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A PRESENTATION ON AIRLINE SECTOR IN INDIA
- 2. “Soaring beyond the clouds.” Buddy Mentors Nikita Aundhakar Krishna Kumar Faculty Mentor Prof. Bandhamukta Rupwate
- 3. OVERVIEW • Aviation Industry: Civil aspect • Ninth largest civil aviation market • Deals in passengers and freight • Governed by ICAO guidelines • Regulators: DGCA & AAI www.crisilresearch.com
- 4. INSIGHTS • Employment • Contribution to GDP • To become 3rd largest by 2024 • Growth drivers – Growing demand – Policy support – Increasing investment
- 5. IndiGo, 49% SpiceJet, 14.8% Air India, 13.5% GoAir, 11.1% Air Asia, 6.3% Vistara, 4.7% Others, 0.6% Indigo SpiceJet Air India Go Air Air Asia Vistara Others www.crisilresearch.com
- 6. GROWTH IN DOMESTIC PASSENGERS 87 77 89 106 122 117 122 139 169 206 243 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 www.crisilresearch.com
- 7. PASSENGER SEGMENTS Air Travel Market Segments Urgent Travelers Business Travelers Budget Conscious We’re off again Loyal to loyalty programs
- 8. FREIGHT • Perishable goods • High value goods • Dangerous commodities www.civilaviation.gov.in
- 9. CHALLENGES Cost of aircraft Cost of fuel Airport charges Operating cost Taxation on ATF Cost of service Low air fare Reduced profit margin LOSSES
- 10. GOVERNMENT INITIATIVES RCS 480 Cr 100% in greenfield & 74% in brownfield 5 airports Expecting 15 projects www.civilaviation.gov.in
- 11. TRENDS Non- Aeronautical Revenue Travel & Tourism Airport Modernization
- 12. OPPORTUNITIES • Improved system infrastructure • Bio-metric • Aviation biofuel • Artificial intelligence • Mobile solutions
- 13. KEY RISKS FOR AIRLINES www.crisilresearch.com
- 15. THANK YOU
Editor's Notes
- The topic is Airlines industry which is a part of Aviation industry. There is sometimes confusion between the two and the words are used interchangeably, but that doesn’t accurately describe either of them. Aviation includes both civil and the military aspects. Airlines industry is basically civil aviation aspect. It deals in passenger and freight transportation. Directorate General of Civil Aviation is the regulatory body set up by the government.
- India is the ninth largest civil aviation market in the world as of 2018 according to international Air Transport Association (IATA). It employs 3,90,000 people and supports another 5,70,000 in the supply chain. The reasons for growth in this industry is due to expanding middle income group and working population, increase in tourists, etc. which leads to more policy focus on infrastructure and FDI encouragement. This attracts investment from private sector.
- IndiGo is the leading the market with a share of 49%. It is followed by SpiceJet at 14.8%, Air India at 13.5%, GoAir at 11.11%, Air Asia at 6.3 %, and Vistara at 4.7%. Other companies comprise 0.6% of the market share.
- India’s passenger* traffic grew at 16.52 per cent year on year to reach 308.75 million in FY18. It grew at a CAGR of 12.72 per cent during FY06-FY18. Domestic passenger traffic grew YoY by 18.28 per cent to reach 243 million in FY18 and is expected to become 293.28 million in FY20E. International passenger grew YoY by 10.43 per cent to reach 65.48 million in FY18 and traffic is expected to become 76 million in FY20E.
- In FY18, domestic freight traffic stood at 1,213.06 million tonnes, while international freight traffic was at 2,143.97 million tonnes. India’s domestic and international aircraft movements grew 7.93 per cent YoY and 6.36 per cent YoY to 2,153 thousand and 453.61 thousand during 2018-19, respectively.
- Key investments and developments in India’s aviation industry include:AAI is going to invest Rs 15,000 crore (US$ 2.32 billion) in 2018-19 for expanding existing terminals and constructing 15 new ones.In June 2018, India has signed an open sky agreement with Australia allowing airlines on either side to offer unlimited seats to six Indian metro cities and various Australian cities.The AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and Dibrugarh as intra-regional hubs.Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers are exempted completely from customs and countervailing duties