Airline Industry

454 airports and airstrips 127 are owned & operated by AAI 16 - international, 7 custom airports, 28 civil enclaves Scheduled domestic air services - available from 82 airports May 2007- May 2008 25.5 million domestic & 22.4 million international passengers 20% growth highest in the world Growth Rate Projections (for next 5 yrs) 15% p.a (Passenger Traffic) 11.4% p.a (Cargo Traffic)

1911 first commercial flight airmails from Allahabad to nani (10 km) 1932 the aviation department of Tata sons ltd . Established 1946 Tata Air Lines converted into a public Company and renamed Air India Limited. 1948 Air India International incorporated 1953 Nationalization of Aircraft Industry Air India (serving the international sectors) Indian Airlines (serving domestic sectors) Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Kalinga Airlines, Indian National Airways and Air Services of India

1986 Private Sector Players permitted as Air taxi operators Players including Jet, Air Sahara, NEPC, East West, Modiluft, etc started service. 1990 Open sky policy. 1994 Private Carriers permitted to operate scheduled services. 2003 Entry of low-cost carriers. 2007 Merger of Indian Airlines into Air India Acquisition of Air Sahara by Jet Airways. Kingfisher acquired 49% stake in Deccan Aviation.

2008

Ministry of Civil Aviation Responsible for the formulation of policy, development and regulation of Civil Aviation. Its functions also extend to overseeing airport facilities, air traffic services and carriage of passengers and goods by air. Other Attached/Autonomous Organizations: Directorate General of Civil Aviation (DGCA) Promote safe and efficient Air Transportation through regulation and proactive safety oversight system. Bureau of Civil Aviation Security (BCAS) Regulatory authority for civil aviation security in India. Airport Authority of India (AAI) Accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports.

 

74 per cent FDI is permissible in cargo and non-scheduled . 49 per cent FDI is permissible in domestic airlines under the automatic route, but not by foreign airline companies. 100 per cent equity ownership by Non-Resident Indians (NRIs) is permitted.

 

100 per cent tax exemption for airport projects for a period of 10 years. Private developers allowed setting up of captive airstrips and general airports 150 km away from an existing airport

For existing airports, FDI up to 74 per cent is permitted through automatic approvals and up to 100 per cent through special permission (from FIPB).

100 per cent FDI under automatic route is permissible for greenfield airports.

Competitive Pressure Service Low cost Carriers changing the game

Indigo

Price

India Airlines Passengers Carried This was largely due to the general economic slowdown, which saw corporate travel budgets slashed. Airline companies were further burdened by the 19% hike in Aviation Turbine Fuel (ATF) at the end of May 2008.

Market Share of Aviation Industry in Feb 2011

PEST ANALYSIS
POLITICAL FACTORS - Liberalization of the Sector - Excise Duty and Sales Tax on Aviation Turbine Fuel - Modernization of Airports - Interface form Other Agencies - Entry Barriers for New Players

ECONOMIC FACTORS
- Contribution to Economy - Rising Fuel Costs - Investments in the Sector

SOCIAL FACTORS - Developments in Airport Cities - Employment Opportunities - Ensuring a Level Playing Field - Safety Regulation

TECHNOLOGICAL FACTORS
- Growth of Electronic Ticketing - Satellite based Navigation Systems - Technical Cooperation with EU