task 6 on aviation

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Information about task 6 on aviation

Published on December 29, 2008

Author: nisha.r

Source: authorstream.com

TASK 6 ON AVIATION : TASK 6 ON AVIATION A Study On Indian Aviation Industry Nisha Raj.R I-4 Batch acknowledgement : acknowledgement I would like to thank Mrs.Pavitha our faculty guide for here help and support. I would like to thank 1)Joe Ward – F/O Virgin American (3 years) has worked with Jet Blue & Delta Connection. Flies Airbus 320 ( 27years old ) 2) Noob Froob – Capt. Virgin Atlantic ( 6 yrs of work experience) 3) Karim – F/O Lufthansa (2 years) 4) Chris Sindac 5) Guvenao Contents : Contents Current Scenario Of Indian Aviation Industry Market Size Air Traffic Airport Infrastructure Aviation Policy Aviation Sector Outlook Flying The Indian Skies News Report What are the advantages and dis-advantages of current scenario in the aviation industry Compare A-300 with Boeing 777 Bibliography Current Scenario of Indian Aviation Industry : Current Scenario of Indian Aviation Industry The Indian aviation industry is one of the fastest growing aviation industries in the world. India has 454 airports and airstrips; of these, 16 are designated international airports. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full-service airlines and low-cost carriers. Private airlines account for around 75 per cent share of the domestic aviation market. Slide 5: There has been phenomenal growth in the Indian aviation sector in 2007-08. India has jumped to 9th position in world's aviation market from 12th in 2006 As per the Ministry of Civil Aviation, the airline business is growing at 27 per cent per annum in India. During 2007, the domestic airline passenger traffic has shown a growth of 32.51 per cent. Further, the scheduled domestic air services are now available from 82 airports as against 75 in 2006 Market Size : Market Size Domestic and international traffic is up 45 per cent and 15.1 per cent, respectively. Between May 2007 and May 2008, airlines have carried 25.5 million domestic and 22.4 million international passengers. over 135 aircraft have been added in the past two years alone. Centre for Asia Pacific Aviation (CAPA) estimates domestic traffic to grow 25-30 per cent annually and international traffic 15 per cent until 2010 Air Traffic : Air Traffic Domestic air traffic is likely to more than double and touch 86.1 million passengers by 2010, up from 32.2 million passengers in 2007, states the market research firm PhoCus. According to data compiled by the Airports Authority of India (AAI), 24.62 million people flew on international routes to and from India during April-January 2007-08. This was a growth of 16.2 per cent over the same period last fiscal. The growth of domestic air passengers was at an even faster rate of 26.1 per cent, with 72.60 million people availing aircraft services. Simultaneously, freight traffic on both domestic and international routes increased by a healthy 8.2 per cent and 12.6 per cent, respectively. Airport Infrastructure : Airport Infrastructure Of the 454 airports and airstrips in India,16 are designated international airports. Currently 97 airports are owned and operated by the Airports Authority of India (AAI). India's Civil Aviation Ministry aims at 500 operational airports in the next 12 years, as per a report by Centre for Asia Pacific Aviation (CAPA). The government aims to attract private investment in aviation infrastructure. Mumbai and Delhi airports have already been privatized and are being upgraded at an estimated investment of US$ 4 billion over 2006-16. A Greenfield airport is already operational at Bangalore and Hyderabad. These are built by private consortia at a total investment of over US$ 800 million. A second Greenfield airport being planned at Navi Mumbai is going to be developed using public-private partnership (PPP) mode at an estimated cost of US$ 2.5 billion. Slide 9: 35 other city airports are proposed to be upgraded. The city side development will be undertaken through PPP mode where an investment of US$ 357 million is being considered over the next 3 years. Over the next five years, AAI has planned a massive investment of US$ 3.07 billion - 43 per cent of which will be for the three metro airports in Kolkata, Chennai and Trivandrum, and the rest will go into upgrading other non-metro airports and modernizing the existing aeronautical facilities. Aviation Policy : Aviation Policy Many policies supporting the infrastructure are now in place. For Greenfield airports, FDI up to 100 per cent is permitted through automatic approvals. 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). Private developers are allowed to set up captive airstrips and general airports 150 km away from an existing airport. 100 per cent tax exemption for airport projects for a period of 10 years. Slide 11: 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 (NRI’s) is permitted. 74 per cent FDI is permissible in cargo and non-scheduled airlines. The Indian government plans to set up an Airport Economic Regulatory Authority to provide a level playing field to all players. The "Open Sky" policy of the government and rapid air traffic growth have resulted in the entry of several new privately owned airlines and increased frequency/flights for international airlines. Aviation Sector Outlook : Aviation Sector Outlook As per the Investment Commission of India, the aviation sector is likely to boom further in the coming years, attracting huge investment. Passenger traffic is projected to grow at a compound annual growth rate (CAGR) of over 15 per cent in the next 5 years. The Vision 2020 statement announced by the Ministry of Civil Aviation, envisages creating infrastructure to handle 280 million passengers by 2020. Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80 billion in new aircraft and US$ 30 billion in development of airport infrastructure. Associated areas like maintenance, repair and overhaul (MRO) and training offer high investment potential. A report by Ernst & Young says the MRO category in the aviation sector can absorb up to US$ 120 billion worth of investments by 2020. Air cargo traffic to grow at over 11.4 per cent p.a. over the next 5 years to exceed 2.8 million tones by 2010. Flying the India Skies : Flying the India Skies The Indian civil aviation market holds great promise for potential investors. Over the past year, various companies have shown an interest in the Indian aviation industry. Aviall Inc, a wholly owned Boeing subsidiary, plans to open a business office in India later in the year. One of the largest providers of new aviation parts and related aftermarket services in the aerospace industry, Aviall's India, will be headquartered at the Noida Special Economic Zone in Uttar Pradesh. US-based business jet maker Hawker Beechcraft Corporation (HBC) has opened its first authorised service centre in Delhi in partnership with Interglobe General Aviation, the promoter group of IndiGo, with a total investment of US$ 8 million. Two more centres one in Mumbai and another in southern India are likely to come up by 2009. Hawker Beechcraft has the maximum number of business jets flying in India. Slide 14: ETA Star, one of Dubai's household names, will invest over US$ 1 billion to cash in on booming sectors such as ports and aviation. The US pioneer in fractional aircraft ownership, Net Jets is planning to expand in India after foraying into the Middle East market and establishing itself in Europe with 140 aircrafts. GMR Infrastructure is looking to tap the growing corporate jet market in India, which is expected to rise from the existing 150-190 to over 500 in the next four years with investment plans to the tune of US$ 151 million. Major private equity firm, TPG Capital, figures among the potential investors lining up to invest over US$ 400 million for a substantial stake in Vijay Mallya - led Kingfisher Airlines, according to multiple sources. NEWS REPORT : NEWS REPORT Committee set up to examine financial crises of domestic airlines in India (PIB press release)[ 9 July 2008 ] : Committee set up to examine financial crises of domestic airlines in India (PIB press release)[ 9 July 2008 ] Prime Minister, Dr. Manmohan Singh has approved the setting up of a Committee to examine various issues relating to the financial crises being faced by domestic airlines The Prime Minister, Dr. Manmohan Singh has approved the setting up of a Committee to examine various issues relating to the financial crises being faced by domestic airlines. This was communicated to the Ministry of Civil Aviation by the Cabinet Secretariat today. The Prime Minster had recently reviewed developments of the Civil Aviation Sector. The Ministry of Civil Aviation had suggested that a committee could examine various issues relating to the financial crises being faced by the domestic airlines. Slide 17: The Prime Minister has approved a Committee comprising of the following members: Cabinet Secretary, Chairperson, Finance Secretary, Secretary, Ministry of Civil Aviation, Secretary, Dept. of Revenue, Secretary, Ministry of Petroleum & Natural Gas, Secretary, Planning Commission, Dr. Deepak Parekh, Chairman, HDFC Dr. Raghuram, Prof. IIM, Ahmedabad. Slide 18: The terms of reference of the Committee are as follows: (a) Examination and assess the financial difficulties being faced by Airline operators in India. (b) Consider international scenario/practices followed by other countries/airlines. (c) In the light of (a) & (c) above, make appropriate short term as well as long-term recommendations for the sustained growth and health of aviation industry. The Committee has been asked to submit its recommendations at the earliest possible. The necessary action for setting up the Committee will be taken by Ministry of Civil Aviation and the report of the Committee will be sent to the PMO after finalization.  Welcoming the decision, the Civil Aviation Minister, Shri Praful Patel said “The Ministry of Civil Aviation looks forward to the advice of this Committee which has been formed pursuant to our meeting with the Prime Minister on one of the most important issues presently affecting the Civil Aviation Sector that has led to the slowdown in the growth sector and losses for the domestic airlines.” What are the advantages & disadvantages of the current scenario in the aviation industry? : What are the advantages & disadvantages of the current scenario in the aviation industry? “Guvenor”: - Well let's see...A lot of airlines are going bankrupt at the moment because their fuel costs are going up, and they have fewer customers because people have less money to spend these days. There have also been a few mergers recently.This means that there will be less competition which means flight prices will go up. It also means that there won't be as many flights so it might be more difficult to get to your destination, and the existing flights might be really busy.On the plus side it means that there's less pollution in the air which is good for the environment, and people might travel more on coaches/ferries/trains which is good for those industries. Also, some of the big airlines are horribly inefficient so the situation might force some of them to sort themselves out Compare A-300 with the latest technology aircraft Boeing 777? : Compare A-300 with the latest technology aircraft Boeing 777? 1)Chris Sindac: - A300 is the old aircraft of airbus industry and the B777 is the new aircraft of Boeing Company so Boeing 777 has the latest Technology compare to A300. 2)Simon: - I think i prefer Boeing. Airbus has a nasty habit of flying itself into the ground 3)Noob Froob:- 777 is a lot more fuel efficient than A-300. The 777 war the first 100% computer designed airplane which allowed the plane to be one of the most fuel efficient & the 777 is fly by fire. Bibliography : Bibliography Primary Data Information received from Joe Ward (F/O Virgin American) Noob Froob (Capt. Virgin Atlantic) Karim (F/O Lufthansa) Chris Sindac Guvenoa Secondary Data www.Ibeforg.com www.businessworld.in www.airsafe.com www.faa.gov.com www.airliners.net Press information bureau Economic Times

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