Aviation Industry

Group 6: Prateek Deepika Romi Deepak Mehul

About the Industry

1. Carries out wide range of services related to air transportation. 2. Expanding Indian economy & increased demand for trade has pushed the need for aviation services to a new height. 3. Increasing number of private entrants in the sector

History of Civil Aviation

First domestic air route between Karachi and Delhi Year : February 18, 1911

Indian State Air Services + Imperial Airways, UK

Air India- The Formation

Founded by J. R. D. Tata in July 1932 as Tata Airlines Tata Airlines became a public limited company on 29 July 1946 under the name Air India. In 1948,

25 August 1953, the Government of India exercised its option to purchase a majority stake in the carrier and Air India International Limited was born

Air India: Rise of the Monopoly

In 1953 Nationalization of all assets Air India has had 30 Years of undisputed control over the Indian skies. Air India had the third largest share in India's domestic air travel market In 2007 Government of India announced that Air India would be merged with Indian Airlines

The Turning Point

Open Sky Policy: The Government in 1990 allowed air taxi- operators to operate flights from any airport, (both on a charter and a non charter basis) The Air Corporations (Transfer of Undertaking and Repeal) Act, 1994 ended monopoly of Air India. Private Players get entry: - FDI stake up by 49% stake - NRI investment hiked up to 100%

Controlling Authorities
Ministry of Civil Aviation
National Aviation Company of India Limited (NACIL)
Airports Authority of India (AAI) Pawan Hans Helicopters Limited (PHHL)

Directorate General Of Civil Aviation

Bureau Of Civil Aviation Securities

Nationalization
Nationalization of Indian Airlines (IA) in 1953 brought the domestic civil aviation sector under the purview of Indian Government Government's intervention in this sector was meant for removing the operational limitations arising out of excess competition.

This sector has mad substantial contribution towards the development of trade & tourism in the country

Liberalization
Government of India progressively relaxed restrictions allowing domestic airlines to operate schedule services in India. International air links with India also witnessed major growth over the years. In 2003, the government allowed private domestic airlines to operate services to SAARC nations through an open skies agreement
***South Asian Association for Regional Cooperation

PESTAL
Political: Government is not stable
Economic: the disposable income of the people in the economic is increasing Social:

Technical: There has been considerate advancement in technology with time Legal: Flexibility in entry
Environment: Stiff competition in the industry . Especially in hiring & training has become a tedious process.

Current Passenger Situation

Airline-wise Market Share - Year 2011
Spice Jet 14%
Air India 16%

Go Air 6%

IndiGo 20% Kingfisher 18%

Jet Airways 18%

Jet Light 8%

Turbulent Sky: The Challenge

Indian aviation industry is plagued with several problems: Include high aviation turbine fuel (ATF) prices Rising labor costs and shortage of skilled labor Intense price competition among the players Rising competition- entry of foreign companies Falling demand- pertaining to unstable economy Infrastructural constraint

Shaping Aviations Future: IATAs Vision IATA estimates that some 16 billion By 2050,
passengers and 400 million tonnes of freight will need to be flown yearly. To prepare the industry for the future, IATA is working on an ambitious plan, Vision 2050, based on four pillars. - Structuring for profitability - Sufficient and efficient infrastructure - Sustainable technology to power the industry - Capability to meet customer needs in future

IATA: Annual General Meeting 2011

67th IATA Annual General Meeting (AGM) and World Air Transport Summit was held in Singapore from 5 to 7 June 2011 IATA suggested that The industrys major focus in the coming years would be more on passengers. To evolve from the financial disaster of a partial deregulation that has created fierce competition among airlines

Crisis at Kingfisher
Kingfisher has been in facing crisis: Kingfisher Airlines has delayed salaries of its employees in Aug 2011. The management stated that it does not have the money as the bank accounts of the company had been frozen.

ATF dues for HPCL & BPCL

Since 2008, it has been reported that Kingfisher Airlines has been unable to pay the aircraft lease rentals on time

Quarterly Results of Kingfisher

Quarterly Results Kingfisher Airlines ---In Rs Crores--Sep '11 Jun '11 Mar '11 Dec '10 Sep '10

Sales Turnover
Other Income Total Income Total Expenses

Operating Profit
Total Extraordinary Income/Expenses

1,528.17 102.09 1,630.26 1,900.14 -371.97 -10.97

-269.88 334.38 -615.23 78.53 -693.76 -285.07 -408.69

1,881.64 29.37 1,911.01 1,906.38 -24.74 -4.79

4.63 305.8 -303.56 86.55 -390.11 -126.57 -263.54

1,677.64 -58.48 1,619.16 1,700.23 -22.59 -81.95

-81.07 289.85 -452.87 61.88 -514.75 -159.21 -355.54

1,658.70 17.29 1,675.99 1,635.79 22.91 -19.19

40.2 339.6 -318.6 61.28 -379.88 -126.19 -253.69

1,382.72 132.94 1,515.66 1,461.19 -78.47 -1.51

54.47 362.26 -309.3 52.99 -362.29 -131.47 -230.82

Gross Profit
Interest PBDT Depreciation PBT Tax

Net Profit

Graphical Representation the Quarter

Loss for September 2010 is shown to be 230.82 The loss has been gradually increasing over the quarters. The loss has been greatly reflected over a years period and has increased to -408.69
Net Profit
0

-50

-100

-150

Axis Title

-200

-250

-300

-350

-400

-450 Net Profit

Sep '11 -408.69

Jun '11 -263.54

Mar '11 -355.54

Dec '10 -253.69

Sep '10 -230.82

Thank You