Different eras through which the industry has evolved A)Pre Nationalization First Indian Airway was TATA Airlines, division of TATA Sons Ltd
B) Post Nationalization and Pre liberalizationGovernment of India changed TATA Airlines to Air India.two major airlines operating in India, both owned andcontrolled by the Government of India were – Air India Indian Airlines.A third government-owned airline Vayudoot,
C) Liberalization•The liberalization in civil aviation industry began in1986•with the introduction of Air Taxi system to boostdevelopment of tourism.
D) Post Liberalization and PrivatizationAfter the Liberalization process, as agovernment of India opened the sky, anumber of private players includingJet Airways,Air Sahara,Modiluft,Damania Airways,NEPC airlines andEast West Airlinescommenced domestic operations.
E) Entry of Low Cost Carriers (2003)•A low-cost carrier or low-cost airline•is an airline that offers generally low fares in exchange for eliminating manytraditional passenger services.•Indias first low-cost airline, Air Deccan started service on August25, 2003.•Stiff competition from SpiceJet, GoAir , IndiGo and Paramount Airways
• elevated fuel prices over the last three quarters coupled with intense competition• unfavorable foreign exchange environment has again deteriorated the financial performance of airlines.• there are two key challenges: ▫ aviation economics is currently not favorable in India resulting in weak financial performance of airlines and ▫ Internationally, too airlines are going through period of stress which could possibly dissuade their investment plans in newer markets
Indian aviation sector: Losses, pilotsexodus, fuel surcharge play spoilsport
Indian Carriers: The FDI proposal, if approved, would certainly be an importantmilestone in the aviation sector and may provide much-needed relief to the domestic aviationindustry reeling under the pressure of mounting losses and rising debt burden Foreign Carriers: It will not just provide entry into one of the fastest growing aviation market globally but also an opportunity to establish India as their hub for connections between US/Europe and South-East Asian countries
the Government on its part has recently initiated a series of measuresincluding(a) proposal to allow foreign carriers to make strategic investments (up to49% stake) in Indian Carriers(b) proposal to allow airlines to directly import ATF(c) lifting the freeze on international expansions of private airlines and(d) financial assistance to the national carrier.However, these steps alone may not be adequate to address thefundamental problems affecting the industry.