Civil Aviation Industry
- 3. 1953: Nationalization of Aircraft Industry 9 existing companies transferred to two entities controlled by Govt. (a) Indian Airlines- domestic sectors (b) Air India- international sectors 1986: Private Sector Players permitted as Air taxi operators Jet, Air Sahara, NEPC, East West, Modiluft ,etc started 1994: Private Carriers permitted to operate scheduled services 6 operators granted license , only Jet and Air Sahara able to service 2003: Entry of low cost carriers Air Deccan, Spice Jet, Go Air, Indigo
- 4. Reasons: Soaring prices of aviation fuel Mounting salary bills Disproportionately large fleets Financial health of companies declined despite liberal Govt patronage(1949)
- 5. Set up Air Traffic Enquiry Committee in 1950 . Nationalization of Indian Airlines (IA) 1953 resulted in Govt. control. Meant to remove operational limitations arising out of excess competition. Air transportation in India now comes under the direct control of the Department of Civil Aviation.
- 6. Effects Increasing liberalization and deregulation . Increase in the number of players. Enactment of the open sky policy between India and SAARC countries. Increase in bilateral entitlements with the EU and US. Aggressive promotion of India as an attractive tourism spot. Increasing per capita income led to an increase in disposable incomes. Leading to greater spend on leisure and holidays and business travel has risen sharply with increasing MNC presence. Smaller cities are also well connected now.
- 7. Airport Authority of India April 1,1995 by combining International Airport Authority of India and National Airport Authority of India. Infrastructure for civil air traffic. Transport at the international and the domestic airports. It manages 94 civil airports including 11 international airports at Delhi, Mumbai, Kolkata, Chennai, Thiruvananthapuram, Bangalore, Hyderabad, Ahmedabad, Goa, Amritsar and Guwahati . 28 civil enclaves at defence airfields.
- 8. MISSION To maintain a competitive civil aviation environment, which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country.
- 9. The objectives of this policy are the creation and continued facilitation of a competitive and service-oriented civil aviation environment . The interests of the users of civil aviation are the guiding force behind all decisions, systems and arrangements. Safe, efficient, reliable and widespread quality air transport services are provided at reasonable prices.
- 10. Long-term leasing of airports at Delhi, Mumbai, Chennai and Kolkata to make them world class . This would help in attracting investment to improve infrastructure facilities and services at these airports. AAI has planned a investment of US$ 3.07 billion—43 per cent of which will be for the three metro airports in Kolkata, Chennai and Trivandrum, and the rest for upgrading other non-metro airports.
- 11. 100% FDI is permissible for Greenfield airports. For existing airports, FDI up to 74 % is permitted through automatic approvals and up to 100% through special permission (from FIPB). Private developers allowed setting up of captive airstrips and general airports 150 km away from an existing airport. 100% tax exemption for airport projects for a period of 10 years.
- 12. 49 % FDI is permissible in domestic airlines , but not by foreign airline companies. 100% equity ownership by Non-Resident Indians (NRIs) is permitted but not by PIO. ( People of Indian Origins) 74% FDI is permissible in cargo and non-scheduled airlines. The Indian government has set up an Airport Economic Regulatory Authority (AERA) to provide a level playing field to all players.
- 13. Domestic air transport policy debars foreign airlines from equity participation in companies formed for domestic air transportation. Participation of foreign individuals/companies up to 49 % . Participation of non-resident Indians (NRIs) / overseas corporate bodies (OCB) up to 100 % in domestic air transport services. Foreign equity limit in the international services is 26 %.
- 14. Regulatory functions : responsibility of Directorate General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS). Operational functions - performed by Air India Ltd., Indian Airlines Ltd., Pawan Hans Helicopters Ltd. together with other private sector airline operators.
- 16. Price
- 36. The Centre for Asia Pacific Aviation (CAPA) has forecast that domestic traffic will increase by 25 % to 30 % till 2010 and international traffic growth by 15 %, taking total market to 100 million passengers by 2010. Govt. plans to invest US$ 9 billion to modernize existing airports by 2010. Govt. is planning to develop around 300 unused airstrips.
- 37. Vision 2020 by the Ministry of Civil Aviation plans to create infrastructure to handle 280 million passengers by 2020 . By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and 3.4 million tonnes of cargo per annum. Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80 billion in new aircraft and US$ 30 billion in development of airport infrastructure. Associated areas such as maintenance, repair and overhaul (MRO) and training offer high investment potential. A report by Ernst & Young says the MRO can absorb up to US$ 120 billion worth of investments by 2020.
- 38. Thank you