Airport management


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Airport management

  1. 1. AIRPORT MANAGEMENT SIREESH P. UAV- Flying instructor--------------------------------------------------------------------------------------------------------------INTRODUCTIONEvery thing which flies in the earth’s atmosphere have to obey the Law of Gravity,as a result they have to land at some point. The location, at which it lands, has tobe safe, secure and reliable. Similarly all the manned aircraft which fly into theatmosphere have to land after the completion of mission. As aircraft are of differentsize, different capacity and for various missions, airports have to gear up to thechallenges in accommodating all kinds of aircraft maintaining high standards ofsafety, security and reliability. Because a mile distance (runway) can take you toany place in the world, hence airports play very important role.Airports are the gateway for the country; they open doors for trade, tourism andthreat as well. Economy of a country depends on the trade and tourism, insequence the trade and tourism depends on the airports. A country withoutnational carriers can still trade with other countries and catch the fancy of tourists,but the country without an airport will be handicapped to advance economically.So it becomes very important for every country to have an airport.Existence of universe is based on the principle of dependence, in the same wayevery thing is dependent on one another. When it comes to the question of airlinesdepending on airport or airport depending on airlines, the answer is quitedebatable, at length one can say it as a phenomenon of interdependence andairport always had to adapt the needs of airplane. The evolution of airport and thechanging phases of airports over the years to valuable business centres arediscussed thoroughly in this paper.This paper concisely communicates on the subject of air transport economics,identifying key drivers affecting traffic volume, and the close relationship betweenair transport growth and the GDP. An attempt has been made by taking thepresent situation to demonstrate the effect on economy, after brief study of Indiangovernment policies; new thrust areas for successful airport management havebeen brought forward.
  2. 2. CHANGING FACES OF THE AIRPORT WORLD.Airports have grown from simple grass-covered fields into some of the busiesttransportation centres in the world, moving millions of passengers worldwide. Asairline traffic increases, new airports are built to accommodate more passengers.Local governments usually make the decision to construct or expand publicairports. Selecting a new airport site is a complex, time-consuming, and expensiveproposition. The money to fund construction for these airports comes from taxes orfrom the sale of bonds. Airport sites are selected based on airport traffic volume,the nearby population, availability of ground access, and existing air traffic flows.Once a proposed site has been selected, a detailed site plan is prepared. Aircraftnoise plans, environmental impact studies, and building designs must be approvedby the authority before funding can be obtained. Only after these tasks have beencompleted, then actual construction of an airport will begin.Flying for pleasure and adventure began during the 19th century, when Europeaninventors experimented with hot air balloons and gliders, the first powered flightsheavier-than-air machine occurred on December 17, 1903, when Orville Wrightand his brother Wilbur Wright made their historic flights at Kitty Hawk, NorthCarolina. By 1910 the air transport industry was established in Germany whenregular air service with gas-filled airships called dirigibles began to provide servicebetween cities.Early airplanes were light and had low operating speeds, so they could operatefrom any relatively level cleared field, these airfields had no designated runways,because the airplanes did not require specially prepared or paved surfaces.Because airfields were relatively easy to create in the early days of aviation, manycities had more than one airport. Terminal buildings, if they existed at all, wereoften multipurpose buildings housing the offices of a few airlines, weatherobservers, and air traffic controllers, as well as ticket counters, snack bars, andpassenger-waiting and baggage-pickup areas.On January 1, 1914, a group of Florida businesspeople launched the firstscheduled air service using an airplane. For a period of four months, the Saint
  3. 3. Petersburg-Tampa Air Boat Line transported a total of 1,200 passengers acrossTampa Bay in a two-seat Benoit seaplane. The trip took about 20 minutes, and theone-way fare was $5. The service folded at the conclusion of Florida’s wintertourist season, but it was the first such venture that indicated scheduled air servicecould be commercially viable. Similar passenger services in the United States andEurope soon followed.Passenger air service developed faster in Europe. World War I (1914-1918)devastated many of Europe’s roads and railroads. The war also proved the militaryvalue of airplanes and sparked a dramatic acceleration in aircraft production. At theend of the war, fledgling commercial air carriers took advantage of the ruinedground transportation system and the large surplus of aircraft and pilots. Airservice within Europe flourished, and by the 1930s government-sponsored airlineswere operating well beyond Europe to numerous European colonies in the MiddleEast, Africa, Asia, and Latin America.Airlines also had opportunities to fly new international routes, gaining an exposureby meeting military needs, aircraft engineers designed planes that were bigger,faster, and capable of flying farther than ever. Radar, which allowed pilots andcontrollers to get a better idea of situations in the air, made significant advances inEngland during World War II. Numerous technological advances were madebetween World War I and World War II (1939-1945) key to the development of theair transport industry. Navigation was greatly improved in the 1920s when rotatingbeacons began to mark air routes for night time flight. American aviator JamesDoolittle helped design the artificial horizon in the late 1920s. This instrumentshows pilots the angle the aircraft’s wings make with the ground and is importantfor flying in reduced visibility. Radio, which developed around the same time asaviation, made it possible for pilots to communicate with each other and withpeople on the ground (airport). By the 1930s radio signals from fixed locationswere guiding pilots to their destinations in darkness and poor visibility. Airportsadopted the necessary infrastructure for night flying. Engineers also madenumerous advances in aircraft design during the 1930s. Air-cooled engines helpedreduce weight and made larger and faster aircraft possible. Cockpit instruments
  4. 4. also improved, with better indicators for airspeed and rate of climb and betteraltimeters and compasses.Multiengine airplanes, introduced were heavier and needed longer paved runwaysto take off and land. As a new round of airport construction began, airport buildersfavoured sites away from central downtown districts, such as outlying farm areasor unpopulated marshlands. These marginal sites were inexpensive, providedenough space for expansion, and were also clear of obstructions such as tallbuildings. These second-generation commercial airports of the 1930s weredesigned to serve airplanes that usually carried up to 75 passengers. Becauseairplane capacity was still relatively small, all terminal functions were handled on asingle floor. Terminal buildings were usually of the gate terminal design, withairplanes on one side of the building and automobile parking on the other.As the war drew to a close, scientists working independently in Britain andGermany perfected the jet engine. With the introduction of jet airplanes intocommercial service in 1959, facilities at many existing airports became outdated orobsolete. To correct this, another round of construction and expansion began. Toallow long-range operations by the heavier and faster jet aircraft, runways nowneeded to be extended in length. Terminals designed for the passenger volumesof earlier, smaller aircraft were no longer adequate for the new jet airplanes.New concepts in terminal design that were implemented in the 1960s featuredmuch larger architecture than that of earlier terminals. Many new terminals werebuilt by specific airlines to serve their own customers.Making air transportation considerably faster and more comfortable for passengersand reducing airline maintenance costs through improved engine reliability. Jumbojets debuted in the 1970s and boosted airline carrying capacity. Also in the 1970s,the governments of France and Britain jointly developed the first commercial jet tofly faster than the speed of sound, the Concorde, radically reducing transatlantictravel times.
  5. 5. Airline deregulation was intended to foster competition in the air transport marketand bring better service and lower prices to air travellers and shippers. Numerousacademic and government studies have concluded that deregulation has beensuccessful. In the years following the deregulation, domestic air-transport industry,airlines began converting their operations to hub-and-spoke systems. In thissystem, an airline’s passengers are collected by flights from many spoke cities andare flown to a hub airport, which is normally located at a centralized point in theairline’s route system. Passengers arrive at the hub in a wave of flights arriving atapproximately the same time. During the time the airplanes are on the ground atthe hub, passengers transfer to other airplanes that are going to their ultimatedestination. Then all flights in the wave depart to the spoke cities and the wholeprocess begins again. This pattern is repeated throughout the day to provideservice at convenient frequencies During the 1980s the major airlines established“hub-and-spoke” route networks. These hub-and-spoke networks improved theservice and competition to most areas of the country. Airline prices have alsodeclined, when adjusted for inflation, and the new competitive climate has fosterednumerous innovations of benefit to travellers, including frequent-flyer programsand computer reservation systems that make it easier for travel agents to shop forand book air travel for customers.As soon as the international service has been started it has become necessary forairports to develop infrastructure in accordance with large body aircrafts such asessential runway length, fuel arrangements, taxiways, and maintain safety andsecurity of the state.Unlike domestic air service, international service remains highly regulated. Servicelevels between most countries is governed by bilateral aviation agreements thattypically specify which cities may be served, the frequency of the service, andsometimes even the total number of seats that can be offered for sale. Pricingrestrictions also are sometimes included in these government-to-governmentagreements, as well as restrictions on what carriers can do on the ground—forinstance, whether they can set up a trucking subsidiary to move freight to off-airport locations. International air service is growing less restrictive, but verygradually. Passengers entering any country need to have a visa, formal
  6. 6. endorsement placed by government authorities on a passport, indicating that thepassport has been examined and found valid by the nation to be visited, and thatthe bearer may legally go to his or her destination.Commercial aviation has become significantly safer since the early decades of theindustry. This is due in large part to better, more reliable aircraft and engines, aswell as better navigation and landing aids on the ground. Most accidents today aredue to human error or hijacking or it is also called as skyjacking or air piracy, isdefined as the forcible commandeering of an aircraft while in flight. Air hijacking isan offence punishable by long prison terms or execution. During the 1960s theincidence of airplane hijackings has became a serious problem. Planes werehijacked by exiles, by the mentally ill, by criminals fleeing the countries, and bythose bent upon extorting large sums of money. Beginning in 1968, politicalterrorists in Europe and the Middle East began to hijack passenger aircraft both forthe purposes of publicity and to obtain concessions from governments or therelease of imprisoned terrorists.This circumstances has lead the governments to have a check in the airportswhich began searching passengers and checking carry-on baggage by means of Xrays and metal-detector devices at major airports. These precautions played acritical role in reducing the number of hijackings. Unsuccessful hijackings alsoserved as deterrents to hijackers. One famous example was the June 1976hijacking by Palestinian and West German terrorists of an Air France plane to anairport in Entebbe, Uganda. A daring raid by Israeli commandos resulted in thedeaths of the hijackers and the rescue of more than 100 hostages; three hostages,however, died in the raid. After that incident, additional security precautions, suchas questioning passengers at the time of check-in, became common. Designatedhigh-risk national carriers, such as El Al of Israel, adopted measures such aspassenger profiling. In this technique, specially trained security personnelthoroughly question some passengers to identify patterns of activity or behaviourcharacteristic of terrorists and hijackers.At the beginning of the 21st century, at a time when a terrorist hijacking ofpassenger aircraft perhaps was regarded as having become less of a threat, the
  7. 7. most spectacular and lethal terrorist incident in history occurred. On September 11,2001, 19 hijackers belonging to the radical Islamic group Al-Qaeda seized fourcommercial passenger jets to carry out a devastating terrorist attack on the UnitedStates. The jets were deliberately crashed into the twin towers of the World TradeCentre in New York City and into the Pentagon, in Arlington, Virginia, killingapproximately 3,000 people. Evidence indicated that the hijackers had wieldedknives and box-cutters to hold the crew and passengers at bay while others whohad basic pilot training flew the planes into their targets. The September 11 attacksrapidly changed aviation security procedures. Formerly, airline policy directed thatpassengers and crew should stay calm and cooperate completely with hijackers asthe most likely means of ensuring their safety and survival. With the new possibilitythat aircraft would be used as weapons in suicide attacks, however, advisorieswere issued encouraging passengers and flight crew to forcibly resist any hijackingattempt. Pilots were required to remain behind locked, fortified cockpit doors toprevent anyone from gaining entry and seizing the controls. Additional securitymeasures were instituted in the airport, including more stringent identificationchecks of passengers and more thorough baggage screening.Several international agreements or conventions outlawing hijacking (Tokyo, 1963;The Hague, 1970; and Montréal, 1971) have been signed by countries throughoutthe world. Three international nongovernmental organizations—the InternationalCivil Aviation Organization, the International Air Transport Association, and theAirports Association Council International—have been established to developcommon aviation security polices and guide their implementation.The threat of terrorism aboard aircraft has motivated airports to increase securityand control over who and what gets onboard airplanes. Passengers must walkthrough metal detectors in many airports. Some airports and airlines use X-raytechnology, drug-sniffing dogs, and other security measures to examine baggagebefore it is loaded on an airplane.Epidemic is other major issue, where X-ray technology and sniffing dogs foundhelpless. Global spread of SARS and the recent SWINE flue is example ofepidemic. The global spreading of probable SARS cases on May 30, 2003, as
  8. 8. reported by the WHO and Centres for Disease Control and Prevention. The firstcases of SARS emerged in mid-November 2002 in Guangdong Province, China.The disease was then carried to Hong Kong on the February 21, 2003, and beganspreading around the world along international air travel routes, because touristsand the medical doctors who treated the early cases travelled internationally. Asthe disease moved out of southern China, the first hot zones of SARS were HongKong, Singapore, Hanoi (Vietnam), and Toronto (Canada), but soon cases inTaiwan, Thailand, the U.S., Europe, and elsewhere were reported. As airports arethe gate ways for any country, it is always easy and better to stop any sort of threatfor the state and its citizens. The modern airports have sophisticated healthcheckups for all the international passengers; it has become a necessary for all theinternational passengers to be thoroughly checked at the airports, and for thedoctors in the airport it is very important to know and be aware about the epidemicflu around the world.The air transport industry has grown enormously in the second half of the 20thcentury. The number of passengers worldwide grew from 177 million in 1965 to anestimated 3.3 billion in 2000.The modern airports around the world have beenconstructed with all the basic and luxury amenities to the passenger.As we have seen the progressive change in airport industry which in the past wasconsidered to be a simple transit areas but now the modern airports have becomeplace where one works, eats, makes purchases, and even sleeps. With theincrease in traffic, airports represent very large market potential. In fact airportshave proved their commercial success through London Heathrow, Seoul Inch-eonwith there hundreds of shops. Some of the best airports of today world are asfollows.It is up to building industry to suggest new commercial perspectives to airports andpotential risk of revenue loss if action is not taken. This is why increasingly thearchitectural design of airports is entrusted to internationally renowned designerssuch as Renzo piano and Paul Andreu who were asked to design the undulatingstructure of the Kansai airport in Osaka, Japan, the Kansai International Airport inOsaka, Japan, was built on an artificial island located in Osaka Bay. The island is
  9. 9. connected to the mainland by a bridge and is served by several ferries. The airportopened for business in 1994. Its location away from populated areas eliminatednoise-pollution problems, allowing Kansai to become the first Japanese airport thatis open 24 hours a day. The airport serves over 25 million passengers per year.The single runway is 3,500 m (11,000 ft) long, and a second parallel runway isplanned for the future. The British designer, Sir Norman Foster, imagined the lightfiled space for the recent airport Chep Lap Kok in Hong-Kong, the Hong KongChek Lap Kok International Airport opened in 1998. It has a single runway 3,800 m(12,400 ft) long, as well as facilities able to meet the demands of 35 millionpassengers and 3 million tons of air cargo shipped annually. A second runway isunder construction. The airport was built on an island that was excavated 27 m (90ft) down to reach solid bedrock and then refilled with topsoil. The terminal, which isover 1 km (0.6 mi) long, includes 75 gates. The total cost of the airport was $20billion, Japanese designer Kisho Kurokawa designed the airport of Kuala Lumpurin Malaysia and Denver International Airport is the newest major commercialairport in the United States., it opened in 1995. The airport covers an area of 137sq km (53 sq mi). It has five runways, each 3,700 m (12,000 ft) long. The runwaysare at least 1,300 m (4,300 ft) apart, permitting two or three streams of aircraft toland simultaneously. The control tower is 33 stories tall. The terminal andconcourses are in the centre of the airfield, cover 140,000 sq m (1,500,000 sq ft),and include 94 airline gates.The whole idea of modern airports is to provide a pleasant reception area withincreasingly commercial outlook; private rooms, game areas, religious facilities,malls, shopping centers. In the United States, passengers stop off in Pittsburgh,sometimes just to take advantage of the duty free shops there. In Chicago, in theinternational airport a gaint aquarium was built to relax passengers; in additionworks of art are also displayed. In Singapore, passengers can sunbathe in acactus garden next to a swimming pool. Other possibilities can be imagined suchas the setting up training courses for the airport staff in different languages so as toassist passengers.
  10. 10. INTER DEPENDENCE OF AIRLINE-AIRPORT-AIRSPACE SECTOR IN THEGLOBAL AVIATION MARKET DEVELOPMENT. AIRPORT AIRLINE PASSENGERExistence of universe is based on the principle of dependence in the same wayevery thing is dependent on other. When it comes to the question of airlinesdepending on airport or airport depending on airlines, the answer is quitedebatable, finally one can say it as a phenomenon of interdependence and airportsalways had to adapt the needs of airplanes.The fast and steady growth of the trade and tourism between the nations haschosen the air transport mode for its Quick, Reliable, Efficient and Safe services.The recent trends in the development of free trade, globalisation, liberalisation andderegulation left the mankind to race with time and they found air transport veryappropriate, thus propelled the aviation industry to paramount. It has beenassessed that every job in the aviation industry will create seven other jobs directlyor indirectly through its catalytic impact on tourism and business hence 2% growthin aviation industry leads to 1% growth in GDP. Alluring situation with enhanced airtraffic population, created a wider space for mushrooming of new airlines. But forsuch a drastic transformation in the field of airlines traffic, airports were not geared-up to with stand the passenger traffic congestion.Trade-off between operating cost and the revenue from passenger, a large aircraftcosts lot to operate, but can take many passengers, which lead to the recentdevelopments in the airline manufacturing technology such as huge body aircraftsand just beginning curiosity of space travel has prepared the airports to upgrade
  11. 11. there existing facilities or move over to green field airports. All markets arecomplex, but aerospace has peculiar intricacies involving the interplay among theaircraft manufactures, aircraft owners, aircraft users, regulatory authorities, airportoperators, municipalities, conservationists and other visited interests and stakeholders. An excellent recent example is the airbus A380. Although design of theA380 was conventional in most respects, the exceptionally large size of the aircraftraised multiple new issues with people and organisations involved, directly orindirectly, with its introduction. Compared to the largest operational airliner of thetime, the A380 weighed 30percent more, had a wing span 16 meter wider, was 6meters higher, and carried at least 150 more passengers. The positive appeal ofthe aircraft was, of course, that it could carry larger quantities of passengers onhigh density routes, at costs that were projected to be lower than those for smallercontemporary aircrafts. However at the time of launch was announced, virtually noairport in the world could adequately accommodate the aircraft. Runways were toonarrow, or were too small; passenger’s gates were inadequate; hangers were toosmall; passengers jet ways could not reach doors on the upper deck; and customsand baggage-handling facilities were inadequate to handle the surge ofpassengers. In additional airworthiness authorities feared lingering turbulencecreated by enamours aircraft would create flying conditions unsafe for smalleraircrafts, so exceptional mandatory runway shutdowns were imposed for severalminutes after each A380 take off and landing. And by 2005, 14 internationalairports worldwide had committed to make infrastructure investments, estimated at$ 100 million per airport, to accommodate the new aircraft. Constructing a newairport is always a expensive proposition hence It’s nearly always easier to modifyan existing airport than to create new one, however, with the time, city growstowards the airport and the space becomes inadequate for airport extension andhandling of increasing passenger traffic. Green field airports to be of internationalstandards demands huge investment, this created opportunity for many privateindustries to partner with government. The new business model public privateconsortium is a success in revenue generation not only from air side but fromterminal and land side as well.Development in information technology has come as a support for the aviationindustry in many ways viz. Airline Resource Management System (ARMS),
  12. 12. Centralised Reservation System (CRS), Radio Frequency Identification (RFID),Baggage Tracking System, Ground Handling and Automatic Check in Scannersetc. Technology reduced the interaction time between passenger and airline staff,airport management. More than one passenger can be handled in the same timewhere it used to be one before, baggage shipping and discharge time has reducedto greater extent, resulting in faster turnaround time for airlines. Reduced parkingand turnaround time keeps the airplanes in air for extra time, resulted in increasedrevenues. Similarily airports enhancing there revenues by accommodating morenumber of aircrafts.With reduced parking, turnaround time and increasing passenger traffic morenumber of airlines are emerging and existing airlines extending their fleet size, somany airplanes in air shoots new problem air traffic and the situation is veryalarming. Now air traffic control is a biggest challenge for every country.Communication Navigation Surveillance / Air Traffic Management with thesophisticated and the latest instruments with new AeronauticalTelecommunication Network (ATN) when introduced will allow full inter operabilitybetween different air and ground sub systems. The satellite based navigation willgive a global accuracy in order of at least 100 meter of actual position. This willallow it to be used en-route, terminal and for non precession approach phases offlight, with suitable ground augmentation, it will achieve accuracy which will permitprecision approaches to be conducted at any airfield, heliport or landing strip.There are certain things which we cannot avoid but we develop new technology tosustain significant weather such as thunderstorm, gale, cyclonic storm and suchsever weather conditions are reported as SIGMET. Airport Met offices issueroutine hourly met reports (METAR) and Special weather reports (SPECI) areissued when weather conditions deteriorate, such as fog, poor visibility etc basedon the minimum visibility and cloud criteria, flight conditions are reported as VisualFlight Rules (VFR) and Instrument Flight Rules (IFR).
  13. 13. RESEARCH IN AIR TRANSPORT ECONOMICS TO IDENTIFY KEY DRIVERSAFFECTING TRAFFIC VOLUME AND THE CLOSE RELATIONSHIP BETWEENAIR TRANSPORT GROWTH AND THE GDP.The impact of air transportation on economic activity differs from othertransportation modes because of its distinctive characteristics speed, cost,flexibility, reliability, and safety. It is the only realistic long-distance Transportationmode for high-value perishable commodities and time-sensitive.Air transportation provides employment in the aviation sector and creates widersocioeconomic benefits through its potential to facilitate certain types of activities ina local economy. The availability of air transportation services effectively increasesthe scope of new business and industrial economic activity. The increasingeconomic activity in turn generates the need for passenger travel and freight anddrives the demand for air transportation services. Studies evaluate the direct,indirect and induced employment impact of air transportation. Direct impact isemployment in the aviation industry, indirect impact is the employment in theindustries down the aviation supply chain, and induced impact is the employmentsupported by the expenses of those directly and indirectly employed in the aviationindustry, studies has been assessed that every job in the aviation industry willcreate seven other jobs directly or indirectly through its catalytic impact on tourismand business. At the macroeconomic level, air transportation impacts economy byproviding employment and by enabling effects including enabling access: tomarkets, to people, to capital, to ideas and knowledge, to labor supply, to skills, toopportunity, and to resources. The economy in turn provides capital and generatesdemand for passenger and freight travel.Aerospace trade shows are excited working environments. The large internationalshows generally involves huge money, major international air shows generallybiennial, have first-class permanent exhibit facilities, accommodations and logisticssupport for large number of flying aircrafts, off-runway space for static display, wellequipped conference facilities, on site luxury hospital facilities and extensivecommunication support for media and trade representatives, it requires a milliondollar budget to participate fully at an international air show, with a flying demo , a
  14. 14. hospitality chalet, a major exhibit, and a team of professionals this brings a hugerevenue to the host country.Airports are among the busiest transportation centres. The business they create isvital to the world economy and individual national economies. In the United States,over 500 airports provide airline passenger service to about 600 million peopleannually. These airports also handle about 15 million metric tons of air cargo eachyear. Canada’s 26 airports in its National Airport System provide service to about60 million passengers annually. The total annual economic impact of U.S. airportsis estimated at over $500 billion. This value includes the price of airfarespurchased by passengers, the salaries of airline and airport employees, taxes, andindirect earnings from related businesses and industries. Airports are so importanteconomically that many companies will locate factories and offices in cities whichhave an adequate airport.Indian aviation industry is one of the most dynamic and fastest growing industries.India’s burgeoning economy, coupled with loosening of government’s control andentry of private sector airlines, have exerted a positive impact on the aviationindustry.Air traffic in term of passenger and cargo movement has increased impressivelyfrom 2003-04 to 2007-08. The passenger traffic has increased by a compoundannual growth rate (CAGR) of 19.14% and cargo by 9.91% which are116.87million passengers and 1.71 million tonnes respectively.The air transport industry supports a wide range of businesses. These includeindependent maintenance and repair shops, food caterers, aircraft cleaningservices, fuelling services, and airport security firms. The industry supports schoolsfor pilots, flight attendants, and mechanics, as well as travel agencies, hotels, carrental companies, and other businesses in the travel and tourism industry. Thepromising growth of civil aviation market has attracted so many private players toparticipate in scheduled & non-scheduled air services. With so many new playersin market such as Jet airways, Jet-lite, King Fisher, Go air, Indo go, Spice jet,Paramount, Indian & Air India are still unable to handle the demand of the traffic.And the forecasts estimate that Indian civil aviation market will progress at a
  15. 15. growth rate of 8.6%. To recover the deficit and with stand the traffic demand manyair lines has placed order for new aircrafts and statistics are follows as. Average estimation order book of all scheduled airlines operating in India AIRWAYS CURRENT ORDERBOOKED Price of order FLEET SIZE FOR NEW AIR book LINES In USD Billions Indian 61 32 1.9 Air India 102 66 3.7 Jet air ways 84 44 2.5 Jet lite 25 10 0.60 Kingfisher 44 107 7 Indigo 15 100 6 Go air 5 41 2.4 Spice jet 6 10 0.60 Paramount 12 15 0.65 Total 342 393 25.35 180 Current Fleet 160 Expected Fleet Size Order Booked 140 120 100 80 60 40 20 0 Indian Air India Jet air ways Jet lite Kingfisher Indigo Go air Spice jet Paramount Note: All the statistics shown above are taken form 2007-08 financial years Note: All the statistics shown above are taken form 2007-08 financial yearsIt can be seen from the above statistics that India’s scheduled airlines have bookedthe order of 25 billion from different manufacturer’s viz. Boeing, Airbus, ATR, andEmbraer. In large scale international aerospace sales, the customer may insist that
  16. 16. aircraft seller provide the buyer’s country with certain kinds of industrial benefits asa condition of scale. Commitments to provide these compensatory industrialbenefits, known as offsets, government plays a major in obtaining the benefits fromthe exporter, as large amount of money are involved in major international sales ofaircraft and the value of offsets is proportionately high. But the third applicableagreement is the bilateral 1992 U.S-EC agreement on trade in large civil aircraft.This agreement interprets article 4.3 of GATT agreement on trade in civilaircraft as prohibition offsets. Although sales of commercial airlines are notnormally tied to formal offset requirements, the aircraft manufactures often strive toplace industrial work in the country of the purchaser, in order to strengthenrelations with the local government. This is especially true in countries like Indiaand china where the national government exercises significant influence overaircraft selection.Hence it is mistakenly believed that the product is that export country is selling toan independent government, where as in reality they are selling a package ofbenefits that includes aircrafts, jobs, technology transfer, profits for industry, and soon. The total number of air passengers in India during 2007-08 was 116.87million including 29.81 million international passengers. Crossing the level of 100million has made India 9th largest aviation market in the world; even then also airtravel in India is less than 7%, leaving very huge potential for the aviation market.In future the number of aircrafts flying will be two times of the current fleet size, theaverage no of people required to work on each aircraft is 100 hence forthrequirement of 4000 manpower for maintenance, beside of it, new airports has tobe built to accommodate the airlines, maintenance repair and overhaul is a hugerevenue generating segment, air traffic control, airport security are the otherissues. The growth in the aviation industry will broaden business scope for travelagencies, hotels, car rental companies, and other businesses in the travel andtourism industry. It has been assessed that every job in the aviation industry willcreate seven other jobs directly or indirectly through its catalytic impact on tourismand business hence 2% growth in aviation industry leads to 1% growth in GDP.Foreign Trade: Despite odds (raw material prices, high borrowing rates, losses dueto forward contracts) the country did export goods worth USD 60 billion, posting24.6% growth during the first four months of 2008-09 as compared to 18.22% inthe previous year. The reason ascribed to high exports growth was increased
  17. 17. demand in some of the international markets. The weakening of Rupee has helpedthe exporters to recover their (those who have not hedged their funds) lossesmade in the past. However, those who opted for a forward cover during the dayswhen Rupee was maintaining Rs 38-40, failed to insulate themselves from thequick and sharp weakening of Rupee. The import bill swells due to obviousreasons and widens the trade deficit even further. The huge potential of Indianexports cannot be achieved without the support of aviation sector. In order to havea better imports and exports, country should have established aviation industry.Hence this relation becomes proportional. The growth in aviation industry is directlyrelated to the economics of the country. The following table represents the exports and import with India Export Import Region/Countr % % y US $ million US $ million change change 2008- 2007-08 2008-09 2007-08 2007-08 2008-09 09 World 10952.8 15960.9 45.72 17744 24753.2 39.5 Africa 1235.1 1341.3 8.6 1952.1 2022.8 3.62 Egypt 69.3 227.4 228.3 126.9 110.4 -12.96 Kenya 120.3 113.2 -5.87 5.3 8.2 55.4 Mauritius 77.7 129.2 66.3 0.7 1.3 77.43 Nigeria 54.6 86.3 57.9 736.3 660.6 -10.28 South Africa 94.6 113.9 20.37 289.5 482.7 66.73 America 1737.7 2427 39.67 1414.4 2281.4 61.3 Brazil 118.6 266.2 124.53 39.2 87.2 122.12 Canada 78.7 101.8 29.32 87.6 122.4 39.73 Mexico 34.8 51.7 48.79 126.3 207.3 64.08 USA 1391.2 1718.2 23.51 818.3 1124.9 37.47 Asia (excl. 3563.2 5058.4 41.96 5117 6799.5 32.88Middle East)Bangladesh 182.5 239 30.96 14.8 27 81.75Korea Republic 223.2 309.7 38.789 414.7 622.4 50.09(South) Malaysia 98.9 260.7 163.71 382.5 651.2 70.26 Nepal 103.5 176.6 70.6 25.2 46.8 85.37
  18. 18. Philippines 28.3 57.3 102.42 17.3 11.3 -35.07Singapore 658.5 854.3 29.73 706.9 916.6 29.67Sri Lanka 259 304.9 17.74 24.1 35.1 45.38Taiwan (Taipei) 112.7 102.2 -9.34 149.8 192.3 28.38Thailand 80 194.2 142.72 169.5 201.6 18.95Viet Nam 83.4 198.6 137.97 9.9 30.4 208.38Middle East 1844.9 2786 51.01 4328.7 6862.6 58.54Iran 132.6 120.7 -8.96 762.8 1015.4 33.12Iraq 9.2 42.1 358.13 381.4 875.9 129.64Israel 98.6 130.6 32.49 120.7 67.6 -43.96Kuwait 57.9 85.7 48.15 501.3 704.1 40.45Saudi Arabia 154.5 431.1 179.02 941.8 1564.9 66.16UAE 1080.7 1721.9 59.33 1099.1 1659.9 51.02Europe 2476.3 4105.9 65.8 4225.4 5799.9 37.26Belgium 312 399.4 28.02 404.2 152.5 -62.27Denmark 32.3 45.1 39.61 34.5 39.8 15.56France 193.5 291.6 50.67 152.7 263.6 72.66Germany 313 548.7 75.32 699.2 907.6 29.8Italy 266.2 381.5 43.31 235.1 535.5 127.8Netherlands 234.9 553.9 135.82 145.3 169 16.31Russia 61.7 94 52.34 138.6 258.8 86.65Spain 142.1 407.9 186.98 51.8 73.7 42.31Sweden 32.5 49.1 50.96 190.8 191.7 0.48Switzerland 62.8 55.2 -12.02 1334.3 1965.2 47.28Turkey 121.4 150.3 23.84 80.5 266.1 230.57UK 445.1 589.6 32.46 366.5 341.7 -6.77Oceania 70.6 109 54.31 689.8 964.9 39.89Australia 59.2 86.9 46.79 655 920 40.46China 660.3 1057.3 60.11 1766.9 2575.9 45.79Hong Kong 417.6 500.8 19.92 332 116.7 -64.85
  19. 19. A 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 fr ic a Eg yp K t e M nya au rit iu N s So ig import 07-08 ut er h ia A fr A ic m a er ic a B ra zi C import 08-09 an l A ad si a M a (e ex xc ic l. o M id U dl SA e B Ea an st gl ) ad es h C H h on i n g a K In o do ng K ne K o si or re a ea a D Ja R P pa ep R n ub ( N li c or t (S h) ou M th al ) ay si a N Ph ep i li a pp l Si in ng es ap or Ta Sr e iw i L an an ( T ka ai p Th e i) ai la Vi nd e M tN id am dl e E as t Ira n Ira q Is ra el Sa Ku ud w i A ai t ra bi a U A Eu E ro B p el e gi D um en m ar Fr k an G ce er m an yAbove graph compares the growth in imports between years 2007-08 to 2008-09 N et It a he ly rla nd s R us si a Sp a Sw in Sw e d itz en er la nd Tu rk ey O UK ce an A us i a tr al ia
  20. 20. A 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 fr ic E a gy K pt M en au ya ri tiu S Ni s o ge u th ria A fr A i m ca export 08-09 export 07-08 e ri ca B ra C zil A an si a a M da (e x ex ic cl .M o id U d SA B le an E as gl t) ad es h H C o hi ng n a K In o do ng K Ko n o es re rea a ia R DP J a ep R p ub (N an lic o r t (S h ) o ut M h al ) a ys ia P N hi ep lip a l S pi n in ga es T S po a i ri r w L e an an (T ka a ip T h ei ) ai la V i nd M et id N d am le E as t Ir a n Ir aq Is ra S K el au uw d i A ait ra b ia U E A ur E op B el e g D iu en m m a Fr rk an G er ce m an N y et IAbove graph compares the growth in exports between years 2007-08 to 2008-09 h ta er ly la nd R s us si S a p S a in S w w ed it ze e n rl an T d u rk ey O UK ce an A us ia tr al ia
  21. 21. Future ProspectIn the years to come, the Indian aviation industry is poised to grow and wouldposition itself among the top aviation markets globally. This is very clear from thefact that the country is geographically spread with huge population. Besides, it isexports and imports helping India becoming an economic power.” In 2004, thesector started slowly with probably 100 plus aircraft. It was very small then, for acountry like India. Though we have not grown big, over the years, the size of theaircrafts which the airline companies have is a clear testimony to the fact that theaviation industry is here to stay”. As aviation industry and economy are interdependent, with the growth in aviation industry economy grows as well.
  22. 22. STRATEGIC OPTIONS AND MANAGEMENT TECHNIQUES TO MAXIMISEAIRPORT REVENUE.Airports are owned and operated by many different agencies. Most small airportscan be privately owned. Large commercial airports are usually owned by citygovernments, regional port or airport authorities, or state. Most airports areoperated by the agencies that own them, but some are operated by privateorganizations that have a contract to operate them or that lease them from theirowners. Some private companies have purchased entire airports from their ownersand operate them for profit.The transition of airport from a mere platform to an enterprise is new phenomenon,the goal of airport management becomes profit maximisation from what eversource of business derived from a broader concept of ‘flight experience’, whether itbe strictly related to aircraft services, or to more diversified value objectives. Theco-branding and co-marketing partnerships between airports and airline operatorsor other value chain players, like tour operator and travel agencies, andannouncement of economic schemes for carriers. In order achieve correct marketpositioning an airport enterprise will need to conduct an exploratory marketresearch study, aimed at understanding both the quantity and quality of currenttraffic values and the potential purchase intentions of its catchments area. Eachgeo-commercial area will show different trends due to stronger business- industrialor leisure tourist element the basic fundamental principle of marketing is sell whatcustomer wants in order to generate a consistent value system.Airports receive revenue from a number of sources. Airports charge landing fees tothe airlines for each airplane that lands and takes off from the airport. Airlines, foodservice companies, and retail establishments rent portions of the terminal. Anairport also makes money from fees charged at parking lots. Airports can alsocharge a fee on each ticket sold to pay for improvements. Expenses involved inoperating an airport include terminal and runway maintenance; utilities such aswater, electricity, and heat; airport administration and salaries; and fire andsecurity services.
  23. 23. The Air port revenues mainly divided into aviation related and non aviation relatedand they are ‘Land Side and Air Side’, Terminal Side respectively.Airside: Airside is used for the landing and takeoff of aircraft Runways are thelong, narrow areas where airplanes take off and land. Taxiways are paths thataircraft follow from the runways to the terminal building, Maintenance andrefuelling facilities for aircraft are located near the runways or in nearby hangars.The control tower is located near the terminal. From this tower, people involved inair traffic control coordinate aircraft movement both in the air and on the ground.Terminal side: Mainly the confined audience consists of traditional origin,destination and transit passengers. Travellers may pass their time before boardingthe aircraft not only spending by shopping in various arcades of the complex butalso relaxing close to interesting activity such as with a long row of bass and pubsand possible to have drinks while listening to there favourite music, children’s mayplay their favourite videogame in dedicated zone while film lovers will have movietheatres and sports fans have sports arena There can also be a fitness centre withsauna & Jacuzzi, for aviation enthusiasts there is a garden terrace with chairstables, umbrellas and an excellent view of the runway and there are no limits forshooting picture When transit passengers have to wait for long hours for next flightto depart they can have a chance of going for free city tour etc.Land side: The ‘greeters and meters’ coming to airport to accompany or pick-upvisiting friends and relatives, travellers or job-related contacts. Access from landside to air side areas is tightly controlled at most airports the parking area busstops and train stops come under the land side. Presence at industry fairs, orevents concerning the whole tourism industry, like world travel market in Londonthis will be a good airport enterprise focus on both aviation and non aviationrelated value proposition.
  24. 24. Thrust areas for successful airport management.• Private sector will be a major thrust area in the civil aviation sector for promoting investments improving quality and efficiency and increasing competition. Encouragement of private sector investments in the construction, up-gradation and operation of new and existing airports including cargo related infrastructure.• For the building industry, this new trend is an opportunity.• The rapidly growing aviation industry of India is facing the huge shortage of pilots according to the estimates; aviation sector will require 6000 additional certified pilots from 2008-2013. To deal with the shortage of pilots, government has taken various steps such as allowing 100% FDI in flying training institute and technical trading institutions. Training for pilots is becoming more technologically advanced, extensive and with increasing fuel prices pilot training has become very expensive affair, major advancement in pilot training in recent years include the development of flight simulators that enable pilots to train for adverse conditions and situations that would be difficult or dangerous to replicate in the real airplanes.• An FDI upto 100% on the automatic route would be allowed for Maintenance and Repair and Overhaul was given by the Indian government, with the increasing no airlines and airplanes it becomes very essential for MRO facilities. Increased activity in MRO sector has attracted many foreign companies. Lufthansa has tied up with GMR Hyderabad international airport limited to open an MRO with a investment of USD 20 million. Similarly, Boeing plans to invest USD 100million in MRO facility at Nagpur.• An FDI up-to 74% on the automatic route for ground handling services would be allowed subject to sectored regulations and security clearance. NRI investment would be allowed upto 100% on the automatic route.
  25. 25. Conclusion: This paper discusses air transportation and economic activitiesinterdependence. Air transportation provides employment and stimulates certaineconomic activities. The economy, in turn, drives the demand for air transportationservices. The objective of this work is to analyse and understand interdependenceof air transportation and economic activity. More specifically, this work is aimed at(1) developing a feedback model to describe the relationship between airtransportation and economic activity and (2) identifying the factors which stimulateor suppress air transportation development. Exploratory Research Method whichcombines literature review, aggregate data and case study analysis is used as atool in this work for the analysis and understanding. The case study analysis at theindividual segment of value chain is performed to understand the air transportationimpact in each individual level of value chain. These findings help to develop afeedback model which describes the relationship between air transportation andeconomic activity. Specifically, the analysis is used to describe (1) how airtransportation of passengers and cargo enables the flows of goods, services,knowledge, tourism, investment, remittances and labour among economies and (2)how air transportation can affect the country’s economic factor, demand andbusiness conditions. The paper is extended to perform quantitative analysis of theevolution enabling impact of air transportation in a particular (Indian) economy.The following factors can stimulate or suppress the economic activities and areidentified both from the air transportation supply and demand sides. The supplyside change factors are identified as: changes in the regulatory framework,infrastructure capability, airport capability and airline strategy. The airtransportation demand is found to be directly affected by exogenous demandshocks, economic downturns, political and economic sanctions, and thedevelopment of other transportation modes. The analysis also identifies thefollowing change factors which affect the demand indirectly by changing thecountry’s economic attributes: economic liberalization, institutional and politicalreforms, supporting infrastructure investment, exchange rate fluctuations, politicaland macroeconomic stability, growing consumer demand, and changes inmanagement practices. This analysis of stimulating and suppressing factors helps
  26. 26. to describe the role of government intervention in changing air transportationsystem development and its impact on economic activity. The results of this workcan guide further development efforts, investment and policy decisions pertainingto air transportation usage especially in developing economies.References:Airport Design And Operation: Antinin Kazda & Robert E. Caves.Airport Operation: Norman Ashford, H.P. Martin Stanton & Clifton A. Moore.Encarta Reference LibraryWww.Aerosite.NetInternational Civil Airports Association.ICAO (2006) Safety Management Manual.Aerospace Marketing Management: Philippe Malaval & Christophe BenaroyaMarketing in the International Aerospace Industry: Wesley E. SpreenStrategic Management In the Aviation Industry: Werner Delfmann, Herbert Baum, Stefan Auerbach & Sascha AlbersStudies in Aerospace Law Dr. Nagendra Singh & S.BhattAircraft Finance Berend J.H. Cranswww.icao.comwww.iata.commonthly economic analysis-------------------------------------------------------------------------------------------------------------- SIREESH P. FLYING INSTRUCTOR (UAV’S) AIRCRAFT RESEARCH AND DESIGN CENTER, HINDUSTAN AERONAUTICS LIMITED Email id:, Mobile no: +91- 9740287428.