Mini project report

On
“THE ISSUES AND CHALLENGES IN AVIATION INDUSTRY”

Submitted in partial fulfillment of the requirements for the award for the degree
of
Master Of Business Administration

Submitted to: Submitted by:

DR. PRAVEEN KUMAR AGRAWAL KISHAN MOHAN TIWARI
MBA 2 ND SEM
SECTION B
ROLL NO. 24
ID: 13200222

UNITED INSTITUTE OF MANAGEMENT

UPSIDC INDUSTRIAL AREA NAINI, PRAYAGRAJ, U.P. 211010

1
 UNITED INSTITUTE OF MANAGEMENT
A-31 UPSIDC Industrial Area, Naini, Prayagraj – 211010
Ph. 0532–2686070. 2686090 Fax 0532-2687147

Certificate
Mini Project Report – 2, AY 2020-21

This is to certify that Mr. KISHAN MOHAN TIWARI, Roll No. 24 student of MBA 2 nd
Semester of our institute has prepared a report on the

Topic THE ISSUES AND CHALLENGES IN AVIATION INDUSTRY

He / she has worked on identifying the issues & challenges as well as the
application of emerging technologies in the above industry, under my supervision
and has completed the same in conformance with / partial fulfillment of the
provisions of AKTU, Lucknow.

The work is original and has not been submitted anywhere else in any manner.

Signature……………………………………………..
Name
Mr./Ms./Dr…………………………
Date……………………………………………………..
Department of Business
Administration

Counter signed

Signature…………………
(Prof K K Malviya)
Principal
2
Date…………..……..……
 DECLARATION
I Kishan Mohan Tiwari, a Student of MBA (2020-2022) Studying At United Institute Of

Management (011) Prayagraj, U.P. Solemnly Declare That This Project on the Topic-

“THE ISSUES AND CHALLENGES IN AVIATION INDUSTRY”

Was Carried Out By Me In Partial Fulfillment Of Mini Project In MBA Program.

This Program Was Undertaken As A Part Of Academic Curriculum According To The

University Rules And Norms And By No Commercial Interest.

Place: Prayagraj

Date:

KISHAN MOHAN TIWARI

3
 ACKNOWLEDGEMENT

It Is A Matter of Great Pleasure to Thanks All Esteemed Who Helped Me to Complete My

Final Research Project Successfully Otherwise It Would Not Been Possible.

Acknowledgement Is Not Only A Ritual But Also an Expression of Indebtedness to All Those

Who Have Helped In the Completion Process of the Project One of the Most Pleasant

Aspects in Collecting the Necessary and Vital Information and Compiling It, Is The

Opportunity To Thanks All Those Who Activity Contributed To It.

I Would Like To Express My Deepest Gratitude And Thanks To PROF. KK. MALVIYA

(PRINCIPAL UIM), MR. VISHNU PRAKASH MISHRA (HEAD OF DEPARTMENT UIM)

And Project Guide DR. PRAVIN KUMAR AGRAWAL and project faculty PROF. ATUL

STANLEY HERMIT for the Valuable Guidance and Constant Encouragement, Which Extend
To

Me through My Research Project.

KISHAN MOHAN TIWARI

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5
 CONTENTS
S. No. PARTICULARS PAGE NO.

1. INTRODUCTION 6

2. OBJECTIVE OF THE PROJECT 10

3. REVIEW OF LITERATURE 11

4. INDUSTRY OVERVIEW 19

5. ISSUES AND CHALLENGES 26

6. APPLICATIONS TO RESOLVE 30
ISSUES

7. SUGGESTIVE STRATEGIES 36

8. LEARNING OUTCOMES 37

9. RECOMMENDATIONS 38

10. BIBLOGRAPHY 39

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 INTRODUCTION

Aviation industry is the business sector that manufactures, maintains, and operates the aircrafts

and the airports. When it comes to aviation, there is a broad range of responsibilities within. It

comprises activities at the airport as well as in the aircraft. It involves ground duties that are

required to perform before the flight takes off, the activities during the flight, and the activities

after it lands.

What is Aviation?

The term aviation, was coined by a French pioneer named Guillaume Joseph Gabriel de La

Landelle in 1863. It originates from the Latin word avis that literally means bird. Aviation

means all the activities related to flying the aircraft.

What is Aviation Management?

Aviation management involves managing the workflow of airline, airport, or other businesses

pertaining to aviation or aerospace industry by carrying out the day-to-day operations of an

airport or an airline.

A Brief History of Aviation

The original idea of kite-flying from China was the first attempt of humankind to fly some man-

made object high into the air. Chinese used kites to send messages, lift humans, measure

distances, and test winds during the 5th Century to the 7th Century AD. They also prepared Hot

Air Balloons to scare away enemies in the 3rd Century BC. Later during the period of

Renaissance, Leonardo Da Vinci studied the flying principles of birds and anticipated that the

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equal amount of resistance is offered by an object to the air, just as the resistance air offers to

the object.

During the 17th century, the then experts tried to create copper spheres containing vacuum and

lift an airship as they knew by then that the objects lighter than the air can remain up in the air.

During the 18th Century, they conducted five flights using balloon successfully in France. In

1647, the Polish King Władysław-IV invited the Italian inventor, Tito Livio Burattini to his

court in Warsaw and built a model aircraft with four fixed glider wings. The aircraft had

successfully lifted a cat with minor injuries while landing.

During the 19th and the 20th centuries, the experts around the world experimented continuously

and came up with improved flying machines or aircrafts, which were heavier than air and based

on the principles of aerodynamics. Most notable names are the Wright Brothers — Orville and

Wilbur Wright. According to the Smithsonian Institution and Federation Aéronautique

Internationale (FAI), the Wright brothers made the first sustained, controlled, powered, and

8
heavier-than-air fight at Kill Devil Hills, North Carolina on December 17, 1903. Orville Wright

took the first flight at 120ft high for 12 seconds.

Major Regulating Bodies in Indian Aviation Industry

The Ministry of Civil Aviation (MoCA) of Government of India is responsible to formulate

policies and programs to develop and regulate civil aviation, and to implement the schemes for

expanding civil air transport. It also oversees airport facilities, air traffic services, and air

carriage of passengers and goods.

An Indian regulatory body for civil aviation named The Directorate General of Civil Aviation

(DGCA) is under the MoCA. This directorate investigates aviation accidents and incidents.

Important Factors Driving Civil Aviation

The following are some most important factors that drive civil aviation −

 The Low Cost Carriers (LCCs), modern airports

 Emphasis on regional connectivity

 Foreign Direct Investment (FDI) in domestic airlines

 Advanced information technology (IT) interventions

In May 2016, domestic air passenger traffic rose 21.63 per cent from 7.13 million to 8.67

million as compared to the traffic in May, 2015. In March 2016, total number of flights at all

Indian airports are recorded as 160,830; which is 14.9 per cent higher than the flights of March

2015.

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According to the reports of the Centre for Asia Pacific Aviation (CAPA), by FY2017, Indian

domestic air traffic is expected to cross 100 million passengers compared to 81 million

passengers in 2015. According to CRISIL’s reports, the airlines of India are expected to record

a collective profit of INR 8,100 crore (US$ 1.29 billion) in year 2016.

Aircraft Manufacturing Giants

Hindustan Aeronautics Limited (HAL), a government-owned corporation based at Bangalore,

Karnataka, is an Indian giant that is governed by Ministry of Defence (MoD). It is involved in

manufacturing and assembly of aircraft, navigation, and allied communication equipment. It

also governs airports operations.

HAL works in collaboration with numerous international aerospace agencies such as Airbus,

Boeing, Sukhoi Aviation Corporation, Israel Aircraft Industries, RSK MiG, RollsRoyce,

Dassault Aviation, Indian Aeronautical Development Agency, and the Indian Space Research

Organization (ISRO).

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 OBJECTIVE OF THE REPORT

1. To explore the Issues & Challenges of Aviation Industry.

2. To focus the study on possible alternatives to mitigate the Issues & Challenges with the help

of new technologies.

3. To explore the impact of Aviation Industry on Environment and further to focus the study on

aviation industry’s role on financial sustainability on economy.

4. To explore the scope of innovation in aviation industry.

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 REVIEW OF LITERATURE

The articles selected for the purpose of literature review cover wide areas of aviation safety.

Various researchers in past studied the effect of various variables in different situations which

are concerned with the aviation safety. Shyur (2007) studied that the Statistics indicates more

than 70% of aviation accidents are related to human errors and 56% of worldwide hull lose

accidents are caused by flight crew errors. It has also been claimed that all accidents have some

forms of human error attached to their causes (Braithwaite et al., 1998). Estimation of the human

error related risk in a given time interval that a particular airline would be expected to have, upon

adjusting for the airline’s corresponding safety performance indicators, could help to identify

situations in need of heightened level of surveillance by the safety inspectors. The deadliest

aviation-related disaster of any kind, considering fatalities on both the aircraft and the ground,

was the destruction of the World Trade Centre in New York City on 11 September 2001, with

the intentional crashing of American Airlines Flight 11 and United Airlines Flight 175. The

World Trade Centre crashes killed 2,752. Giovanni Andre Atta, Lorenzo Brunetta and Guglielmo

Guastalla (2000) studied traffic network congestion leading toward ground holding policies that

are quotient and gave concept of free flight H. J. Herman (2001) studies the cultural,

organizational and behavioral aspects of crew members on aviation safety. Rick A. Matthews

and David Kauzlarich (2000) performed a case study on the crash of ValuJet Flight 592. Yu-

Herne Changa, Hui-Hua Yang (2011) studied the cabin safety perceptions of passengers from

their emergency evacuation experiences. Sameer Singh, Maneesha Singh (2002) discussed some

technologies for the detection of explosives and application of computers for the analysis of data

& images generated from security equipment.

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The Covid-19 outbreak has brought the whole world to the brink of an unprecedented crisis. This

crisis has forced individuals, societies, industries, and states to take measures that have never

been encountered before. Countries have closed their borders to prevent the spread of the virus,

and the global circulation of people has been blocked. All these developments have deeply

affected the aviation industry, and the industry has come to a standstill. For example, in April

2020, world passenger traffic decreased by 94.3 percent compared to the previous year (Tabares,

2021, p. 2; Flight Safety Foundation, 2020, p. 4; World Tourism Organization the United

Nations, 2020, p. 3). According to the pre-COVID-19 scenario, airport passenger traffic

decreased by about 60 percent and revenues by 61 percent in 2020, meaning that an estimated

US $ 104.5 billion was lost in airports.1 The almost complete cutting of both aviation revenues

and non-aviation revenues causes great economic losses for airports. The fact that airlines reduce

the capacity to a great extent reduces the aviation revenues received by airports due to services

such as plane landing - takeoff - accommodation and security. The reduction in flights also

reduces non-aviation revenues from airport parking lots, restaurants, or duty-free sales

(International Finance Corporation, 2020).

This effect causes difficult economic losses not only for airports but also for all stakeholders of

the sector, such as airport service providers and airline organizations (ICAO, 2020). Various

stakeholder groups that want to reduce the possibility of COVID-19 transmitted by air, regain

trust in the eyes of customers and revitalize the sector also put forward measures for these

purposes. Several aviation authorities such as the European Union Aviation Safety Agency

(EASA), the European Center for Disease Prevention and Control (ECDC), the Federal Aviation

Administration, the International Civil Aviation Authority (ICAO), and the International Air

Transport Association (IATA) publishes various guidelines to inform their parties2’.3 Airports

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Council International (ACI) also carries out efforts to reduce the effects of the pandemic for

airport organizations, whose members were in the COVID-19 period. One of the most

precautions of these efforts is the ACI Airport Health Accreditation (AHA) program, which is

the subject of this research. This program, which was put forward for the purposes such as taking

health measures to prevent this epidemic at airports, controlling and encouraging the measures,

and sharing good examples, quickly attracted the attention of the airports4, 5 For this reason, it

has become a popular certificate program among airport organizations in a short time. In the

literature, issues such as the reason for the diffusion of new practices in certain institutional

environments (organizational areas), the ways organizations adopt and implement these practices

are explained with concepts such as institutional theory, legitimacy theory, and institutional

logics. Legitimation in particular is closely related to diffusion (Deep house, p. 58). These

approaches, which try to understand and explain the behavior of organizations, form the

framework of this research. There are studies in the literature that reveal that organizations carry

out some of their activities in search of legitimacy. According to these studies, these activities

sometimes take place in search of moral sometimes pragmatic legitimacy (Shnayder et al.,

2016; Howton et al., 2010; Khan et al., 2015; Beddewela and Fairbrass, 2016).

For these reasons, this study, which aims to reveal why airport organizations prefer the ACI -

AHA program, draws on the basic assumptions of legitimacy and institutional logic.

The importance of the aviation industry's socio-economic impact, domestically and globally,

cannot be denied. In light of this and, as aviation continues to evolve as an academic field of

study, post-secondary institutions with aviation specific curriculum have grown,in number and

prominence. As a direct consequence of academic growth, the necessity to publish follows as a

concomitant requirement. Through the diligence of those researchers actively conducting

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aviation related research a common theoretical and conceptual base for aviation specific research

has been established. The void that once existed for aviation research has been filled,

predominantly by three aviation specific journals and a number of other journals of prominence

that accept aviation research for publication. In a 1995 article entitled Publishing Aviation

Research: An Interdisci~linarv Review of Scholarly Journals, Truitt and Kaps, using a

specialized computer research criterion, and key informant interviews identified a list of 2 1

aviation specific and related publication outlets available for publishing. This research procedure

and methodology received additional validity when the University Aviation Association codified

the findings into a UAA publication entitled, Directow of Scholarlv Journals Which Publish

Non-Engineering Aviation Research. Replication of that study and by expanding the field of

search mechanisms, the authors set out to determine the present field for aviation publications,

both scholarly and non-scholarly. Twenty-nine academically peer reviewed journals are included

in this update. The results validate the previous study, and identify and define, through tabular

exhibits, contact points, addresses and email and/or web site locations of previously sited

locations and those emerging subsequent to the UAA listing. In addition, this current effort adds

new perspectives on the reasons for publishing and who might be encouraged to publish in what

type of journal.

Additive manufacturing (AM) is a technology that has the potential to change the future of

aviation supply chains and how the aviation industry designs, manufactures and repairs aircraft

in the future. The purpose of this research was to shed light on the current and future states of

AM in the aviation industry. From focus groups with nearly 50 aviation professionals from

aircraft original equipment manufacturers (OEMs), suppliers, maintenance repair overhaul

providers, and AM service providers and AM production firms, we found that the adoption of

15
AM will be triggered by the accumulated AM experience in the industry, the stability of AM

technology and the development of new aircraft generations. For AM to be finally adopted,

aircraft OEMs must actively manage several success factors and monitor numerous control

factors identified and discussed in this research. AM will supplement traditional manufacturing

processes at least in the short to midterm, likely grow exponentially and offer benefits for players

in the aviation supply chain.

The literature review will rely on five articles related to the aviation industry. The literature

recognizes that the aviation industry is facing several challenges concerning its safety and

security. The recent loss of a Malaysian airline is a wake-up calls to the industry players to step-

up their security systems. The literature focus on modern cases where the aviation industry has

been attacked. After that, the literature highlight measures to be adopted to ensure that the safety

and security in the industry are enhanced.

The Indian Government is intensely dedicated for the development of the Indian aviation

industry and has introduced several policies and regulatory reforms to boost private participation

and investments in the same. Recently, the Government allowed 49 per cent FDI by foreign

airlines in the sector.

 The Government has finally given its nod to the US$ 900 million-Jet-Etihad deal,

embarking on the biggest FDI in Indian aviation sector. The Foreign Investment

Promotion Board (FIPB) has asked for certain amendments in the deal though. Once the

modified deal is approved by the Cabinet Committee on Economic Affairs, Etihad would

be eligible to become the owner of 24 per cent stake in Jet for US$ 379 million.

 Not only that, Jet Airways has also been allowed to go for code-sharing with five airlines

— American Airlines, Malaysian, Garuda of Indonesia, Vietnam Airlines and Kenya

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 Airways – by the aviation ministry. The nod would enable Jet expand its global footprint

and become the biggest Indian carrier in terms of network.

A code-share enables two or more airlines share the same flight. Passengers will buy

ticket from one airline and take a flight operated by another airline, allowing partners to

enhance their reach across the global sky.

 Furthermore, Mr K.C. Venugopal, Minister of State for Civil Aviation, has recently

informed Rajya Sabha that 17 new airports have been proposed for construction during

the 12th Five Year Plan.

The details of the proposals have not been disclosed yet.

 The Indian Government has also been visionary in terms of the talent requirement for the

flourishing aviation industry in future. In order to address the shortage of skilled,

managerial and operational personnel in aviation, the bill to establish the aviation

university (which has been already discussed above), has been forwarded to the Lok

Sabha Secretariat. The university will offer and endorse aviation studies, teaching,

training, research and extension work with focus on emerging areas of studies such as

aviation management, aviation regulation and policy, aviation science and engineering,

transportation of dangerous goods and other related fields, according to the proposal. The

Indian Government has calculated the project outlay of Rs 202 crore (US$ 31.92 million)

for the institution until 2019.

Indian aviation market is poised to become the third largest across the globe by 2020,

according to industry estimates. The sector is expected to handle 336 million domestic

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and 85 million international passengers with projected investment to the tune of US$ 120

billion. Indian Aviation Industry that currently accounts for 1.5 per cent of the GDP, has

been instrumental in the overall economic development of the country, said Mr Ajit

Singh the Minister for Civil Aviation. He further stated that given the huge gap between

potential and current air travel penetration in India, the prospects and possibilities of

growth of Indian aviation market are enormous.

Modern tourism is impossible without air transport, airports infrastructure, and

worldwide air transport networks. The development of air transport and tourism are

dependent on each other and this relationship is taken into account either implicitly or

explicitly in the business models both fields adopt (Bieger & Wittmer, 2006; Forsyth

2006, 2010; Duval 2013). Air transport is important for tourism development.

Macchiavelli and Vaghi (2003) found air accessibility was a factor in tourism

development in Southern Italy. Tourism is highly influenced by international airline

alliances through fare and total travel time reductions, better connectivity, convenient

schedules and stronger tourism destination marketing initiatives (Morley, 2003). While

alliances have general impact, single carries could also influence the tourism

development of certain destinations. Chung and Whang (2011) stated that LCCs (low

cost carriers) stimulated new demand for Korean islands, as well as tourism jobs growth

and income. Similar research conducted by Donzelli (2010) identified that LCCs have

positive impact on local economy and tourism in Southern Italy. Some 40% of

international tourists travel by air (Dobruszkes & Mondou, 2013). Aviation regulatory

regimes underpin air travel, since regulation may restrict the range of routes operated by

airlines, prevent competition and control fares, thus restricting the tourist business and

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influencing its spatial patterns (Forsyth, 2008). The importance of aviation liberalization,

air transport policies and “open skies” agreements and their impact on tourism has been

discussed through different case studies (Dobruszkes & Mondou, 2013; Zhang &

Findlay, 2014).

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 INDUSTRY OVERVIEW

The civil aviation industry in India has emerged as one of the fastest growing industries in the

country during the last three years. India has become the third largest domestic aviation market

in the world and is expected to overtake UK to become the third largest air passenger* market by

2024^.

Market Size

India’s passenger* traffic stood at 341.05 million in FY20. It grew at a compound annual growth

rate (CAGR) of 11.13% during FY16-FY20. In FY21 (from May 2020 to March 2021), airports

in India pegged the domestic passenger traffic to be ~53.4 million, a y-o-y decline of ~62% over

the fiscal ended March 31, 2020. The average number of passengers per flight in February 2021

was 121, against an average of 136 passengers per flight in February 2020. International

passenger traffic stood at 66.54 million, growing at a CAGR of 5.01% during FY16-FY20.

Freight traffic grew at a CAGR of 5.32% during FY16-FY20 from 2.70 million tones (MT) to

3.33 MT. Freight Traffic is expected to grow at a CAGR of 7.27% to reach 4.14 MT in FY23.

Aircraft movement grew at a CAGR of 9.56% from 1.60 million in FY16 to 2.59 million in

FY20. During FY16-FY20, domestic aircraft movement increased at a CAGR of 9.83% and

international aircraft movement expanded at a CAGR of 3.57%. India’s domestic and

international aircraft movements grew to reach 2,155 thousand and 433 thousand during FY20,

respectively.

To cater to the rising air traffic, the Government of India has been working towards increasing

the number of airports. As of 2020, India had 153 operational airports. India has envisaged

increasing the number of operational airports to 190-200 by FY40.

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Further, the rising demand in the sector has pushed the number of airplanes operating in the

sector. The number of airplanes is expected to reach 1,100 planes by 2027.

Investment

According to the data released by Department for Promotion of Industry and Internal Trade

(DPIIT), FDI inflow in India’s air transport sector (including air freight) reached US$ 2.88

billion between April 2000 and December 2020. The government has allowed 100% FDI under

the automatic route in scheduled air transport service, regional air transport service and domestic

scheduled passenger airline. However, FDI over 49% would require government approval.

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India’s aviation industry is expected to witness Rs. 35,000 crore (US$ 4.99 billion) investment in

the next four years. The Indian Government is planning to invest US$ 1.83 billion for

development of airport infrastructure along with aviation navigation services by 2026.

Key investments and developments in India’s aviation industry include:

 In March 2021, the Indira Gandhi International (IGI) Airport in Delhi announced a key

expansion project to increase its passenger handling capacity. The expansion project

includes a new terminal, advanced facilities, an additional runway and improved capacity

to handle more passengers.

 In March 2021, the government announced plan to set up two water aerodromes in

Assam and four water aerodromes in Andaman & Nicobar Islands this year to boost

tourism and connectivity.

 In March 2021, the government submitted a proposal to develop a water aerodrome

project at the Ujjain Dam, under the Ministry of Civil Aviation’s UDAN-RCS (regional

connectivity scheme).

 On March 25, 2021, Union Minister of Civil Aviation Hardeep Singh Puri inaugurated

the Kurnool Airport, Orvakal, Andhra Pradesh, in a virtual ceremony. The flight

operations at Kurnool airport will commence on March 28, 2021 under the Regional

Connectivity Scheme – Ude Desh Ka Aam Nagrik (RCS-UDAN). 

 On February 25, 2021, the Airports Authority of India (AAI) issued tenders for

construction of the first phase of an international airport at Dholera in Gujarat, entailing

an investment of Rs. 987 crore (US$ 135.07 million). The new facility is being set up in

greenfield city under the Delhi–Mumbai Industrial Corridor (DMIC) project at Dholera.

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  On January 19, 2021, the Airport Authority of India (AAI) signed a concession

agreement with Adani Group for three airports—Jaipur, Guwahati and

Thiruvananthapuram. The concession period is 50 years from the date of commercial

operations.

 On December 21, 2020, IndiGo announced that it has collaborated with Urban Drive car

rental company to offer self-driven and chauffeur driver services across 60 Indian cities.

 In October 2020, Zurich Airport International signed the concession agreement for the

development of Jewar Airport on the outskirts of Delhi. The agreement has granted

Zurich Airport International the licence to design, build and operate Noida International

Airport (NIAL) for the next 40 years.

 In October 2020, the Airports Authority of India (AAI) announced plan to upgrade

runways at seven airports across the country by March 2022.

 In January 2020, IndiGo became first Indian carrier to have an aircraft fleet size of 250

planes and became the first airline to operate 1,500 flights per day.

 AAI plans to invest Rs. 25,000 crore (US$ 3.58 billion) in next the five years to augment

facilities and infrastructure at airports.

 UK group to invest Rs. 950 crore (US$ 135.9 million) in Turbo Aviation's new airline

TruStar.

Government Initiatives

Some major initiatives undertaken by the Government are:

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 In March 2021, on the launch of the ‘Azadi Ka Amrit Mahotsav (India@75)’ by the

Government of India, the Ministry of Civil Aviation (MoCA) has proposed 392 routes

under the UDAN 4.1 bidding process.

 The Airport Authority of India plans to abolish royalty and offer steep discounts in lease

rent to encourage MRO units to set up facilities at its airports.

 The government is planning to start 14 more water aerodromes across the country, after

the successful launch of seaplane service by Prime Minister, Mr. Narendra Modi,

between the Statue of Unity near Kevadiya in Gujarat's Narmada district and Sabarmati

Riverfront in Ahmedabad in October 2020.

 In November 2020, the Government of India announced that it is likely to increase the

total number of allowed domestic flights to 75% of the pre-COVID-19 levels, as it

expects a rise in passenger numbers due to the festive and holiday season.

 In September 2020, the Government of India sanctioned Rs. 108 crore (US $ 14.73

million) for Jagdalpur, Ambikapur and Bilaspur airports in Chhattisgarh under the UDAN

scheme for upgrade and development.

 Under Union Budget 2021-22, the government lowered the custom duty from 2.5% to 0%

on components or parts, including engines, for manufacturing of aircrafts by public sector

units of the Ministry of Defence.

 Under Union Budget 2021-22, the Indian government expanded the scope for ‘Krishi

Udaan’ in convergence with Operation Green Scheme, wherein air freight subsidy of

50% for agri-perishables would be provided to North East states and 4 Himalayan

states/UTs. The expansion of product-coverage will boost the ‘Krishi Udaan’ scheme and

improve air cargo transportation from these states.

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  In February 2019, the Government of India sanctioned the development of a new

greenfield airport in Hirasar, Gujarat, with an estimated investment of Rs. 1,405 crore

(US$ 194.73 million).

 Regional Connectivity Scheme (RCS) has been launched.

Achievements

Following are achievements of the Government:

 3,13,668 domestic passengers flew on February 28, 2021—the highest number since

resumption of domestic flights on May 25, 2020.

 Under RCS-Udan scheme, approximately 34,74,000 passengers were flown and 335

routes were awarded during 2019, covering 33 airports (20 unserved, 3 underserved, 10

water aerodromes).

 As of December 31, 2020, ~31 lakh Indians have been repatriated under the Vande

Bharat Mission (VBM). The VBM has so far involved 6,373 Air India flights and 474

flights by private Indian carriers. About 1,035,471 Indian nationals have been repatriated

by Air India, whereas 74,675 Indian nationals have been brought back by private carriers.

 In April 2020, the government introduced the ‘Lifeline Udan’ flights to transport

essential medical cargo to remote parts of the country to support India’s war against

COVID-19. Under this scheme, about 600 flights flew more than 5 lakh kms and

transported about 1,000 tons of essential cargo.

Road Ahead

25
India’s aviation industry is largely untapped with huge growth opportunities, considering that air

transport is still expensive for majority of the country’s population, of which nearly 40% 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 India’s 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. The expenditure of

Indian travelers is expected to grow up to Rs. 9.5 lakh crore (US$ 136 billion) by 2021. Due to

rise in demand in air travel, India will need 2,380 new commercial airplanes by 2038.

PASSANGERS TRAVELLING PREFERENCE

26
 ISSUES AND CHALLENGES

The list of the issues and challenges faced by firms operating in the aviation industry is endless.

However, there are major issues and challenges that the firms in the industry face during the

21st century. The challenges and issues addressed in this paper are security and safety,

overcapacity, the fuel factor, sustainability issues and challenges associated with advancement of

technology.

Security and Safety

Enhancing security of air travel has been a major challenge to airlines and airports for a long

time, and it is still a major issue of concern today. Terrorism is the main security threat in the

aviation industry. For a long time, terrorists have been targeting airplanes and airports as their

targets of terror attacks. The fundamental cause of the Tenerife air disaster that occurred in 1977,

which is one of the biggest air disasters in the aviation industry history, was terrorism. The

disaster caused the deaths of 513 people (Fitzgerald, 2010). The attack of the US by the Al

Qaeda terrorist group in September 11, 2001, is one of the most remarkable issues that have been

faced by the aviation industry recently. The Al Qaeda group hijacked airplanes and used them to

attack the US. The September 11 attack led the aviation industry in the US and other countries to

come up with numerous security measures and regulations in order to reduce chances of the

occurrence of terrorist attacks. For instance, surveillance systems were put in place in airports

27
that are meant to detect bombs, guns, grenades and other things that can be used by terrorists.

28
Challenges of the Internet Technology

The internet technology has significantly evolved over the last two decades, hence paving way

for business organizations to engage customers and even carry out business activities online with

them. Today, consumers have easy access to technological devices, such as computers, tablets

and mobile phones, which allow them to assess information about business organizations on

websites. Also, many people are using such devices to engage in social networks through social

media sites such as Facebook and Twitter. Innovative airlines have been exploiting the

opportunities provided by the internet technology to engage, communicate and sell their services

to customers through their websites and forums and accounts opened in the social media sites.

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The Fuel Factor

The price of jet fuel is a major concern to many airlines today. Jet fuel is costly, and its price has

been fluctuating. When the price of jet fuel rises, some airlines find that they are going to make

loses and thus, they increase the prices of the services offered to customers. This increases the

possibility of losing loyal customers. Singapore Airlines, for instance, has regarded fuel prices as

one of its main challenges (Coza, 2014). British Airways and Jet Blue have also experienced

difficulties in the management of fuel costs. This indicates that fuel prices affect both the

governmental and privately-owned airlines. The issue fuel price becomes worse during times of

recession, as experienced by airlines during the economic crisis that peaked in 2008.

Last minute requests, delays, aircraft changes from airlines and operational limitations

Food safety and security regulations aren’t the only challenges, last minute requests up until 15

minutes before aircraft departure, short turnaround times, aircraft changes, delays and airport

operational limitations, also generate additional demand and pressure on airlines to deliver on

time and according to customer specifications.

Sustainability

Of course there can be nothing guaranteed about the future of aviation if the industry is not

sustainable. And it would be very much appreciated if attention is drawn on two dimensions of

sustainability- environmental and financial.

Pilot shortage

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The shortage of pilots was one of the biggest concerns in the global aviation industry until the

start of this year. However, the impact of coronavirus on the airline industry has turned this

deficit into a surplus. With airlines struggling to survive, even experienced pilots are losing jobs.

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 APPLICATION TO RESOLVE ISSUES

We can solve issues by the adoption of the following technologies

1. SEAMLESS AND ADVANCED INFORMATION TECHNIQUES

Every layer of airline industry is heavily filled with Information Technology. Infact, airlines

were early adopters of ICT (information communication technology) and have a history of

technological innovation and because of use of this for such a long time, this industry has

fostered a dependency on technology for their operational and strategic management. In aviation,

airlines have realized the need of efficient, quick, inexpensive and accurate handling of their list

and records and being one of the most independent organizations in travel industry, they need

internet, and intranet and extranets to facilitate all of this as these three features facilitates their

operational, administrative and competitive roles in the market thereby bringing innovation

support. With the growing technology and demand and with the increase in fleet and routes, it

was realized that reservations could no longer be on manual display boards, where passengers

were listed. Up to 1970, airlines had to locate the best routes and fares for the customer and

publish it in a manual. They had to phone for availability, reservation and conformation before

booking the tickets manually. Internet allows airlines to demonstrate their competitiveness

widely as well as directly communicate with their customers. Today every airline has a website

for the convenience of passengers and it has all the information necessary for a convenient travel

booking. From checking tickets to booking them to planning a multi-city travel and many more

options. With the help of a web portal, customers can plan or cancel with just a click and in a

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very secure manner ensuring that data is not being misused and neither is there any loss of

money. Web check-in, additional baggage, seat preference, car

 – 

 Rentals and hotel bookings are few more additional benefits that make travel more comfortable.

Computer Reservation System (CRS) was described as a technical marvel when it was first

launched. CRS allows airlines to improve their internal organization and also provide a powerful

tool to manage their inventory. A reservation system like this also enabled airlines to

communicate with travel agencies and distributors. Availability of seats and fare updates were

also easy to check with the help of this. Intranets are used to provide user friendly access to

employees of the organization. Airlines aim at maximizing their profitability, by optimizing their

total yield and byminimising costs.

2. USE OF LATEST VR AND AR TECHNOLOGIES

It’s been many years since the first flight simulator was built for training the young pilots. But

now VR is offering a new way to train pilots. Before, the aviation training program included

actual cockpits and large screen monitors, whereas now VR provides a synthetic space, which

immerses pilots in an incredibly realistic training scenario. The flight simulator requires more

space for training as it involves actual cockpits and large displays. VR, on the other hand,

involves only headsets, which are easily portable. Besides, the expenditure incurred on VR flight

simulators is much less than that incurred on traditional flight simulators. Hence, with the help of

VR, the aviation industry can benefit in numerous ways, including a reduction in the cost and

space required for training.

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Not just for in-flight entertainment and training, VR can also be used to treat passengers who are

phobic to flying. It is difficult to believe that one out of every three Americans is scared of

flying. Michael Carthy is a company that offers VR therapy to reduce people’s anxiety and

phobia for flying. So now that you know what this technology can offer to the aviation industry,

3. USE OF LITE MATERIAL FOR MANUFACTURING OF AIRCRAFTS.

The materials used in the manufacturing of aircraft have changed significantly from the

construction of the first aircraft. With its objective of flying using air support while, resisting

gravitational forces, the materials used for the construction of aircraft must have a small weight,

high specific strength, heat resistant, fatigue load resistant, crack resistant and corrosion resistant.

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Back in the days, aircraft were constructed using wood and fabrics. But aircraft that are made up

of wood and fabric were subject to rapid deterioration and high maintenance. Thus, the search

for better materials began. Now, aluminum, steel, titanium and composite materials are preferred

in the construction of aerospace structures.

4. PILOT TRAINING

IATA issued a new estimate that the industry may need 17,000 new pilots annually due to

expected industry growth and retirements. "Increasing the retirement age to 65 will help but it

can’t be the only solution. It’s time to ring the warning bell. We must re-think pilot training and

qualification to further improve safety and increase training capacity,” said Giovanni Bisignani,

IATA Director-General and CEO.

He told the Federal Aviation Administration (FAA) International Safety Forum, "the industry is

concerned that there are no global standards for training concepts or regulation. Pilot training has

not changed in 60 years - we are still ticking boxes with an emphasis on flight hours.”

IATA supports the competency-based approach of multi-crew pilot licensing (MPL) training

programmers. Unlike traditional pilot training, MPL focuses from the beginning on training for

multi-pilot cockpit working conditions. It also makes better use of simulator technology. Europe

was among the first regions to adopt MPL and Australia and China are moving ahead with

implementation.

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IATA launched the IATA Training and Qualification Initiative (ITQI) to support a global

approach to MPL implementation. “Our goal is to increase the pool of candidates and training

capacity while improving standards,” said Bisignani. As part of ITQI, IATA will host a database

to track the progress of MPL cadets and allow the industry to make training adjustments, if

necessary. IATA also called for greater cooperation with governments. In China, IATA is

working with the government to develop the syllabus and incorporate MPL into national

regulation.

5. BIOFUELS

An aviation biofuel or bio-jet-fuel [1] or bio-aviation fuel (BAF) [2] is a biofuel used to

power aircraft and is said to be a sustainable aviation fuel (SAF). The International Air Transport

Association (IATA) considers it to be one of the key elements to reduce the carbon

footprint within the environmental impact of aviation.[3] Aviation biofuel could

help decarbonize medium- and long-haul air travel generating most emissions, and could extend

the life of older aircraft types by lowering their carbon footprint.

Biofuels are biomass-derived fuels, from plants or waste; depending on which type of biomass is

used, they could lower CO₂ emissions by 20–98% compared to conventional jet fuel.[4] The first

test flight using blended biofuel was in 2008, and in 2011 blended fuels with 50% biofuels were

allowed in commercial flights. In 2019, the IATA was aiming for a 2% penetration by 2025.

Aviation biofuel can be produced from plant sources like Jatropha, algae, tallows, waste

oils, palm oil, Babassu and Camelina (bio-SPK); from solid biomass using pyrolysis processed

with a Fischer–Tropsch process (FT-SPK); with an alcohol-to-jet (ATJ) process from waste

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fermentation; or from synthetic biology through a solar reactor. Small piston engines can be

modified to burn ethanol

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 SUGGESTIVE STRATEGIES

1. Precise weather forecasting and navigation.

2. Advanced simulation techniques for quick training.

3. Use of alternative of petroleum fuels

4. Reducing the eligibility age for training

5. Increasing the age limit of pilots for retirement

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 LEARNING OUTCOME

My learnings by these project are as follows

1. in depth knowledge of aviation industry and its issues.

2. Importance of simulation training

3. Importance of weather forecasting in navigation

4. Knowledge about alternative fuels

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 RECOMMENDATIONS

1. Use of upgraded weather forecasting techniques.

2. Advanced simulation techniques for quick training.

3. Use of biofuels

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 BIBLOGRAPHY

1. http://www.defense-aerospace.com/

2. https://www.aviationbusinessnews.com/

3. https://www.iata.org/

4. https://www.ukessays.com/

5. https://www.uniassignment.com/

6. https://www.information-age.com/

7. https://scholar.google.co.in

8. https://pilotinstitute.com/

9. https://en.wikipedia.org/

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