ESSAY

100 YEARS OF CIVIL AVIATION IN INDIA

ABHISHEK DIXIT

The history of civil aviation in India began in December 1912. This was with the opening of the first domestic air route between Karachi and Delhi by the Indian state Air services in collaboration with the imperial Airways, UK, though it was a mere extension of LondonKarachi flight of the latter airline. Three years later, the first Indian airline, Tata Sons Ltd., started a regular airmail service between Karachi and Madras without any patronage from the government. At the time of independence, the number of air transport companies, which were operating within and beyond the frontiers of the company, carrying both air cargo and passengers, was nine. It was reduced to eight, with Orient Airways shifting to Pakistan. These airlines were: Tata Airlines, Indian National Airways, and Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Ministry Airways. In early 1948, a joint sector company, Air India International Ltd., was established by the Government of India and Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. Its first flight took off on June 8, 1948 on the Mumbai (Bombay)-London air route. At the time of its nationalization in 1953, it was operating four weekly services between Mumbai London and two weekly services between Mumbai and Nairobi. The joint venture was headed by J.R.D. Tata, a visionary who had founded the first India airline in 1932 and had himself piloted its inaugural flight. Significance of Air Transport Air transport is the most modern, the quickest and the latest addition to the modes of transport. Because of speed with which aeroplanes can fly, travel by air is becoming increasingly popular. As far as the world trade is concerned it is still dominated by sea transport because air transport is very expensive and is also unsuitable for carrying heavy, bulky goods. However, transportation of high value light goods and perishable goods is increasingly being done by air transport Nationalization of Airlines The soaring prices of aviation fuel, mounting salary bills and disproportionately large fleets took a heavy toll of the then airlines. The financial health of companies declined despite liberal Government patronage, particularly from 1949, and an upward trend in air cargo and passenger traffic. The trend, however, was not in keeping with the expectations of these airlines which had gone on an expansion spree during the post-World War II period, acquiring aircraft ad spares. The Government set up the Air Traffic Enquiry Committee in 1950 to look into the problems of the airline. Though the Committee found no justification for nationalization of airlines, it favoured their voluntary merger. Such a merger, however, was not welcomed by the airlines.

Foreign Airlines Foreign airlines carrying international passenger traffic to and from India existed long before Independence. Their operations are governed by bilateral agreements signed from time to time between the Government of India and the governments of respective countries. In 198081, the number of such airlines was 35. It rose to 49 in 1996-97. The share of foreign airlines in India's scheduled international traffic has increased. In 1971, their share was 55.58 per cent which went up to 65 per cent and declined to 58 per cent during 1972-75. It fell to 55.72 per cent in 1976 and further to 55.02 per cent in 1977. Between 1978 and 1990 it gradually increased and rose to 75.93 per cent. In 1996, the share was nearly 72 per cent. Open-Sky Policy The Open-sky policy came in April 1990. The policy allowed air taxi- operators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. The operators were, however, required to use aircraft with a minimum of 15 seats and conform to the prescribed rules. In 1990, the private air taxi-operators carried 15,000 passengers. This number increased to 4.1 lakh in 1992, 29.2 lakh in 1993, 36 lakh in 1994 and 48.9 lakh in 1995. The 1996, private air taxi operators carried 49.08 lakh passengers which amounted to a 41.14 per cent share in the domestic air passenger traffic. Seven operators viz NEPC Airlines, Skyline NEPC, Jet Air, Archana Airways, Sahara India Airlines, Modiluft and East West Airlines have since acquired the status of scheduled airlines. Besides this there were 22 nonscheduled private operators and 34 private operators holding no-objection certificate in 1996. The number of plus 120 category aircraft in the private sector was 34 and the total fleet strength was 75 in June, 1996. Two out of seven scheduled air taxi operators suspended their operations in 1996 because of the non-availability of aircraft. Infrastructure and Related Facilities Airport Authority of India: set up on April 1,1995 by amalgamating the international Airport Authority of India and the National Airport Authority of India, the Airport Authority of India was to handle all matters relating to infrastructure for civil air traffic and transport at the international and the domestic airports and enclaves in the country. Indira Gandhi Rashtriya Uran Akademi: It was set up at Fursatganj to standardize and improve the flying training facilities in the country. Till January 1997 it had trained 289 pilots on fixed wing aircraft and 20 pilots on rotary wing aircraft. Flying/gliding training clubs: On December 31, 1996, besides the above Academy, 41 flying clubs/institutes and their branches including nine private institutes were imparting flying training. Five gliding clubs, seven gliding wings of flying clubs and a government Gliding Centre, Pune, were imparting training in gliding.

Development of Civil Aviation The repeal of the Air Corporation Act from 1 March 1994 enabled private operators to provide air transport services. Six operators were given the status of scheduled operators on 1 February 1995.Currently there are five international airports and 87 domestic airport in the country with 28 civilian enclaves for defence purposes. The Airport Authority of India plans to invest Rs 35,000 million for the construction and up gradation of airports. Budgetary support of Rs 485.50 million was allocated to AAI in 1996-97. In august 1996, in a major policy decision, the government allowed the private sector to set up air cargo complexes in a bid to ensure smooth movement of export cargo. Domestic and foreign investors including NRIs have been invited to participate in the development of infrastructure support at select airports. With a market share of 43% Indian airlines is the biggest player in aviation. Rs 24,710 million have been marked for development of the civil aviation sector in the annual plan for 1997-98. The Indian Air cargo Market The growth of air cargo in India has also been manifold though it might not have kept pace with the progress made all over the world. Table 1 shows how both international and domestic air cargo traffic has increased, reflecting an overall year on year growth. Future Outlook Of The Industry Future projections reflect that the air cargo industry both in the domestic sector and the international sector will continue in its upward trend of growth. It reflects that the domestic air cargo will continue at a somewhat steady rate of growth whereas the international air cargo movement shows a steeper rate of growth indicating that international air cargo trade will flourish at a higher rate of growth. India, ranked tenth in the world in 2004, is expected to be holding eighth rank in the world by 2014 and fourth rank in next years with a GDP of $1.15-1.4 trillion and $2.1-3 trillion respectively, and a projected growth rate of 68%. Effect: This rise in income levels along with introduction of no-frills flights will lead to rise in no. of travellers, more investments in aviation, more competition and rise in industrialization leading to more need of air transport SOCIO-CULTURAL ENVIRONMENT Change in Lifestyle Average income of middle class household is expected to rise to 194000 Rs by 2010 from 169000 Rs in 2001-02.No of households projected to be 43.6million in 2010. Effect: So there is going to be change in lifestyle and spending of people Due to this change people will prefer Low cost airlines instead of Railways first air conditioned thus rise in air traffic. Rise in Leisure travel Tourism industry grew 8.8 per cent over 2003- highest growth rate in the world. 3.2 million Foreign tourists visited India last year. There has been an increase in leisure travel by tourists of 15% in 2004. It will lead to rise in no. of tourist passengers thus more encouragement for new operators.

TECHNOLOGICAL ENVIRONMENT Introduction of Airbus A380 The double deck Airbus A380 is the most ambitious civil aircraft program yet was launched in December 2000. An all new design Superjumbo, the Airbus A380 is the world's first twin-deck, and twin-aisle airliner. It could be outfitted for special passenger uses such as sleeper cabins, business centres or even child care service. In a one-class configuration, the A380 could accommodate as many as 840 passengers Advantages of the A380 include lower fuel burn per seat and lower operating costs per seat. Airbus states the A380 will use 20% less fuel and will fly quieter, cheaper and more environmentally friendly than the 747 ILS-Instrument Landing System Instrument landing system (ILS) facilities are a highly accurate means of navigating to the runway under low visibility conditions Various runway environment lighting systems serve as integral parts of the ILS system to aid the pilot in landing When using the ILS, the pilot determines aircraft position by instruments. ILS is classified according to capabilities of the ground equipment. Category I ILS provides guidance information down to a decision height (DH) of not less than 200 ft. improved equipment (airborne and ground) provide for Category II ILS approaches. DEMOGRAPHIC ENVIRONMENT (Changing Structure of Consumers) Middle class population of India was 300 million in 2005 and is projected to be 400 million for 2010. Effect: For aviation, this growth is a remarkable achievement and a sign that the industry can only expand as more people gain the ability to purchase airline travel, supported by introduction of low-cost carriers. High %age of young population India has highest percentage of people in age group of 20-50, with high earning potential. Also younger segment has more mobility needs due to education or work, so it shows high probability of rise in Domestic air travel. Higher number of literates Due to rise in education awareness, there has been rise in no. of graduates and those pursuing higher studies. Which translates into higher earning potential and higher spending on travel in future? Nuclear Families Due to lesser number of joint families and increasing nuclear families, there would be rise in air travel by children to meet their grandparents. FUTURE OF INDIAN AVIATION According to A World Travel and Tourism Council report, India will be the fastest growing travel market in the world over the next decade (Financial Express, 2001). The study expects the Indian travel market will triple to $51 billion by 2011 from the $16.3 billion currently. Air Travel in India grew by 20% last year and Boeing has raised its 20 year market forecast for Aircraft purchases from $ 25 Billion to $ 35 Billion. More than 3 million Tourists visited India last year and the tourism industry grew by 8.8% YOY, highest in the world. The International Airlines are vying with each other and planning to increase their frequencies three fold. Apart from this various schemes are being used to attract more and more customers and also attract the customers of AC classes of Trains. Some of the methods that are being used are as follows: Low Price Tags Apex Fares Internet Auctions Bulk Purchases Last Day Fares.

GROWTH INDICATORS World Passenger traffic grew to 52.12 million in the last fiscal, from 43.47 million in 200405, to register a growth of 19.9 percent. Robust growth of 24 % in last fiscal in Indian Aviation Industry. Sector expected to expand by at least 16% annually for the next 5 years, riding on the overall economic growth of 8%. Forecast: Growth In Air Traffic Surging Air Traffic in Indian Metros

EXPANSION PLANS The Burgeoning industry also demands fleet acquisition. Boeing has raised its 20-year market forecast for India for aircraft purchases from US$ 25 billion to US$ 35 billion. Both Airbus and Boeing are waiting for the next big order, expected from Air India. The airline is evaluating medium and large capacity aircraft and is expected to order 50 wide-body jets, worth almost $5 billion at list prices. Airbus has been the beneficiary of a large chunk of the new orders announced in 2004. The European consortium will sell about 100 planes to Indian Airlines, Air Deccan and Kingfisher Air, and now says it wants to give something back to India by setting up a state-of-the-art training cum Maintenance centre. The company is awaiting government clearance for Indian Airlines' $4 billion order for 43 Airbus aircraft, a decision that was made two years ago. ROADBLOCKS Infrastructure Constraints Shortage of Pilots Obsolete Navigation Facilities Inadequate Safety Norms Congestion Problems High Operating Co POSITIVES Greenfield airports Bangalore/Hyderabad J/Vs for Ground Handling and MRO facilities highly advanced GPS aided Geo augmented navigation (GAGAN) system operational this year. AAI set up more radar stations to bring entire Indian airspace under radar monitoring. Training more Pilots and Air Traffic Controllers. Raising retirement age of pilots to 65 from 61. NEW ENTRANTS The aviation sector is likely to see the launch of many new airlines, including: Premier Airways Star Air East West Airlines Indigo Jagson Magic Air Indus Air. FUEL PRICES The government has raised the fuel prices by 7.5% in January 2006.Prices increased from Rs. 32.56 a litre to Rs. 35 litre. Aircraft Fuel forms a major chunk of the revenue and hence any changes in the fuel prices effects the revenues in a major way.

Rise in ATF Prices (Rs/Kg) A possible way of dealing with these rising fuel prices is FUEL HEDGING which as used extensively and very successfully by Southwest Airlines. They booked Future options of fuel and hence even when the fuel prices soared, they were able to procure fuel at very handsome prices. RECOMMENDATIONS Some recommendations to deal with the inefficiencies as suggested by WTC report are as follows: Allow all Indian Carriers, Public or Private-to operate International routes. Lower the cost of aviation turbine fuel. Lower the Landing and airport charges. Strengthen and promote short haul tourism for business development, trade and tourism. Encourage of Proactive involvement of overseas investors and technical managers in the privatization of airports. Encourage commercial activities within airports such as hotel, restaurants etc. Ensure a healthy growth in traffic to the private airports.

TOTAL WORDS: - 2467

Pawan Hans Helicopters Ltd. All India / painting competition Declarartion of originality of the essay / painting
1. I Abhishek Dixit certify that the details mentioned below are true in my respect. 2. I declare/ that attached English essay is self written and not previously published nor sent for publication. I will not use it anywhere till the results of the competition. 3. My mother tongue is Hindi. 4. I Abhishek Dixit am a citizen of india.

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