policies and Programmes for the

development and Regulation of Civil Aviation. Implements Schemes for orderly growth and expansion

of Civil Air Transport.

Airports Authority of India (AAI) manages airports

Directorate General of Civil Aviation regulation ofair services.


4/23

Industry Insights

Indian Aviation Industry is one of the fastestgrowing industries in the world ( 18 % in 2008, US$5.6 billion).

India is the 9th largest Aviation market in the world. The domestic airliners flew 3.67 million passengers

in August 2009.

26 % increase in domestic passengers flying in 2008.

30 % increase in passengers to/from India in 2008.Source : Business Maps of India.com


5/23

Major Players

Jet Airways & Jet Lite (previously Air Sahara)

Spice Jet

Indigo Kingfisher Airlines & Kingfisher Red

(previously Deccan Airways)

Go Air

Paramount Airways

NACIL


6/23

Market Share

S rc : si ss a s f I ia.c

Ki

gfish

r28%

J

t

25%

NACIL

16%

I

ig

14%

S

ic

J

t

12%

G

Air

3%

Para

a

t

2% DLR

0%


7/23

Increased FDIInflow

Surging

Tourist inflow

IncreasedCargo

Movement

SupportingGovt. Policies

Strong

EconomicGrowth

Why Aviation Industry grew ?


8/23

Supporting Government Policies for

the Private Sector Private sector participation will be a major thrust area in the civil

aviation sector for promoting investment, improving quality andefficiency and increasing competition.

Competitive regulatory framework with minimal controls will becreated to encourage entry and operation of private airlines/airports.

Private sector investment in the construction/ upgradations/operation of new as well as existing airports including cargo relatedinfrastructure will be encouraged.

Rationalization of various charges and price of ATF/AVGas will beundertaken to render operation of smaller aircraft viable so as toencourage major investment in feeder and regional air services bythe private sector.

Source : civilaviation.nic.in


9/23

Supporting Government Policies for

the Private Sector Contd. Training Institutes for pilots, flight engineers, maintenance

personnel, air-traffic controller, security will be encouraged inprivate sector.

Private sector investment in non-aeronautical activities likeshopping complex, golf course, entertainment park, aero-sports etc.

near airports will be encouraged to increase revenue, improveviability of airports and to promote tourism. CAA will ensure thatthis is not at the cost of primary aeronautical functions, and isconsistent with the security requirements.

Government will gradually reduce its equity in PSUs in the sector.

Government will encourage employee participation through issueof shares and ESOP.

Source : civilaviation.nic.in


10/23

FDI Norms

The 100% FDI route was allowed to promote

investments in airports and smaller flying

machines like helicopters and seaplanes.

The Government is thinking to allow 70-75

%FDI in Aviation.

Source : Economic Times dated 17th March, 2010


11/23

Year 2010 Projections

Domestic Air Traffic - 25 to 30 %

International Air Traffic 15 %

Source : Business Maps of India.com

100 million

passengers


12/23

Product Levels of Airline Industry

ProductLevels

Core Service :Transportation

SupplementaryService : Commonservices like food

onboard, gifts, tele

check in

Augmented Service :

New ways to meetcustomer demands.

E.g. Online booking

Future Service :

Like Supersonicspeed


13/23

Contd..

Mapping Domestic

Airlines to Product

Levels


14/23

Technological Advances

Modern Aircrafts are safer.

Economical to run.

Growth of Electronic Ticketing.

Mobile Digital Services to Customers.


15/23

Related Industries

Airport Retail

Taxis/Cabs


16/23

Airport Retail

Heating up as Retail Destination with retailers.

From food to clothes.

The increase in the amount of disposableincomes of people which has led to the increasein air travel making it one of the major reasonsfor the attraction of retailers to these locations

Changing holiday preferences.

T3 Terminal at IGI Airport Largest Retail Space inIndia.


17/23

Environmental Concerns &

Recommendations The environmental impacts of aviation are-

Aircraft Noise

Local Air Quality

Aircraft Engine Emissions

Disposal of expired aircrafts

New Fuel for Aircrafts : - It must have the following characteristics

High Energy Content , Good thermal stability at high temperature

Low freezing point, Good storage stability

Compatibility with the materials on the fuel system

Available anywhere in the world.

The only fuel which fulfills these requirements is KEROSENE.

The alternate fuels can be Synthetic Fuels and Bio Fuels.


18/23

Legal & Environmental Issues

Legal certainty to all the bilateral air services agreements

between India and EU.

Fastest growing cause for global warning.

EU aircraft emissions alone have risen by 87% since 1990.

High altitude nature of carbon and other airline emission.

Huge expansion in air traffic forecast in both Asia and

Europe, predominantly driven by low cost leisure travel.


19/23

Governmental Issues

Taxation issues relating to the civil aviation sector like sales tax on jet fuel are

likely to be raised with the government by industry body

FICCI.

Besides sales tax on aviation turbine fuel, the FICCI's newly-created committee

on aviation could also raise issues concerning import duties on aircraft forprivate use and those on spare parts and other aviation items meant for MRO

(Maintenance, Repairs and Overhaul) organisations.

The issues relating to development of heliports or roof-top helipads and heli-

corridors to duties on import of aircraft for general aviation or private use are

also of much concern.


20/23

Challenges faced by the Aviation

Industry Crippling oil shock.

Absence of Institutional Funding.

Acute shortage of trained Pilots, severely limiting growth prospects.

Unplanned location of Airports.

Competition amongst the LCCs.

Image plagued by frequent breakdowns and freak accidents.

LCCs already reached the threshold of cost efficiency.

Limited advertising.

High entry and exit barriers.Note: The aviation industry loses approximately Rs 2000 crores annually

due to under pricing of tickets and increasing fuel costs.


21/23

The Road Ahead.

The Indian aviation industry is the fastest growing

aviation industry and has seen rapid privatization

in the past couple of years due to liberalization.

The aviation industry is stated to grow at a rate of

25% till 2010 with 80% of the growth being

fuelled by the low cost carrier segment.

However, starting from around 2006-07, companies have shown losses.



22/23

The Road Ahead.

The passenger traffic is estimated to grow at a

CAGR of close to 15% over the next few years.

The Ministry of Civil Aviation says that it would be

handling close to 280 million passengers by 2020.

US$ 110 billion investment is envisaged till 2020

with US$ 80 billion solely for new aircraft and US$

30 billion for developing the airportinfrastructure.



23/23

Thank You !

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