INDIAN AVIATION

INDUSTRY

ARE YOU
READY TO

OVERVIEW

Indias civil aviation industry is on a high-growth

trajectory. It is currently the ninth-largest civil aviation
market in the world, with a market size of around US$
16 billion.
India, the fastest-growing aviation market in the world.
Catered to 190 Million passengers in 2015.
60 Million international passengers by 2017.
90 international airlines connecting over 52 countries.
Estimated profit of USD 1.29 billion in FY2016

VISION

India aims to become the third-largest aviation

market by 2020 and the largest by 2030.
Low Cost Carriers(LCCs)
Modern Airports
FDI
Advanced Information Technology
Growing regional Connectivity

TOP PLAYERS IN DOMESTIC MARKET

INDIGO
JET AIRWAYS
SPICEJET
AIR INDIA
GO AIR
OTHERS

New entrants like AIR ASIA, AIR

INDIA EXPRESS, AIR COSTA &
VISTARA AIRLINES

INVESTMENT
OPPURTUNITIES
Joint venture between TASL and Boeing to establish a
centre of excellence for manufacturing aero
structures.
Boeing plans to assemble one of its two helicopters
namely, Chinook in India, thus becoming yet another
global company to invest in India encouraged by the
Make in India campaign.
Airbus plans to open aircraft MRO facility in India and
to source products worth US$ 2 billion cumulatively
over the next five years.
300 business jets, 300 small aircraftand 250
helicopters are expected to be added to the current
fleet in the next five years.

GOVERNMENT INITIATIVES
Fostering of PPP models
AAI to revive and operationalize around 50 airports in India.
Proposition to raise FDI limit in domestic airlines from 49%to
over 50%. Reforms such as tax incentives for airlines, incentives
for travellers to fly to small towns at affordable rates.
The DGCA has given its approval to Air Indias MRO unit.
committee comprising bankers, aviation experts and technocrats
to help turn around and privatize the national airline, Air India.
The Government of India approved a proposal to set up a second
airport in NCR.
The Government to finalize the new aviation policy and revised
international flying norms for domestic carriers soon. May
remove the 5/20 norms for domestic airlines in this new policy.

FDI IN INDIAN AVIATION

100% Foreign Direct Investment (FDI) for Greenfield airport

projects.
Up to 74% FDI for Brownfield airport projects.
Up to 49% FDI for passenger airlines
Up to 100% FDI in helicopter services and seaplanes.
Up to 49% FDI in ground handling services.
Up to 100% FDI in maintenance and repair organisations; flying
training institutes; and technical training institutes.
NOTE -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.

FOREIGN INVESTORS
Airbus (France)
Boeing International Corporation (USA)
Air Asia (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)
Etihad airways (Abu Dhabi)
Singapore airlines (vistara airlines)
Total energy

ROLE OF AVIATION INDUSTRY IN

INDIAN ECONOMY
Entry of private operators and huge cut in air
travel prices has made air travel in India popular.
Air traffic has grown enormously and expected to
have a growth which would be over 20% in
coming years.
Presently 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 bringing in more FDI.
The growth of airline traffic in India is almost
twice the global average.

Airline Business Strategies

Service time
and its
Deregulation
corresponding
price
Basis
Market
penetration

Pricing
strategy

Pricing Strategy
The most commonly pricing model used in airline
industry is dynamic pricing model.
The components of pricing strategy are :

Pricing
strategy
Segmented
pricing
Service
time

Time of
purchas
e

Peak
user
pricing

Changin
g
conditio
ns

Limitations
Low profit
margins

Increasing
consumer
expectations

Cost
reduction &
improved
operational
efficiency

Shifting
airline
landscape

Recommendations
Get to
know your
customers
better

Digitalizati
on

Cut the
fat, not
the
muscle

Partner
strategical
ly

Strategic Alliances
Some examples of strategic alliances : Etihad Airways and Jet Airways
Tata and Malaysian Airlines (Vistara Airlines)
Star Alliance Members
Skyward Alliance
Pro-jet
ADVANTAGES

DISADVANTA
GES

Extende
d
network

Higher
prices

Cost
reductio
ns

Lesser
frequenc
y

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.

THE END