Aviation Industry

BY-JS CHEEMA (LPU)

Overview of Airlines industry in India

The open sky policy of the government has helped a lot of overseas players entering the aviation market in India At present, private airlines account for around 75% portion of the domestic aviation market. 9th largest aviation market in the world is India. 12 domestic airlines and above 60 international airlines

Holds around 69% of the total share of the airlines traffic in the region of South Asia

CLASSIFICATION OF THE AVIATION SECTOR

Scheduled air transport service- is air transport service undertaken two or more places & operated according to a published timetable Non-scheduled air transport service is air transport service other than the scheduled one & may be on charter basis. The operator is not permitted to publish time schedule & issue tickets to passengers

Air cargo services is It is an air transportation of cargo & mail. may be on scheduled or non-scheduled basis. operations are to destinations within India. For operation outside India, the operator has to take specific permission of DGCA

Market share of Indian carriers as on June 2011:

REGULATORY ENVIRONMENT
Federation Directorate Ministry Airport Civil

of Indian Airlines (FIA) General of Civil Aviation (DGCA)

of Civil Aviation (MCA)

Authority of India (AAI)

Aviation Policy
Skies Agreement

Open

PESTEL

Political- Govt. are not stable Economy --Disposable income is increasing. --GDP growth near 8% Social -- Status conscious --Awareness is increasing

Technology- Indigenous technology is coming for aircrafts and airports Legal Flexibility in entry

Environment

- Poaching - FDI

Getting global
Bilateral Treaties 99 per cent of Members of the International Civil Aviation Organization (ICAO) follow the system of negotiated bilateral treaties considered the fundamental basis for a disciplined and regulated aviation system.

Indian Bilateral Treaties India has signed over 180 Bilateral Agreements with different countries.

Utilization of Bilateral Treaty Contracts Shortfall creates pressure on seats, during peak tourism national carriers do not have sufficient aircrafts and enter into commercial and code sharing arrangements to maximize revenue. http://dgca.nic.in/int_coop/icg_main.htm

Study of Consumer Demand in the industry The Potential Market

Large corporate and luxury travel market.

Large low-fare market.

India also has largely blocked but significant markets in the north in China. India, unlike other major travel hubs in the region, is an original market both for originating and turnaround traffic.

India is also a potential transit hub in more than one direction.

Use of Internet can save cost of Airlines

Challenges to act global

Rising ATF prices in India compared to global prices which accounts for major operating cost High taxes imposed by State govt.s

ATF cost / kilolitres : US $ 755 in New Delhi US $ 780 in Mumbai US $ 450 in Singapore

Tax on interest repayments on foreign currency loans Increasing manpower cost due to shortage of technical personnel

THANK YOU