The document discusses the evolution of airports from simple grass fields to major transportation hubs. It describes how early airports were small and basic but grew in size and complexity as planes increased in capacity and number of passengers. Modern airports now incorporate many commercial activities beyond just transportation and require advanced infrastructure, security measures, and health screening to accommodate international travel and respond to threats like terrorism and disease outbreaks.

1. AIRPORT MANAGEMENT
SIREESH P.
UAV- Flying instructor
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INTRODUCTION
Every 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 to
be safe, secure and reliable. Similarly all the manned aircraft which fly into the
atmosphere have to land after the completion of mission. As aircraft are of different
size, different capacity and for various missions, airports have to gear up to the
challenges in accommodating all kinds of aircraft maintaining high standards of
safety, security and reliability. Because a mile distance (runway) can take you to
any place in the world, hence airports play very important role.
Airports are the gateway for the country; they open doors for trade, tourism and
threat as well. Economy of a country depends on the trade and tourism, in
sequence the trade and tourism depends on the airports. A country without
national 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 way
every thing is dependent on one another. When it comes to the question of airlines
depending on airport or airport depending on airlines, the answer is quite
debatable, at length one can say it as a phenomenon of interdependence and
airport always had to adapt the needs of airplane. The evolution of airport and the
changing phases of airports over the years to valuable business centres are
discussed 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 between
air transport growth and the GDP. An attempt has been made by taking the
present situation to demonstrate the effect on economy, after brief study of Indian
government policies; new thrust areas for successful airport management have
been brought forward.

2. CHANGING FACES OF THE AIRPORT WORLD.
Airports have grown from simple grass-covered fields into some of the busiest
transportation centres in the world, moving millions of passengers worldwide. As
airline traffic increases, new airports are built to accommodate more passengers.
Local governments usually make the decision to construct or expand public
airports. Selecting a new airport site is a complex, time-consuming, and expensive
proposition. The money to fund construction for these airports comes from taxes or
from 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. Aircraft
noise plans, environmental impact studies, and building designs must be approved
by the authority before funding can be obtained. Only after these tasks have been
completed, then actual construction of an airport will begin.
Flying for pleasure and adventure began during the 19th century, when European
inventors experimented with hot air balloons and gliders, the first powered flights
heavier-than-air machine occurred on December 17, 1903, when Orville Wright
and his brother Wilbur Wright made their historic flights at Kitty Hawk, North
Carolina. By 1910 the air transport industry was established in Germany when
regular air service with gas-filled airships called dirigibles began to provide service
between cities.
Early airplanes were light and had low operating speeds, so they could operate
from 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, many
cities had more than one airport. Terminal buildings, if they existed at all, were
often multipurpose buildings housing the offices of a few airlines, weather
observers, and air traffic controllers, as well as ticket counters, snack bars, and
passenger-waiting and baggage-pickup areas.
On January 1, 1914, a group of Florida businesspeople launched the first
scheduled air service using an airplane. For a period of four months, the Saint

3. Petersburg-Tampa Air Boat Line transported a total of 1,200 passengers across
Tampa Bay in a two-seat Benoit seaplane. The trip took about 20 minutes, and the
one-way fare was $5. The service folded at the conclusion of Florida’s winter
tourist season, but it was the first such venture that indicated scheduled air service
could be commercially viable. Similar passenger services in the United States and
Europe 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 military
value of airplanes and sparked a dramatic acceleration in aircraft production. At the
end of the war, fledgling commercial air carriers took advantage of the ruined
ground transportation system and the large surplus of aircraft and pilots. Air
service within Europe flourished, and by the 1930s government-sponsored airlines
were operating well beyond Europe to numerous European colonies in the Middle
East, Africa, Asia, and Latin America.
Airlines also had opportunities to fly new international routes, gaining an exposure
by meeting military needs, aircraft engineers designed planes that were bigger,
faster, and capable of flying farther than ever. Radar, which allowed pilots and
controllers to get a better idea of situations in the air, made significant advances in
England during World War II. Numerous technological advances were made
between World War I and World War II (1939-1945) key to the development of the
air transport industry. Navigation was greatly improved in the 1920s when rotating
beacons began to mark air routes for night time flight. American aviator James
Doolittle helped design the artificial horizon in the late 1920s. This instrument
shows pilots the angle the aircraft’s wings make with the ground and is important
for flying in reduced visibility. Radio, which developed around the same time as
aviation, made it possible for pilots to communicate with each other and with
people on the ground (airport). By the 1930s radio signals from fixed locations
were guiding pilots to their destinations in darkness and poor visibility. Airports
adopted the necessary infrastructure for night flying. Engineers also made
numerous advances in aircraft design during the 1930s. Air-cooled engines helped
reduce weight and made larger and faster aircraft possible. Cockpit instruments

4. also improved, with better indicators for airspeed and rate of climb and better
altimeters and compasses.
Multiengine airplanes, introduced were heavier and needed longer paved runways
to take off and land. As a new round of airport construction began, airport builders
favoured sites away from central downtown districts, such as outlying farm areas
or unpopulated marshlands. These marginal sites were inexpensive, provided
enough space for expansion, and were also clear of obstructions such as tall
buildings. These second-generation commercial airports of the 1930s were
designed to serve airplanes that usually carried up to 75 passengers. Because
airplane capacity was still relatively small, all terminal functions were handled on a
single floor. Terminal buildings were usually of the gate terminal design, with
airplanes on one side of the building and automobile parking on the other.
As the war drew to a close, scientists working independently in Britain and
Germany perfected the jet engine. With the introduction of jet airplanes into
commercial service in 1959, facilities at many existing airports became outdated or
obsolete. To correct this, another round of construction and expansion began. To
allow long-range operations by the heavier and faster jet aircraft, runways now
needed to be extended in length. Terminals designed for the passenger volumes
of earlier, smaller aircraft were no longer adequate for the new jet airplanes.
New concepts in terminal design that were implemented in the 1960s featured
much larger architecture than that of earlier terminals. Many new terminals were
built by specific airlines to serve their own customers.
Making air transportation considerably faster and more comfortable for passengers
and reducing airline maintenance costs through improved engine reliability. Jumbo
jets 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 to
fly faster than the speed of sound, the Concorde, radically reducing transatlantic
travel times.

5. Airline deregulation was intended to foster competition in the air transport market
and bring better service and lower prices to air travellers and shippers. Numerous
academic and government studies have concluded that deregulation has been
successful. In the years following the deregulation, domestic air-transport industry,
airlines began converting their operations to hub-and-spoke systems. In this
system, an airline’s passengers are collected by flights from many spoke cities and
are flown to a hub airport, which is normally located at a centralized point in the
airline’s route system. Passengers arrive at the hub in a wave of flights arriving at
approximately the same time. During the time the airplanes are on the ground at
the hub, passengers transfer to other airplanes that are going to their ultimate
destination. Then all flights in the wave depart to the spoke cities and the whole
process begins again. This pattern is repeated throughout the day to provide
service at convenient frequencies During the 1980s the major airlines established
“hub-and-spoke” route networks. These hub-and-spoke networks improved the
service and competition to most areas of the country. Airline prices have also
declined, when adjusted for inflation, and the new competitive climate has fostered
numerous innovations of benefit to travellers, including frequent-flyer programs
and computer reservation systems that make it easier for travel agents to shop for
and book air travel for customers.
As soon as the international service has been started it has become necessary for
airports to develop infrastructure in accordance with large body aircrafts such as
essential runway length, fuel arrangements, taxiways, and maintain safety and
security of the state.
Unlike domestic air service, international service remains highly regulated. Service
levels between most countries is governed by bilateral aviation agreements that
typically specify which cities may be served, the frequency of the service, and
sometimes even the total number of seats that can be offered for sale. Pricing
restrictions also are sometimes included in these government-to-government
agreements, as well as restrictions on what carriers can do on the ground—for
instance, whether they can set up a trucking subsidiary to move freight to off-
airport locations. International air service is growing less restrictive, but very
gradually. Passengers entering any country need to have a visa, formal

6. endorsement placed by government authorities on a passport, indicating that the
passport has been examined and found valid by the nation to be visited, and that
the bearer may legally go to his or her destination.
Commercial aviation has become significantly safer since the early decades of the
industry. This is due in large part to better, more reliable aircraft and engines, as
well as better navigation and landing aids on the ground. Most accidents today are
due to human error or hijacking or it is also called as skyjacking or air piracy, is
defined as the forcible commandeering of an aircraft while in flight. Air hijacking is
an offence punishable by long prison terms or execution. During the 1960s the
incidence of airplane hijackings has became a serious problem. Planes were
hijacked by exiles, by the mentally ill, by criminals fleeing the countries, and by
those bent upon extorting large sums of money. Beginning in 1968, political
terrorists in Europe and the Middle East began to hijack passenger aircraft both for
the purposes of publicity and to obtain concessions from governments or the
release of imprisoned terrorists.
This circumstances has lead the governments to have a check in the airports
which began searching passengers and checking carry-on baggage by means of X
rays and metal-detector devices at major airports. These precautions played a
critical role in reducing the number of hijackings. Unsuccessful hijackings also
served as deterrents to hijackers. One famous example was the June 1976
hijacking by Palestinian and West German terrorists of an Air France plane to an
airport in Entebbe, Uganda. A daring raid by Israeli commandos resulted in the
deaths of the hijackers and the rescue of more than 100 hostages; three hostages,
however, died in the raid. After that incident, additional security precautions, such
as questioning passengers at the time of check-in, became common. Designated
high-risk national carriers, such as El Al of Israel, adopted measures such as
passenger profiling. In this technique, specially trained security personnel
thoroughly question some passengers to identify patterns of activity or behaviour
characteristic of terrorists and hijackers.
At the beginning of the 21st century, at a time when a terrorist hijacking of
passenger aircraft perhaps was regarded as having become less of a threat, the

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 four
commercial passenger jets to carry out a devastating terrorist attack on the United
States. The jets were deliberately crashed into the twin towers of the World Trade
Centre in New York City and into the Pentagon, in Arlington, Virginia, killing
approximately 3,000 people. Evidence indicated that the hijackers had wielded
knives and box-cutters to hold the crew and passengers at bay while others who
had basic pilot training flew the planes into their targets. The September 11 attacks
rapidly changed aviation security procedures. Formerly, airline policy directed that
passengers and crew should stay calm and cooperate completely with hijackers as
the most likely means of ensuring their safety and survival. With the new possibility
that aircraft would be used as weapons in suicide attacks, however, advisories
were issued encouraging passengers and flight crew to forcibly resist any hijacking
attempt. Pilots were required to remain behind locked, fortified cockpit doors to
prevent anyone from gaining entry and seizing the controls. Additional security
measures were instituted in the airport, including more stringent identification
checks 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 throughout
the world. Three international nongovernmental organizations—the International
Civil Aviation Organization, the International Air Transport Association, and the
Airports Association Council International—have been established to develop
common aviation security polices and guide their implementation.
The threat of terrorism aboard aircraft has motivated airports to increase security
and control over who and what gets onboard airplanes. Passengers must walk
through metal detectors in many airports. Some airports and airlines use X-ray
technology, drug-sniffing dogs, and other security measures to examine baggage
before it is loaded on an airplane.
Epidemic is other major issue, where X-ray technology and sniffing dogs found
helpless. Global spread of SARS and the recent SWINE flue is example of
epidemic. The global spreading of probable SARS cases on May 30, 2003, as

8. reported by the WHO and Centres for Disease Control and Prevention. The first
cases 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 began
spreading around the world along international air travel routes, because tourists
and the medical doctors who treated the early cases travelled internationally. As
the disease moved out of southern China, the first hot zones of SARS were Hong
Kong, Singapore, Hanoi (Vietnam), and Toronto (Canada), but soon cases in
Taiwan, Thailand, the U.S., Europe, and elsewhere were reported. As airports are
the gate ways for any country, it is always easy and better to stop any sort of threat
for the state and its citizens. The modern airports have sophisticated health
checkups for all the international passengers; it has become a necessary for all the
international passengers to be thoroughly checked at the airports, and for the
doctors in the airport it is very important to know and be aware about the epidemic
flu around the world.
The air transport industry has grown enormously in the second half of the 20th
century. The number of passengers worldwide grew from 177 million in 1965 to an
estimated 3.3 billion in 2000.The modern airports around the world have been
constructed with all the basic and luxury amenities to the passenger.
As we have seen the progressive change in airport industry which in the past was
considered to be a simple transit areas but now the modern airports have become
place where one works, eats, makes purchases, and even sleeps. With the
increase in traffic, airports represent very large market potential. In fact airports
have proved their commercial success through London Heathrow, Seoul Inch-eon
with there hundreds of shops. Some of the best airports of today world are as
follows.
It is up to building industry to suggest new commercial perspectives to airports and
potential risk of revenue loss if action is not taken. This is why increasingly the
architectural design of airports is entrusted to internationally renowned designers
such as Renzo piano and Paul Andreu who were asked to design the undulating
structure of the Kansai airport in Osaka, Japan, the Kansai International Airport in
Osaka, Japan, was built on an artificial island located in Osaka Bay. The island is

9. connected to the mainland by a bridge and is served by several ferries. The airport
opened for business in 1994. Its location away from populated areas eliminated
noise-pollution problems, allowing Kansai to become the first Japanese airport that
is 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 is
planned for the future. The British designer, Sir Norman Foster, imagined the light
filed space for the recent airport Chep Lap Kok in Hong-Kong, the Hong Kong
Chek 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 million
passengers and 3 million tons of air cargo shipped annually. A second runway is
under construction. The airport was built on an island that was excavated 27 m (90
ft) down to reach solid bedrock and then refilled with topsoil. The terminal, which is
over 1 km (0.6 mi) long, includes 75 gates. The total cost of the airport was $20
billion, Japanese designer Kisho Kurokawa designed the airport of Kuala Lumpur
in Malaysia and Denver International Airport is the newest major commercial
airport in the United States., it opened in 1995. The airport covers an area of 137
sq km (53 sq mi). It has five runways, each 3,700 m (12,000 ft) long. The runways
are at least 1,300 m (4,300 ft) apart, permitting two or three streams of aircraft to
land simultaneously. The control tower is 33 stories tall. The terminal and
concourses 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 with
increasingly 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 the
international airport a gaint aquarium was built to relax passengers; in addition
works of art are also displayed. In Singapore, passengers can sunbathe in a
cactus garden next to a swimming pool. Other possibilities can be imagined such
as the setting up training courses for the airport staff in different languages so as to
assist passengers.

10. INTER DEPENDENCE OF AIRLINE-AIRPORT-AIRSPACE SECTOR IN THE
GLOBAL AVIATION MARKET DEVELOPMENT.
AIRPORT AIRLINE
PASSENGER
Existence of universe is based on the principle of dependence in the same way
every thing is dependent on other. When it comes to the question of airlines
depending on airport or airport depending on airlines, the answer is quite
debatable, finally one can say it as a phenomenon of interdependence and airports
always had to adapt the needs of airplanes.
The fast and steady growth of the trade and tourism between the nations has
chosen the air transport mode for its Quick, Reliable, Efficient and Safe services.
The recent trends in the development of free trade, globalisation, liberalisation and
deregulation left the mankind to race with time and they found air transport very
appropriate, thus propelled the aviation industry to paramount. It has been
assessed that every job in the aviation industry will create seven other jobs directly
or indirectly through its catalytic impact on tourism and business hence 2% growth
in aviation industry leads to 1% growth in GDP. Alluring situation with enhanced air
traffic population, created a wider space for mushrooming of new airlines. But for
such 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 aircraft
costs lot to operate, but can take many passengers, which lead to the recent
developments in the airline manufacturing technology such as huge body aircrafts
and just beginning curiosity of space travel has prepared the airports to upgrade

11. there existing facilities or move over to green field airports. All markets are
complex, but aerospace has peculiar intricacies involving the interplay among the
aircraft manufactures, aircraft owners, aircraft users, regulatory authorities, airport
operators, municipalities, conservationists and other visited interests and stake
holders. An excellent recent example is the airbus A380. Although design of the
A380 was conventional in most respects, the exceptionally large size of the aircraft
raised multiple new issues with people and organisations involved, directly or
indirectly, with its introduction. Compared to the largest operational airliner of the
time, the A380 weighed 30percent more, had a wing span 16 meter wider, was 6
meters higher, and carried at least 150 more passengers. The positive appeal of
the aircraft was, of course, that it could carry larger quantities of passengers on
high density routes, at costs that were projected to be lower than those for smaller
contemporary aircrafts. However at the time of launch was announced, virtually no
airport in the world could adequately accommodate the aircraft. Runways were too
narrow, or were too small; passenger’s gates were inadequate; hangers were too
small; passengers jet ways could not reach doors on the upper deck; and customs
and baggage-handling facilities were inadequate to handle the surge of
passengers. In additional airworthiness authorities feared lingering turbulence
created by enamours aircraft would create flying conditions unsafe for smaller
aircrafts, so exceptional mandatory runway shutdowns were imposed for several
minutes after each A380 take off and landing. And by 2005, 14 international
airports worldwide had committed to make infrastructure investments, estimated at
$ 100 million per airport, to accommodate the new aircraft. Constructing a new
airport is always a expensive proposition hence It’s nearly always easier to modify
an existing airport than to create new one, however, with the time, city grows
towards the airport and the space becomes inadequate for airport extension and
handling of increasing passenger traffic. Green field airports to be of international
standards demands huge investment, this created opportunity for many private
industries to partner with government. The new business model public private
consortium is a success in revenue generation not only from air side but from
terminal and land side as well.
Development in information technology has come as a support for the aviation
industry in many ways viz. Airline Resource Management System (ARMS),

12. Centralised Reservation System (CRS), Radio Frequency Identification (RFID),
Baggage Tracking System, Ground Handling and Automatic Check in Scanners
etc. Technology reduced the interaction time between passenger and airline staff,
airport management. More than one passenger can be handled in the same time
where it used to be one before, baggage shipping and discharge time has reduced
to greater extent, resulting in faster turnaround time for airlines. Reduced parking
and turnaround time keeps the airplanes in air for extra time, resulted in increased
revenues. Similarily airports enhancing there revenues by accommodating more
number of aircrafts.
With reduced parking, turnaround time and increasing passenger traffic more
number of airlines are emerging and existing airlines extending their fleet size, so
many airplanes in air shoots new problem air traffic and the situation is very
alarming. Now air traffic control is a biggest challenge for every country.
Communication Navigation Surveillance / Air Traffic Management with the
sophisticated and the latest instruments with new Aeronautical
Telecommunication Network (ATN) when introduced will allow full inter operability
between different air and ground sub systems. The satellite based navigation will
give a global accuracy in order of at least 100 meter of actual position. This will
allow it to be used en-route, terminal and for non precession approach phases of
flight, with suitable ground augmentation, it will achieve accuracy which will permit
precision approaches to be conducted at any airfield, heliport or landing strip.
There are certain things which we cannot avoid but we develop new technology to
sustain significant weather such as thunderstorm, gale, cyclonic storm and such
sever weather conditions are reported as 'SIGMET'. Airport Met offices issue
routine hourly met reports (METAR) and Special weather reports (SPECI) are
issued when weather conditions deteriorate, such as fog, poor visibility etc based
on the minimum visibility and cloud criteria, flight conditions are reported as Visual
Flight Rules (VFR) and Instrument Flight Rules (IFR).

13. RESEARCH IN AIR TRANSPORT ECONOMICS TO IDENTIFY KEY DRIVERS
AFFECTING TRAFFIC VOLUME AND THE CLOSE RELATIONSHIP BETWEEN
AIR TRANSPORT GROWTH AND THE GDP.
The impact of air transportation on economic activity differs from other
transportation modes because of its distinctive characteristics speed, cost,
flexibility, reliability, and safety. It is the only realistic long-distance Transportation
mode for high-value perishable commodities and time-sensitive.
Air transportation provides employment in the aviation sector and creates wider
socioeconomic benefits through its potential to facilitate certain types of activities in
a local economy. The availability of air transportation services effectively increases
the scope of new business and industrial economic activity. The increasing
economic activity in turn generates the need for passenger travel and freight and
drives the demand for air transportation services. Studies evaluate the direct,
indirect and induced employment impact of air transportation. Direct impact is
employment in the aviation industry, indirect impact is the employment in the
industries down the aviation supply chain, and induced impact is the employment
supported by the expenses of those directly and indirectly employed in the aviation
industry, studies has been assessed that every job in the aviation industry will
create seven other jobs directly or indirectly through its catalytic impact on tourism
and business. At the macroeconomic level, air transportation impacts economy by
providing employment and by enabling effects including enabling access: to
markets, to people, to capital, to ideas and knowledge, to labor supply, to skills, to
opportunity, and to resources. The economy in turn provides capital and generates
demand for passenger and freight travel.
Aerospace trade shows are excited working environments. The large international
shows generally involves huge money, major international air shows generally
biennial, have first-class permanent exhibit facilities, accommodations and logistics
support for large number of flying aircrafts, off-runway space for static display, well
equipped conference facilities, on site luxury hospital facilities and extensive
communication support for media and trade representatives, it requires a million
dollar budget to participate fully at an international air show, with a flying demo , a

14. hospitality chalet, a major exhibit, and a team of professionals this brings a huge
revenue to the host country.
Airports are among the busiest transportation centres. The business they create is
vital to the world economy and individual national economies. In the United States,
over 500 airports provide airline passenger service to about 600 million people
annually. These airports also handle about 15 million metric tons of air cargo each
year. Canada’s 26 airports in its National Airport System provide service to about
60 million passengers annually. The total annual economic impact of U.S. airports
is estimated at over $500 billion. This value includes the price of airfares
purchased by passengers, the salaries of airline and airport employees, taxes, and
indirect earnings from related businesses and industries. Airports are so important
economically that many companies will locate factories and offices in cities which
have 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 and
entry of private sector airlines, have exerted a positive impact on the aviation
industry.
Air traffic in term of passenger and cargo movement has increased impressively
from 2003-04 to 2007-08. The passenger traffic has increased by a compound
annual growth rate (CAGR) of 19.14% and cargo by 9.91% which are
116.87million passengers and 1.71 million tonnes respectively.
The air transport industry supports a wide range of businesses. These include
independent maintenance and repair shops, food caterers, aircraft cleaning
services, fuelling services, and airport security firms. The industry supports schools
for pilots, flight attendants, and mechanics, as well as travel agencies, hotels, car
rental companies, and other businesses in the travel and tourism industry. The
promising growth of civil aviation market has attracted so many private players to
participate in scheduled & non-scheduled air services. With so many new players
in 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. growth rate of 8.6%. To recover the deficit and with stand the traffic demand many
air 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 years
It can be seen from the above statistics that India’s scheduled airlines have booked
the order of 25 billion from different manufacturer’s viz. Boeing, Airbus, ATR, and
Embraer. In large scale international aerospace sales, the customer may insist that

16. aircraft seller provide the buyer’s country with certain kinds of industrial benefits as
a condition of scale. Commitments to provide these compensatory industrial
benefits, known as offsets, government plays a major in obtaining the benefits from
the exporter, as large amount of money are involved in major international sales of
aircraft and the value of offsets is proportionately high. But the third applicable
agreement 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 civil
aircraft as prohibition offsets. Although sales of commercial airlines are not
normally tied to formal offset requirements, the aircraft manufactures often strive to
place industrial work in the country of the purchaser, in order to strengthen
relations with the local government. This is especially true in countries like India
and china where the national government exercises significant influence over
aircraft selection.
Hence it is mistakenly believed that the product is that export country is selling to
an independent government, where as in reality they are selling a package of
benefits that includes aircrafts, jobs, technology transfer, profits for industry, and so
on. The total number of air passengers in India during 2007-08 was 116.87
million including 29.81 million international passengers. Crossing the level of 100
million has made India 9th largest aviation market in the world; even then also air
travel 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, the
average no of people required to work on each aircraft is 100 hence forth
requirement of 4000 manpower for maintenance, beside of it, new airports has to
be built to accommodate the airlines, maintenance repair and overhaul is a huge
revenue generating segment, air traffic control, airport security are the other
issues. The growth in the aviation industry will broaden business scope for travel
agencies, hotels, car rental companies, and other businesses in the travel and
tourism industry. It has been assessed that every job in the aviation industry will
create seven other jobs directly or indirectly through its catalytic impact on tourism
and business hence 2% growth in aviation industry leads to 1% growth in GDP.
Foreign Trade: Despite odds (raw material prices, high borrowing rates, losses due
to forward contracts) the country did export goods worth USD 60 billion, posting
24.6% growth during the first four months of 2008-09 as compared to 18.22% in
the previous year. The reason ascribed to high exports growth was increased

17. demand in some of the international markets. The weakening of Rupee has helped
the exporters to recover their (those who have not hedged their funds) losses
made in the past. However, those who opted for a forward cover during the days
when Rupee was maintaining Rs 38-40, failed to insulate themselves from the
quick and sharp weakening of Rupee. The import bill swells due to obvious
reasons and widens the trade deficit even further. The huge potential of Indian
exports cannot be achieved without the support of aviation sector. In order to have
a better imports and exports, country should have established aviation industry.
Hence this relation becomes proportional. The growth in aviation industry is directly
related 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 32.88
Middle East)
Bangladesh 182.5 239 30.96 14.8 27 81.75
Korea 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. Philippines 28.3 57.3 102.42 17.3 11.3 -35.07
Singapore 658.5 854.3 29.73 706.9 916.6 29.67
Sri Lanka 259 304.9 17.74 24.1 35.1 45.38
Taiwan (Taipei) 112.7 102.2 -9.34 149.8 192.3 28.38
Thailand 80 194.2 142.72 169.5 201.6 18.95
Viet Nam 83.4 198.6 137.97 9.9 30.4 208.38
Middle East 1844.9 2786 51.01 4328.7 6862.6 58.54
Iran 132.6 120.7 -8.96 762.8 1015.4 33.12
Iraq 9.2 42.1 358.13 381.4 875.9 129.64
Israel 98.6 130.6 32.49 120.7 67.6 -43.96
Kuwait 57.9 85.7 48.15 501.3 704.1 40.45
Saudi Arabia 154.5 431.1 179.02 941.8 1564.9 66.16
UAE 1080.7 1721.9 59.33 1099.1 1659.9 51.02
Europe 2476.3 4105.9 65.8 4225.4 5799.9 37.26
Belgium 312 399.4 28.02 404.2 152.5 -62.27
Denmark 32.3 45.1 39.61 34.5 39.8 15.56
France 193.5 291.6 50.67 152.7 263.6 72.66
Germany 313 548.7 75.32 699.2 907.6 29.8
Italy 266.2 381.5 43.31 235.1 535.5 127.8
Netherlands 234.9 553.9 135.82 145.3 169 16.31
Russia 61.7 94 52.34 138.6 258.8 86.65
Spain 142.1 407.9 186.98 51.8 73.7 42.31
Sweden 32.5 49.1 50.96 190.8 191.7 0.48
Switzerland 62.8 55.2 -12.02 1334.3 1965.2 47.28
Turkey 121.4 150.3 23.84 80.5 266.1 230.57
UK 445.1 589.6 32.46 366.5 341.7 -6.77
Oceania 70.6 109 54.31 689.8 964.9 39.89
Australia 59.2 86.9 46.79 655 920 40.46
China 660.3 1057.3 60.11 1766.9 2575.9 45.79
Hong Kong 417.6 500.8 19.92 332 116.7 -64.85

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21. Future Prospect
In the years to come, the Indian aviation industry is poised to grow and would
position itself among the top aviation markets globally. This is very clear from the
fact that the country is geographically spread with huge population. Besides, it is
exports and imports helping India becoming an economic power.” In 2004, the
sector started slowly with probably 100 plus aircraft. It was very small then, for a
country like India. Though we have not grown big, over the years, the size of the
aircrafts which the airline companies have is a clear testimony to the fact that the
aviation industry is here to stay”. As aviation industry and economy are inter
dependent, with the growth in aviation industry economy grows as well.

22. STRATEGIC OPTIONS AND MANAGEMENT TECHNIQUES TO MAXIMISE
AIRPORT REVENUE.
Airports are owned and operated by many different agencies. Most small airports
can be privately owned. Large commercial airports are usually owned by city
governments, regional port or airport authorities, or state. Most airports are
operated by the agencies that own them, but some are operated by private
organizations that have a contract to operate them or that lease them from their
owners. Some private companies have purchased entire airports from their owners
and 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 ever
source of business derived from a broader concept of ‘flight experience’, whether it
be strictly related to aircraft services, or to more diversified value objectives. The
co-branding and co-marketing partnerships between airports and airline operators
or other value chain players, like tour operator and travel agencies, and
announcement of economic schemes for carriers. In order achieve correct market
positioning an airport enterprise will need to conduct an exploratory market
research study, aimed at understanding both the quantity and quality of current
traffic values and the potential purchase intentions of its catchments area. Each
geo-commercial area will show different trends due to stronger business- industrial
or leisure tourist element the basic fundamental principle of marketing is sell what
customer wants in order to generate a consistent value system.
Airports receive revenue from a number of sources. Airports charge landing fees to
the airlines for each airplane that lands and takes off from the airport. Airlines, food
service companies, and retail establishments rent portions of the terminal. An
airport also makes money from fees charged at parking lots. Airports can also
charge a fee on each ticket sold to pay for improvements. Expenses involved in
operating an airport include terminal and runway maintenance; utilities such as
water, electricity, and heat; airport administration and salaries; and fire and
security services.

23. The Air port revenues mainly divided into aviation related and non aviation related
and they are ‘Land Side and Air Side’, Terminal Side respectively.
Airside: Airside is used for the landing and takeoff of aircraft Runways are the
long, narrow areas where airplanes take off and land. Taxiways are paths that
aircraft follow from the runways to the terminal building, Maintenance and
refuelling 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 in
air 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 boarding
the aircraft not only spending by shopping in various arcades of the complex but
also relaxing close to interesting activity such as with a long row of bass and pubs
and possible to have drinks while listening to there favourite music, children’s may
play their favourite videogame in dedicated zone while film lovers will have movie
theatres and sports fans have sports arena There can also be a fitness centre with
sauna & Jacuzzi, for aviation enthusiasts there is a garden terrace with chairs
tables, umbrellas and an excellent view of the runway and there are no limits for
shooting picture When transit passengers have to wait for long hours for next flight
to 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-up
visiting friends and relatives, travellers or job-related contacts. Access from land
side to air side areas is tightly controlled at most airports the parking area bus
stops and train stops come under the land side. Presence at industry fairs, or
events concerning the whole tourism industry, like world travel market in London
this will be a good airport enterprise focus on both aviation and non aviation
related value proposition.

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. Conclusion: This paper discusses air transportation and economic activities
interdependence. Air transportation provides employment and stimulates certain
economic activities. The economy, in turn, drives the demand for air transportation
services. The objective of this work is to analyse and understand interdependence
of air transportation and economic activity. More specifically, this work is aimed at
(1) developing a feedback model to describe the relationship between air
transportation and economic activity and (2) identifying the factors which stimulate
or suppress air transportation development. Exploratory Research Method which
combines literature review, aggregate data and case study analysis is used as a
tool in this work for the analysis and understanding. The case study analysis at the
individual segment of value chain is performed to understand the air transportation
impact in each individual level of value chain. These findings help to develop a
feedback model which describes the relationship between air transportation and
economic activity. Specifically, the analysis is used to describe (1) how air
transportation 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 and
business conditions. The paper is extended to perform quantitative analysis of the
evolution enabling impact of air transportation in a particular (Indian) economy.
The following factors can stimulate or suppress the economic activities and are
identified both from the air transportation supply and demand sides. The supply
side change factors are identified as: changes in the regulatory framework,
infrastructure capability, airport capability and airline strategy. The air
transportation demand is found to be directly affected by exogenous demand
shocks, economic downturns, political and economic sanctions, and the
development of other transportation modes. The analysis also identifies the
following change factors which affect the demand indirectly by changing the
country’s economic attributes: economic liberalization, institutional and political
reforms, supporting infrastructure investment, exchange rate fluctuations, political
and macroeconomic stability, growing consumer demand, and changes in
management practices. This analysis of stimulating and suppressing factors helps

26. to describe the role of government intervention in changing air transportation
system development and its impact on economic activity. The results of this work
can guide further development efforts, investment and policy decisions pertaining
to 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 Library
Www.Aerosite.Net
International Civil Airports Association.
ICAO (2006) Safety Management Manual.
Aerospace Marketing Management: Philippe Malaval & Christophe Benaroya
Marketing in the International Aerospace Industry: Wesley E. Spreen
Strategic Management In the Aviation Industry: Werner Delfmann, Herbert Baum,
Stefan Auerbach & Sascha Albers
Studies in Aerospace Law Dr. Nagendra Singh & S.Bhatt
Aircraft Finance Berend J.H. Crans
www.icao.com
www.iata.com
monthly economic analysis
--------------------------------------------------------------------------------------------------------------
SIREESH P.
FLYING INSTRUCTOR (UAV’S)
AIRCRAFT RESEARCH AND DESIGN CENTER,
HINDUSTAN AERONAUTICS LIMITED
Email id: seereesh@gmail.com, Mobile no: +91- 9740287428.