Civil Aviation Industry


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Civil Aviation Industry

  1. 3. <ul><li>1953: Nationalization of Aircraft Industry </li></ul><ul><li>9 existing companies transferred to two entities controlled by Govt. </li></ul><ul><li>(a) Indian Airlines- domestic sectors </li></ul><ul><li>(b) Air India- international sectors </li></ul><ul><li>1986: Private Sector Players permitted as Air taxi operators </li></ul><ul><li> Jet, Air Sahara, NEPC, East West, Modiluft ,etc started </li></ul><ul><li>1994: Private Carriers permitted to operate scheduled services </li></ul><ul><li>6 operators granted license , only Jet and Air Sahara able to service </li></ul><ul><li>2003: Entry of low cost carriers </li></ul><ul><li> Air Deccan, Spice Jet, Go Air, Indigo </li></ul>
  2. 4. <ul><li>Reasons: </li></ul><ul><li>Soaring prices of aviation fuel </li></ul><ul><li>Mounting salary bills </li></ul><ul><li>Disproportionately large fleets </li></ul><ul><li>Financial health of companies declined despite liberal Govt patronage(1949) </li></ul>
  3. 5. <ul><li>Set up Air Traffic Enquiry Committee in 1950 . </li></ul><ul><li>Nationalization of Indian Airlines (IA) 1953 resulted in Govt. control. </li></ul><ul><li>Meant to remove operational limitations arising out of excess competition. </li></ul><ul><li>Air transportation in India now comes under the direct control of the Department of Civil Aviation. </li></ul>
  4. 6. <ul><li>Effects </li></ul><ul><li>Increasing liberalization and deregulation . </li></ul><ul><li>Increase in the number of players. </li></ul><ul><li>Enactment of the open sky policy between India and SAARC countries. </li></ul><ul><li>Increase in bilateral entitlements with the EU and US. </li></ul><ul><li>Aggressive promotion of India as an attractive tourism spot. </li></ul><ul><li>Increasing per capita income led to an increase in disposable incomes. </li></ul><ul><li>Leading to greater spend on leisure and holidays and business travel has risen sharply with increasing MNC presence. </li></ul><ul><li>Smaller cities are also well connected now. </li></ul>
  5. 7. <ul><li>Airport Authority of India </li></ul><ul><ul><li>April 1,1995 by combining International Airport Authority of India and National Airport Authority of India. </li></ul></ul><ul><ul><li>Infrastructure for civil air traffic. </li></ul></ul><ul><ul><li>Transport at the international and the domestic airports. </li></ul></ul><ul><ul><li>It manages 94 civil airports including 11 international airports at Delhi, Mumbai, Kolkata, Chennai, Thiruvananthapuram, Bangalore, Hyderabad, Ahmedabad, Goa, Amritsar and Guwahati . </li></ul></ul><ul><ul><li>28 civil enclaves at defence airfields. </li></ul></ul>
  6. 8. <ul><li>MISSION </li></ul><ul><li>To maintain a competitive civil aviation environment, which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country. </li></ul>
  7. 9. <ul><li>The objectives of this policy are the creation and continued facilitation of a competitive and service-oriented civil aviation environment . </li></ul><ul><li>The interests of the users of civil aviation are the guiding force behind all decisions, systems and arrangements. </li></ul><ul><li>Safe, efficient, reliable and widespread quality air transport services are provided at reasonable prices. </li></ul>
  8. 10. <ul><li>Long-term leasing of airports at Delhi, Mumbai, Chennai and Kolkata to make them world class . This would help in attracting investment to improve infrastructure facilities and services at these airports. </li></ul><ul><li>AAI has planned a 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 for upgrading other non-metro airports. </li></ul>
  9. 11. <ul><li>100% FDI is permissible for Greenfield airports. </li></ul><ul><li>For existing airports, FDI up to 74 % is permitted through automatic approvals and up to 100% through special permission (from FIPB). </li></ul><ul><li>Private developers allowed setting up of captive airstrips and general airports 150 km away from an existing airport. </li></ul><ul><li>100% tax exemption for airport projects for a period of 10 years. </li></ul>
  10. 12. <ul><li>49 % FDI is permissible in domestic airlines , but not by foreign airline companies. </li></ul><ul><li>100% equity ownership by Non-Resident Indians (NRIs) is permitted but not by PIO. ( People of Indian Origins) </li></ul><ul><li>74% FDI is permissible in cargo and non-scheduled airlines. </li></ul><ul><li>The Indian government has set up an Airport Economic Regulatory Authority (AERA) to provide a level playing field to all players. </li></ul>
  11. 13. <ul><li>Domestic air transport policy debars foreign airlines from equity participation in companies formed for domestic air transportation. </li></ul><ul><li>Participation of foreign individuals/companies up to 49 % . </li></ul><ul><li>Participation of non-resident Indians (NRIs) / overseas corporate bodies (OCB) up to 100 % in domestic air transport services. </li></ul><ul><li>Foreign equity limit in the international services is 26 %. </li></ul>
  12. 14. <ul><li>Regulatory functions : responsibility of Directorate General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS). </li></ul><ul><li>Operational functions - performed by Air India Ltd., Indian Airlines Ltd., Pawan Hans Helicopters Ltd. together with other private sector airline operators. </li></ul>
  13. 16. <ul><li>Price </li></ul>
  14. 36. <ul><li>The Centre for Asia Pacific Aviation (CAPA) has forecast that domestic traffic will increase by 25 % to 30 % till 2010 and international traffic growth by 15 %, taking total market to 100 million passengers by 2010. </li></ul><ul><li>Govt. plans to invest US$ 9 billion to modernize existing airports by 2010. </li></ul><ul><li>Govt. is planning to develop around 300 unused airstrips. </li></ul>
  15. 37. <ul><li>Vision 2020 by the Ministry of Civil Aviation plans to create infrastructure to handle 280 million passengers by 2020 . </li></ul><ul><li>By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and 3.4 million tonnes of cargo per annum. </li></ul><ul><li>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. </li></ul><ul><li>Associated areas such as maintenance, repair and overhaul (MRO) and training offer high investment potential. A report by Ernst & Young says the MRO can absorb up to US$ 120 billion worth of investments by 2020. </li></ul>
  16. 38. <ul><ul><ul><ul><ul><li>Thank you </li></ul></ul></ul></ul></ul>