Home' Asian Aviation : AAV November 2011 Contents 28 AsianAviation | NOVEM BER 2011
ndia’s civil-aviation sector, estimated to
be growing at a robust annual rate of 15-
20 percent, is considered India’s second
emerging sunrise industry after Information
Technology. The growth rate is one of the
fastest in the Asia-Pacific region, and the
country is currently the ninth-largest aviation market
in the world. A massive boom in the tourism industry,
coupled with a growing , ca sh-rich middle class and
strong government support have helped , a longside
growing private participation and foreign investment,
and a favourable business environment.
With the Government’s Open Skies policy luring
an increa sing number of foreign entities to enter the
country’s civil-aviation market, the number of airlines
and the nationwide aircraft fleet are both expanding.
Recognising this, the Indian Civil Aviation Ministry’s
Vision 2020 plan stresses a need to develop the
country’s infrastructure, with a particular focus on
well- equipped, user friendly airports to handle as
many as 280 million passengers per year expected in
the country by 2020.
The key challenge will be to ensure that Indian
a irports function with the same efficiency as global
hubs such as Dubai and Singapore. That not only
ca lls for a hug e infrastructure investment, but also
a totally new approach to setting up and handling
airports. Interestingly, while India allows 100 percent
FDI(Foreign Direct Investment) into the green-field
airport projects, it does not allow direct or indirect
equity participation by foreign airlines into the
Indian carriers. Cash-strapped Indian carriers have,
however, been vigorously advocating the need to lift
Vijay Mallya , chairman of Kingfisher Airlines
and of the Confederation of Indian Industry (CII)
committee on civil aviation, estimates that the
country’s aviation sector is growing at ab out 18
percent per year. However, he adds that the next two
years will be critical in consolidating the growth as
well as making the sector sustainable.
In 2004, the Indian aviation market handled about
18 million passengers, and that figure is now at about
50 million. Domestic passenger traffic grew 14.8
percent in May 2011 from the same month last year
and the number of passengers flown by Indian carriers
that month hit an all time high of 5,492,000.
Jet Airways, along with its low-cost carrier (LCC)
subsidiary Jetlite, led the field with 26.1 percent of the
market. Budget carrier Indigo carried 19.9 percent of
the passenger total, a fraction less than the 20 percent
handled by Kingfisher. With pilots of state-owned,
debt-ridden Air India on strike that month, SpiceJet,
the LCC owned by media baron Kalanithi Maran,
increased its market share to 14.2 percent. Indigo had
the highest passenger load factor at 89.4 percent.
“Robust growth, with [improved] economic
prospects [for the] massive Indian population, and
business progress and access to airports will increase
the demand for aircraft,” says Dinesh Keskar, president
of Boeing India . The US aircraft manufacturer
predicts that India-based airlines will pursue growth
strategies that reflect passengers’ preference for more
flight choices, lower fares and direct access to a wider
range of destinations.
Boeing predicts India will need 1,320 new
commercial passenger aircraft over the next two
decades. Total domestic and international traffic may
increase to as many as 450 million passengers by 2020.
The New D elhi-based South Asian branch of the
consultancy Centre for Asia Pacific Aviation (CAPA)
says the expansion of the Indian civil aviation industry
The growth of India’s airline industry continues apace, making the country one of the world’s key aviation
markets. Yet infrastructure challenges remain and India’s airlines are deep in debt, writes Radhakrishna Rao.
“Robust growth, with [improved] economic prospects...
business progress and access to airports will increase the
demand for aircraft.” – Boeing India President Dinesh Keskar
As part of an order for 111 aircraft placed in 2006, Air India will acquire 27 of Boeing 787s.
Indian aviation faces
28/10/11 8:27 PM
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