CREATED BY KUMARI PRIYANKA

AVIATION INDUSTRY BUSINESS IN

INDIA

GREAT OPPORTUNITIES
AND
GREAT CHALLENGES
 INTRODUCTION
 Overview of Indian Aviation
 Business Aviation In India
 What's driving the Growth?
 What’s holding us back?
 Challenges facing operators
 Are we moving forward?
 Questions
 OVERVIEW
 Explosive Growth in Indian Aviation in 2005-
06: Passenger traffic by 24%, aircraft
movement by 17% and freight traffic by 10%
 Growth driven by economic growth, rising
incomes, growth of tourism, increasing
competition, emergence of low cost airlines,
liberal government policies etc.
 Increasing competition and emergence of
private players means greater choice, higher
quality of service and lower prices.
 OVERVIEW (CONTD)
 Airport Segment just beginning to see private sector
participation
 Delhi and Mumbai are being managed and restructured
by private companies in technical collaboration with
international partners.
 As of now, airport infrastructure is woefully inadequate.
 Immediate need for existing airports to expand and
upgrade
 India has a total of 455 airports and airstrips; only 135
of them are operational. Need to revive/develop the
rest.
 As per current estimates, India needs USD 25 billion
over the next 5 years to develop airports
 OVERVIEW (CONTD)
 Low Cost Airlines are playing an important role.
A whole new socio-economic group has
entered the market of airline travel.
 Currently India attracts only 0.4% of global
tourism and 1% of total spending in tourism.
Tourism accounts for only 4.8% of GDP in India
as against 10.2% of GDP world wide
 Next few years will see some consolidation and
shakedown in the Airline industry.
 BUSINESS AVIATION IN INDIA
The most neglected sector of Indian
aviation industry
There are no separate guidelines for GA
aircraft in India
Till 2005, there were only 50 business
aircraft to cater for a population of 1 billion
people as against USA
There is no concept of FBOs, heliports or
GA terminals in the country.
REASONS FOR POOR GROWTH OF GA
SO FAR

 Lack of infrastructure
 Unfriendly government regulations.
Long and tedious procedures for
purchase/import of aircraft
 Strict banking regulations; tight
control of RBI
 Conservative mindset of the older
generation of business leaders. This
is changing with the present set of
younger entrepreneurs.
 Lack of understanding on the value
of corporate aviation as business tool
 Strict security norms
EXPLOSIVE GROWTH AHEAD
 GA is likely to grow by 30% to 40 % as against
the overall growth of 25%
 2006 saw the fleet double.
 One business jet to be added every third day for
next 2 years. Fleet to triple in 2 years.
 Present applications for import of 300 GA aircraft
pending with the Govt. 100 cleared last year.
 All major business houses and High Net worth
Individuals (HNI’s) are joining the queue to
become aircraft owners.
 Key change is that many medium (and some
small) companies are also buying A/C
WHAT’S DRIVING THE GROWTH
• Some De-regulation of Govt control.
• Easier finance available for aircraft purchase
• Change of mindset of new generation business leaders –
“tool vs. toy”
• Change in regulations for foreign investment in Indian
companies
• Robust and booming economy (9%). Availability of extra
purchasing power.
• Global ambition of Indian companies. Need creating demand
WHAT’S HOLDING US BACK

Lack of Infrastructure. Airports lack parking space, skies are

overcrowded,
air traffic control needs major improvement in terms of training and
technology.
Regional connectivity is poor and regional hubs need to be created.
Most of the smaller airports lack basic facilities like VOR/ILS
approaches and are at best fit only for VFR flights.
There are inadequate international airports and no FBOs or
heliports in the country
WHAT’S HOLDING US BACK
(CONTINUED)
 Shortage of manpower: There is tremendous
shortage of pilots, engineers, operational personnel
and ground staff in the aviation industry.
 This is unlikely to go away for the next 5 years. India

needs 5000 pilots, 25000 engineers and about 100,000

aviation specialists from all fields of aviation over the
next 5-7 years
 Present capacity is far below the demand – e.g. all the

flight schools combined produce 150 CPL’s per year

 GA suffers more than commercial aviation.
WHAT’S HOLDING US BACK
(CONTINUED)
 Government Regulations; Though the
govt is making changes in the regulations, it
needs to move at a much faster pace on this.
 Aviation in India is over regulated and needs
to free itself from govt shackles.
 Acquisition committee, DGCA, BCAS, IB etc.
CHALLENGES FACING
OPERATORS
 Complex and Difficult regulatory
environment
 Step-child Treatment – Commercial
aviation takes 1st priority
 Pressure from management/ clients

 Lack of Standards and procedures

 Severe shortage of manpower - Difficult to

retain key personnel
 Until now – no common voice – BAAI hopes
to change this
ARE WE MOVING FORWARD
Explosive Growth expected
No. of Aircraft will increase rapidly
Will the environment change fast enough to sustain
this?
Govt needs to play its part in policy making
and infrastructure development
Private participation in creating the right
environment and taking a lead in training
the manpower.
Nascent stage; could very go wrong if
growth is not planned or nurtured