Thursday, December 13, 2012


Boom In Aviation Industry

The recent study says the boom in the aviation sector is back again after a big slow down , According to a recent study by Associated Chambers of Commerce and Industry (Assocham), the boom in the aviation sector is likely to generate nearly 2.5 lakh jobs by the year 2010. The civil aviation industry now has become 35000 crore industry and also these jobs will rise because of modernization of international airports at Mumbai and delhi and revamping of non metro airports . The growth in this aviation sector has come again suddenly and india will requiring 7500-8000 pilots and equal number of cabin crews by end of 2010 . The industry currently wants to get trained pilots to sustain this growth and also many other jobs will open up like airport managers and ground handling personnel which will lead to more than 200000 jobs by 2017 . Also number of women pilots are going high, first in a class of 100 there were hardly 2 or 3 now the number is gone 10-12. In India there are now around 76 women pilots. Air deccan has around 40 women pilots and kingfisher has 26 women pilots from its 390 pilots.
Also the other reasons for the boom in aviation industry is foreign equity upto 49% and NRI investment up to 100% is allowed in domestic airlines without any permission from government . But government bars stake of foreign airline in domestic airline industry.. Also there are low entry barriers like venture capital of $10 million or less is enough to launch an airline. Private airlines are known to hire foreign pilots, get expatriates or retired personnel from the Air Force or PSU airlines in senior management positions. Further, they outsource such functions as ground handling, check-in, reservation, aircraft maintenance, catering, training, revenue accounting, IT infrastructure, loyalty and programme management. Airlines are known to take on contract employees such as cabin crew, ticketing and check-in agents. Many domestic countries have seen opportunity to go international and started their international operations after many years of domestic operations. Also the most important factor that is increasing tourism in India has encouraged the airline industry to expand more . Currently china has tourism industry 10 times more than India which is a major potential area India is looking at and also due to many other factors like open sky policy between India and SAARC countries will encourage it more. Last but not the least after film industry it’s the airline industry which has lot of glamour and because of this it is attracting many new players to start-up its domestic operations.
India is one of the fastest growing aviation markets in the world. The Airport Authority of India (AAI) manages a total of 127 airports in the country, which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves. There are over 450 airports and 1091 registered aircrafts in the country. In India on December 1912 first domestic flight was between Karachi and Delhi. Then in the early fifties, all airlines operating in the country were merged into either Indian Airlines or Air India and this monopoly continued for next forty years. The Directorate General of Civil Aviation (DGCA) controlled every aspect of aviation, including granting flying licenses, pilots, certifying aircrafts for flight and issuing all rules and procedures governing Indian airports and airspace then finally the AAI –Airport authority of India was assigned the responsibility of all the national and international airports and administering every aspect of air transport operation through the Air Traffic Control.
In 1990’s there were lot of changes that took place in aviation sector , the Air Corporation Act came in to stop the monopoly of public sector and the private sector came in. After liberalization of aviation sector many private players started their operations and with full service carriers and low cost carriers. It was accounted in 2006 almost 75% share of domestic aviation market was taken away by private players. This increase in private players market was because the rising middle class and purchasing power of people is gone high also the tourism industry is having a phenomenal growth. The aviation industry basically has three types of players full service carriers, low coast carriers, other start-up carriers. These types have also led to immense competition and led to price wars.

Challenges by Airline Industry

There are major challenges for the airline industry in India with many reasons behind it. The challenges are mentioned below:
Oil prices sky rocketing, which is one of the biggest challenge for the airline industry.
Massive reconstruction is required by the airline industry as it is operating under major losses. This might be the reason because of the global slowdown. Many airlines are facing bankruptcy today.
Purchasing of new airlines requires a big investment and income of the airlines in today’s scenario is not enough for this investment.
The revenue from business traffic has reduced tremendously, resulting in decrease in sales and retaining the consumers also is a big challenge for the major airlines.
The opening of Chinese economy to outward investment and the recovery of the US economy is also a major challenge for the airline industry in India.
Kingfisher also introduced “Kingfisher First”, a premium service which featured the plushest sleeping seats in the Indian skies with a 48 inch pitch, a 125 degree recline, adjustable headrests and fully extendable footrests. Inflight entertainment also has been innovated and taken to a new level with the latest audio and video systems which was available with kingfisher first. Latest Hollywood and Bollywood movies and tracks, games and lot more featured in the extra wide personalised video screens with noise cancelling stereo headphones.
Kingfisher also placed order for ultra- long haul A340-500 for flying non-stop to USA. This order marked the countdown to the commencement of International operations of Kingfisher Airlines. Kingfisher Airlines was the only Indian airline to place an order for the world’s largest body the A380 with 5 more of these. It is also the first airline from India to have brand new A319 and 2 brand new ATR 72-500. By the year 2010, Kingfisher Airlines plans to have 69 aircrafts in its fleet.