BCCA’S INSTITUTE OF MANAGEMENT STUDIES
Nesbit Road, MAZAGAON, MUMBAI – 10 V
SEMESTER :______________________________________
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CLASS : T.Y.B.M.S DIV : 000
SUBJECT : 0000000000
TOPIC : RISE & FALL IN THE AVIATION INDUSTRY
NAME OF PROFESSOR : 000000000

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EXECUTIVE SUMMARY
TITLE : MARKETING STRATEGY OF NESTLE

AUTHOUR: SAMEER

ADVISORS: OOOOOOOO

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DATE:OPOOOOOOOO

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ACKNOWLEDGEMENT
I am indebted to a number of individuals without whose assistance this research could not have been completed in time. My first gratitude goes to 000000, Head Department of commerce BCCA’S INSTITUTE OF MANAGEMENT STUDIES.

I owe a great many thanks to a great many people who helped and supported me during the writing of this book.My deepest thanks to Lecturer, [LECTURER NAME] the Guide of the project for guiding and correcting various documents of mine with attention and care.

He has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to the Principal of, [UNIVERSITY NAME & PLACE], for extending his support.My deep sense of gratitude to [RESPECTIVE NAME] (DESIGNATION), [COMPANY NAME WHERE THE PROJECT WAS UNDERTAKEN] support and guidance.

Thanks and appreciation to the helpful people at [COMPANY NAME WHERE THE PROJECT WAS UNDERTAKEN], for their support.I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers.

NO | CONTENTS | PG-NO | 01 | AVIATION INDUSTRY IN INDIA……………..……………..……Introduction……………..……………..……………..……………..………Role of Aviation Industry in India ……………..……………..……………..History……………..……………..……………..……………..…………….. | | 02 | AVIATION SECTOR IN INDIA……………..……………..………Top Aviation Companies in India……………..……………..……………..List of Aviation Companies in India……………..……………..………… | | 03 | CAREER IN AVIATION SECTOR……………..……………..………Aviation job profiles……………..……………..……………..……………..Companies offering Aviation Jobs……………..……………..…………….. | | 04 | MINISTRY OF CIVIL AVIATION……………..……………..…………India Aviation Ministry Plans……………..……………..……………..…………Airports Authority of India……………..……………..……………..……………Functions……………..……………..……………..……………..…………Privatization of Airports……………..……………..……………..……… | | 05 | BOOM IN INDIAN AVIATION SECTOR……………..……………..… | | 06 | FALL IN AVIATION SECTOR……………..……………..……………..Global and local pressures……………..……………..……………..……Sector crisis……………..……………..……………..……………..……RBI asks banks to help debt-ridden aviation sector………………………..Cut Down of Staff……………..……………..……………..…………….. | | 07 | CIVIL AVIATION POLICY IN INDIA……………..……………..Private Sector Participation and the Civil Aviation Policy……………..Security……………..……………..……………..……………..……………Maintenance……………..……………..……………..……………..Consumer Demand in the industry……………..……………..……………..Growing the Market……………..……………..……………..……………..Other substitutes……………..……………..……………..……………..Low-fare Airlines……………..……………..……………..……………..Consumer Perception……………..……………..……………..…………….. | | 08 | FUTURE OF AVIATION INDUSTRY IN INDIA……………..Current scenario……………..……………..……………..……………..Growth of Indian Aviation industry……………..……………..……………..Market share of key players in the Indian aviation sector…………….. | | 09 | PLAYERS IN THE MARKET……………..……………..…………Air India : India’s Legacy Carrier ……………..……………..……………..Indian Airlines ……………..……………..……………..……………..…Jet Airways……………..……………..……………..……………..………Air Sahara……………..……………..……………..……………..………..Air Deccan………..……………..……………..……………..……………..Kingfisher………………………..……………..……………..……………..Go Air……………..……………..……………..……………..……………..Indigo……………..……………..……………..……………..…………….Paramount……………..……………..……………..……………..…………Spice jet……………..……………..……………..……………..…………Types of service……………..……………..……………..…………….. | | 10 | TEN WORST AIRPLANE CRASHES IN HISTORY…………….. | | 11 | SWOT ANALYSIS……………..……………..……………..…………Strengths……………..……………..……………..……………..…………Weaknesses……………..……………..……………..……………..………Opportunities……………..……………..……………..……………..………Threats……………..……………..……………..……………..…………….. | | 12 | CASE STUDIES………………………………………………………………………………………….. | | 13 | CONCLUSION………………………………………………………………………………………….. | | 14 | REFERENCE………………………………………………………………………………………………. | |

AVIATION INDUSTRY INDIA
Introduction
The aviation industry in India is one of those sectors that saw a constant pace of growth among the other industries in the world over the past many years. The open sky policy of the government has helped a lot of overseas players entering the aviation market in India. From then, it has only been growing in terms of players and the number of aircrafts. At present, private airlines account for around 75% portion of the domestic aviation market.
The 9th largest aviation market in the world is India. Taking the help of the statistics from the Ministry of Civil Aviation, approximately 29.8 million passengers traveled to/from India in 2008, showing a surge of 30% from 2007. The prediction stated that international passengers will touch 50 million by 2015. More opportunities in the aviation industry in India are likely to make way for about 69 foreign airlines from 49 countries.

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people.
The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These government-owned airlines dominated Indian aviation industry till the mid-1990s.

In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector. However, no foreign airline could directly or indirectly hold equity in a domestic airline company.
By 1995, several private airlines had ventured into the aviation business and accounted for more than 10 percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began to lose market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines and these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air travel affordable.
Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and intense price competition among the players. But one of the major challenges facing Indian aviation industry is infrastructure constraint. Airport infrastructure needs to be upgraded rapidly if Indian aviation industry has to continue its success story. Some steps have been taken in this direction. Two of India's largest airports-Mumbai and New Delhi-were privatized recently. Two greenfield airports are coming up at Bangalore and Hyderabad in southern India. Investments are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training and air cargo services. The future prospects of Indian aviation sector look bright.

Role of Aviation Industry in India
The Role of Aviation Industry in India GDP in the past few years has been phenomenal in all respects. The Aviation Industry in India is the most rapidly growing aviation sector of the world. With the rise in the economy of the country and followed by the liberalization in the aviation sector, the Aviation Industry in India went through a complete transformation in the recent period.

Role of Aviation Industry in India GDP-Facts * With the entry of the private operators in this sector and the huge cut in air prices, air travel in India were popularized * On February 18, 1911, the first commercial flight was made from Allahabad to Naini by a French pilot named Monseigneur Piguet
Role of Aviation Industry in India GDP-Growth Factors * The growth in the Indian economy has increased the Gross Domestic Product above 8% and this high growth rate will be sustained for a good number of years * Air traffic has grown enormously and expected to have a growth which would be above 25% in the travel segment * In the present scenario around 12 domestic airlines and above 60 international airlines are operating in India * With the growth in the economy and stability of the country India has become one of the preferred locations for the trade and commerce activities * The growth of airlines traffic in Aviation Industry in India is almost four times above international average * Aviation Industry in India have placed the biggest order for aircrafts globally * Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia

Role of Aviation Industry in India GDP-Future Challenges * Initializing privatization in the airport activities * Modernization of the airlines fleet to handle the pressure of competition in the aviation industry * Rapid expansion plans for the major airports for the increased flow of air traffic * Immense development for the growing Regional Airports
Role of Aviation Industry in India GDP-FDI Policy
The Reserve Bank of India (RBI) announced that foreign institutional investors might have shareholdings more than the limited 49% in the domestic sector. Airports * Foreign equity up to 100% is allowed by the means of automatic approvals pertaining to establishment of Greenfield airports * Foreign equity up to 74% is allowed by the means of automatic approvals pertaining to the existing airports * Foreign equity up to 100% is allowed by the means of special permission from Foreign Investment Promotion Board, Ministry of Finance, pertaining to the existing airports Air Transport Services * Up to 49% of foreign equity is allowed by the means of automatic approvals pertaining to the domestic air transport services * Up to 100% of NRI investment is allowed by the means of automatic approvals pertaining to the domestic air transport services

History
The history of Indian civil aviation began with its first domestic air route between Karachi and Delhi in December 1912. It's opened by the Indian Air Services in collaboration with the UK based Imperial Airways as an extension of London-Karachi flight of the Imperial Airways. Without any backing from the Indian government, Tata Sons Ltd., the first Indian airline, started a regular airmail service between Karachi and Madras three years later. During the time of independence, nine air transport companies were carrying both air cargo and passengers in the Indian Territory.

To further strengthen the aviation sector of India, the Indian Government and Air India (earlier Tata Airline) set up a joint sector company, Air India International in early 1948. And the nationalization of Indian Airlines (IA) in 1953 brought the domestic civil aviation sector under the purview of Indian Government. Later the government-owned airlines dominated Indian aviation industry till the mid-1990s. The adaptation of Open-sky policy in 1990 and other liberalization policies of Indian Government on aviation sector made the industry undergo a rapid and dramatic transformation.
Several private airlines have ventured into the aviation business in succession and many more are about to enter the arena. Today the Indian aviation industry is dominated by private airlines and low-cost carriers, like Deccan Airlines, GoAir, SpiceJet etc. And Indian Airlines, the giant of Indian air travel industry, gradually lose its market share to these private airlines. According to the report of CAPA, these budget carriers are likely to double their market share by 2010 -- one of the highest in the world.
The history of civil aviation in India started with its first commercial flight on February 18, 1911. It was a journey from Allahabad to Naini made by a French pilot Monseigneur Piguet covering a distance of about 10 km. Since then efforts were on to improve the health of India's Civil Aviation Industry. The first domestic air route between Karachi and Delhi was opened in December 1912 by the Indian State Air Services in collaboration with the Imperial Airways, UK as an extension of London-Karachi flight of the Imperial Airways.
The aviation industry in India gathered momentum after three years with the opening of a regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd. However this service failed to receive any backing from the Indian Government. At the time of independence nine Air Transport Companies were operational in the Indian Territory. Later the number reduced to eight when the Orient Airways shifted its base to Pakistan. The then operational airlines were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways.

With an attempt to farther strengthen the base of the aviation sector in India, the Government of India together with Air India (earlier Tata Airline) set up a joint sector company, Air India International, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, Air India started its journey in the Indian aviation sector on June 8, 1948 in Mumbai (Bombay)-London air route.
For many years since its inception the Indian Aviation Industry was plagued by inappropriate regulatory and operational procedures resulting in either excessive or no competition. Nationalization of Indian Airlines (IA) in 1953 brought the domestic civil aviation sector under the purview of Indian Government. Government's intervention in this sector was meant for removing the operational limitations arising out of excess competition. Air transportation in India now comes under the direct control of the Department of Civil Aviation, a part of the Ministry of Civil Aviation and Tourism of Government of India. Aviation by its very nature constitutes the elitist part of our country's infrastructure. This sector has substantial contribution towards the development of country's trade and tourism, providing easier access to the areas full of natural beauty. It therefore acts as a stimulus for country's growth and economic prosperity.

AVIATION SECTOR IN INDIA
The aviation sector in India has registered an estimated increase in domestic passenger sector by 50% per annum in the recent years, while the growth in international passenger section is estimated as 25%. Experts foresee future growth in international cargo by 12%. As per the prediction of the Ministry of Civil Aviation, India in the coming decade will require 1,500 to 2,000 passenger aircrafts out of which 135 planes have already been added. It is also predicted that India's aircraft capacity will stand at 500-550.
In the year 2010, as estimated by the ministry, the domestic market will exceed 60 million and the international traffic will achieve 20 million. And in 2020, Indian airports will be effective enough to support 100 million passengers, which would include 60 million domestic passengers. The quantity of cargo managed by the airport is estimated to decline in the range of 3.4 million tonnes per year.

Top Aviation Companies in India * Air Charter Services Pvt Ltd: Air Charter Services Pvt. Ltd. performs its business operations with private business aircrafts, executive and corporate air charters, helicopter tours, VIP charter flights, and photo and video flights. Its client list incorporates VIPs, corporate firms, tour co-ordinators, travel agents and air medical evacuation professionals. It provides services such as relief, VIP, air ambulance and privacy services.

* Air Charters India: Air Charter India is owned by the STIC Travel Group and has around 100 airplanes in India. It covers several international destinations with an unmatchable logistics support. The aviation company has 40 offices with a highly skilled manpower of above 1000 people. It offers services like heli-skiing, charter flights for pilgrimage in India, heli-sightseeing, corporate jets, executive jets, etc. Air Charter India provides airplanes such as helicopters, business aircrafts, aircrafts for corporates, individuals and group travelers.

* Air India: National Aviation Company of India Limited (NACIL) was the first Indian aviation company which led the way for other companies in the aviation sector. It was initiated before the India gained its independence. Later it collaborated with Indian Airlines and gained the reputation of being the largest airline in South Asian airline. Air India Cargo, Air India Express and Air India Regional are its subordinates in aviation market. It offers First class, Executive class and Economy class services and has codesharing pacts with companies like Air France, Austrian Airlines, Aeroflot, Air Astana, Emirates Airline, Air Mauritius, Kuwait Airways, etc.

* Aviation India: Aviation India provides services like cargo services, flight operation, air charter services, passenger services, freight control, advisory and consultancy, aircraft preservation and renovation, international flight operation, air supervision and helipad engineering, etc. The airlines has skilled workforce and offers total control and functional back-up to several international schedule / non-schedule operations.

* Indian Airlines: Indian Airlines was inaugurated on 1st August, 1953 and in collaboration with its fully governed subordinate in aviation market Alliance Air, it takes pride in being recognized as one of the biggest regional airline systems in Asia. It has a fleet of 70 airplanes and covers 76 destinations, 58 Indian destinations and 18 foreign destinations. Globally it covers Oman, UAE, Kuwait, Qatar, Singapore, Yangon, Pakistan, Maldives, Bangladesh, Sri Lanka, etc.

* Deccan Aviation Ltd.: The aviation company has its presence in 8 places namely, Mumbai, Ranchi, Surat, Hyderabad, Bangalore, Katra, Colombo (Sri Lanka) and Delhi. It has 350 daily departures and covers 65 destinations in India. It offers the benefit of no-cost travel to infants, ticketing counters, lavish aircraft interiors and ticketing flexibility.

* Indigo: Indigo is a utilitarian low-price domestic airline which offers feasible flying alternatives for millions. The airline was facilitated by the Air Passengers Association of India (APAI) as the “Best Low-Fare Carrier in India for the year 2007”. Indigo has 120 daily departures and a fleet of 19 Airbus A320. The airline covers 17 destinations namely, Agartala, Bangalore, Bhubaneshwar, Ahmedabad, Delhi, Chennai, Guwahati, Hyderabad, Goa, Imphal, Kolkata, Mumbai, Vadodara, etc.

* Paramount airways: Paramount Airways is a business class airline which has its base in India and headquarters at Chennai. Endorsed by Madurai-based Paramount Group and Paramount Railways was inaugurated in 19th October 2005. Its fleet comprises 5 aircrafts and it operates in 8 destinations.

* Go Air Airlines: Like SpiceJet, a Go Air airline is also a low price airline endorsed by the Wadia group. It was inaugurated in Mumbai in June 2004. It operates in 11 cities with 61 daily departures. It has started its functions in Ahmedabad, Chennai, Bangalore, Coimbatore, Goa, Cochin, Jaipur, Mumbai, Pune, Delhi, Srinagar, etc.

* Kingfisher Airlines: It is the one and only 5-star airline in India which offers excellent first class service on domestic itineraries also. A part of UB group, Kingfisher Airlines has received 30 awards for its novelty and customer satisfaction. After its tie-up with Deccan, the airline covers 64 cities and has 484 daily departures.

* Spice Jet: Spice Jet is basically a low cost airline which incorporates many Boeing 737-800 airplanes in its fleet. It covers 14 destinations in India.

* Air Sahara: Air Sahara was inaugurated on December 3, 1993 with a fleet of only two Boeing 737-200s. Now it comprise of 27 aircrafts, 135 daily departures and availability of 16500 seats on regular basis. It reaches various Indian destinations like Bangalore, Kolkata, Delhi, Lucknow, Mumbai, Chennai, etc.

* Jet Airways: Jet Airways was established on May 5, 1993. It earns yearly revenue of Rs 2502.89 and total income of approx Rs. 117868.8 Million. At present it id India's biggest private domestic airline with 62 aircrafts and a market share of 25%. It covers 50 destinations with 340 regular departures. Jet Airways has pacts with foreign airlines, such as Lufthansa, Swiss, Gulf Air, Austrian Airlines, Qantas and Thai.

List of Aviation Companies in India

* Ahmedabad Aviation and Aeronautics Ltd. * Air Charter Services Pvt. Ltd. * Air Charters India * Air India Ltd. * Alcoa Fastening Systems Aerospace * Avaids Technovators Pvt. Ltd. * Aviation India * Bengal Institute of Technocrats * Deccan Aviation Ltd. * Global Vectra Helicorp Ltd * Hindustan Aeronautics Ltd. * India Flysafe Aviation Ltd.IndiGo * Jagson Airlines LtdJet Airways (India) Ltd. * Kingfisher Airlines Ltd * Obstruction Lights * Rajiv Gandhi Aviation Academy * SpiceJet Ltd. * Taneja Aerospace & Aviation Ltd * Tesscorn Systems * The Bird GroupThomas Cook (India) Ltd * Trans Asian Aviation

CAREER IN AVIATION SECTOR
With liberalization of aviation industry in India, several job profiles have opened up for experienced job-seekers as well as freshers. Those desirous of a career in aviation sector have plenty of option to look out for. From customer support, ticket reservation, transportation of perishable cargo, regulation of traffic to cargo reservations, aviation administration and cockpit resource management, the aviation sector offers plenty of job opportunities. Even the government or aviation regulatory bodies offer numerous job profiles related to this field.

Aviation job profiles
If you are interested in a career in Aviation sector, then look out for job opportunities suiting your interests and qualifications.
Jobs for Pilots: Candidates with training in flying may join any of the reputed airline companies in India or abroad as pilots.
Jobs for Aeronautical Engineers :Candidates with degrees in aeronautical engineering have excellent career opportunities in the aviation industry. Several aircraft manufacturers hire aeronautical engineers for entry level openings as well as senior positions.
Jobs for Air Hostess : This profession attracts smart and young women who love to do a lot of traveling and believe in hard work. Several companies offer lucrative pay packages and other facilities for the pleasure of their employees in this field of work.
Jobs in Airline Ticketing : Candidates with the requisite qualification may join any of the airline companies. The job includes reservation and booking of flight tickets for the customers. You will also have to help them in planning their route.
Customer Service Jobs : There is a great demand for young and hardworking people in this field. Customer satisfaction is the main priority for all the airlines today. Customer service executives are entrusted with the duty of looking after various problems and requirements of the clients.
Apart from these, one can also look out for job opportunities in administration, traffic regulation, cargo management, ground operations, aircraft maintenance and other areas related to this field.

Companies offering Aviation Jobs

The following list of companies in India offers various jobs in the aviation sector:

* Sahara India * Indian Airlines * Indian International Airways Ltd * Kingfisher Airlines * Haytrans I Pvt Ltd, * Flywell Aviation Pvt Ltd, * Deccan Airlines, * Multi Track Air Charters * SRC Aviation, Panda Logistics Ltd * Hindustan Aeronautics Ltd, Bird Group * Trans Asian Aviation, * Varman Aviation Pvt Ltd * Taneja Aerospace and Aviation Limited and Sam Air Pvt Ltd

MINISTRY OF CIVIL AVIATION

The Ministry of Civil Aviation, India is responsible for the regulation of civil aviation in India. The Ministry of Civil Aviation is the nodal Ministry responsible for the formulation of national policies and programmes for development and regulation of Civil Aviation and for devising and implementing schemes for the orderly growth and expansion of civil air transport. Its functions also extend to overseeing airport facilities, air traffic services and carriage of passengers and goods by air. The Ministry also administers implementation of the Aircraft Act, 1934 and is administratively responsible for the Commission of Railways Safety.

he Ministry also overlooks the planning and implementation of schemes for the growth and expansion of civil air transport, airport facilities, air traffic services and carriage of passengers and goods by air. The Ministry exercises administrative control on various/affiliated autonomous organizations along with CCRS which is responsible for safety in rail travel and operations in terms of the provisions of the Railways Act.
The ministry is under the charge of a Minister of State for Civil Aviation and Praful Patel is the present incumbent. The Secretary is the head of the Ministry and is assisted by one Additional Secretary & Financial Adviser, three Joint Secretaries, seven officers of the level of Director / Deputy Secretary / Financial Controller and ten officers of the level of Under Secretary. It is located at Rajiv Gandhi Bhavan, Safdarjung Airport, New Delhi.

India Aviation Ministry Plans
India, the second-fastest growing major economy, plans to invest 400 billion rupees ($8.6 billion) in the aviation industry during the next five years, Minister Praful Patel said. “We are in the process of either upgrading or setting up new airports across the country, Patel, 53, said today in an interview in New York yesterday. Economic growth and rising incomes have boosted air travel in the world’s second-most populous nation. India’s airline passenger numbers may climb to a record 50 million this year from 44 million last year, Boeing Co. forecast last month. Patel expects the industry to grow at least 20 percent over the next five years.
The government has already spent 400 billion rupees in the last few years to upgrade and build new airports in cities including Hyderabad and Bangalore and in the capital, New Delhi. The nation has 92 airports compared with 45 in 2004, Patel said. “The government is also investing in runways and navigation systems,” he added. The Aviation Ministry has recommended that overseas airlines be allowed to own as much as 25 percent of domestic carriers, he said. “This is our proposal but it’s a larger process of decision making within government,” he said. The government currently doesn’t allow overseas carriers to own stakes in local services.

Airports Authority of India
The Airports Authority of India (AAI) is an organization working under the Ministry of Civil Aviation that manages all the airports in India. The AAI manages and operates 126 airports including 12 international airports, 89 domestic airports and 26 civil enclaves. The corporate headquarters(CHQ) are at Rajiv Gandhi Bhawan, Safdarjung Airport, New Delhi. V.P Agrawal is the current chairman of the AAI.

Functions * Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO * Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves. * Construction, Modification and Management of Passenger Terminals * Development and Management of Cargo Terminals at International and Domestic airports. * Provision of Passenger Facilities and Information System at the Passenger Terminals at airports. * Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc. * Provision of visual aids. * Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.

Privatisation of Airports
The AAI was involved in a tussle with the Ministry of Civil Aviation over the issue of privatization of its two most profitable airports, Delhi Airport and Mumbai Airport. The Government of India handed over these two airports to private companies for the purpose of modernization in 2006. The privatization for Mumbai has been handed to GVK Group and for Hyderabad, Delhi to the GMR Group.
The airports which have been privatized are : * Ahmedabad - Sardar Vallabhbhai Patel International Airport * Cochin - Cochin International Airport * Bangalore - Bengaluru International Airport * Delhi - Indira Gandhi International Airport * Hyderabad - Rajiv Gandhi International Airport * Mumbai - Chhatrapati Shivaji International Airport

BOOM IN INDIAN AVIATION SECTOR

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 study says that the civil aviation sector is also set to become a Rs 35,000-crore industry by the same time. These jobs will rise on account of the modernization of Delhi and Mumbai international airports and the revamping of 35 non-metro airports. With the sudden increase in the number of airlines and other consolidations and expansion plans, pilots are in tremendous demand. India would require approximately 7,500-8,000 pilots and an equal number or more air cabin crew by 2010.

Aviation sector in India is growing at a whopping 25% per annum, creating a large number of jobs. There is presently a shortage of trained pilots. The industry is expected to add 130 airliners to its current fleet of 270 airliners, which would, in turn, increase manpower demand. The job opportunities include that of flight dispatchers, cabin crew, airline managers, airport managers and ground handling personnel. The industry would create 2,00,000 jobs by 2017.
There is already a shortage of pilots in the sector and so is that of commanders and captains. Currently, 2,500 pilots are working with airlines in India, of which 475 are expat pilots. The doors of the cockpit are now open to the women as well. The number of women joining aviation sector is on the rise. From one or two women in a batch of 100 students, the number has now increased to 10 or 12. Indian currently has 76 women pilots, and the number is rising with every new batch. As per the statistics, forty of Air Deccan's 496 pilots are women. Kingfisher, which has 26 women from a total of 390 pilots, also got its first woman captain just recently. Even though more and more women are opting for this career, the shortage still continues. Due to this paucity of pilots, airlines in India are largely dependent on expatriate pilots.
The ongoing economic reforms in India have led to the opening up of the aviation sector to private enterprises. There are several large private airline companies in India now, apart from the two public sector enterprises, Air India and Indian Airlines. Aviation sector suffered a major slump in the past few years due to global recession. However, the last two years have witnessed a market revival for the aviation business. Future growth prospects are quite promising, leading to new career opportunities for women in this sector. In addition to the growth of domestic air traffic and jobs in airlines, there are also going to be new employment opportunities for women at airports. Massive expansion plans for international and domestic airports in major metro cities such as New Delhi and Mumbai are already underway. A new terminal at New Delhi’s Indira Gandhi International Airport is about to open, which will require a substantial staff support to run its operations. Major revamp plans for 35 non-metro airports in India are also planned, which will create new ground jobs in these cities as well.
A study by the Associated Chambers of Commerce and Industry (Assocham) has also supported the predictions of an impending boom in the aviation sector in India. It is estimated that the total number of aircraft in the aviation sector will increase more than double in the coming years, when there is already a shortage of pilots and other trained support staff. New job opportunities are expected to arise for the positions of pilots, flight dispatchers, cabin crew personnel, airline managers, airport managers and ground handlers. An additional 200,000 jobs are estimated to get added in the sector by 2017. The number of women pilots is also on the rise in India, with nearly 10 percent of all domestic flight pilots in India being women . There are a number of air hostess training institutes coming up in India in the private sector. These jobs are highly sought after by the women of today in both metro and non-metro cities. The pay packages and the perquisites are lucrative, and flying has been traditionally considered a glamorous profession, which attracts a lot of young women to aspire for a career as an air hostess. There are also ideal job opportunities for women in customer service, customer relationship management, cargo control and airline ticketing .
The overall number of cabin crew personnel in various airlines in India is expected to grow from 10,207 members in 2007-08 to 20,284 by 2011-12. Within 3 to 5 years after recruitment, a flight steward or an air hostess can aspire to become a Fight Purser, if the work performance is good. The salary and perks continue to rise higher along with the work promotions . Indian women have set their sights on the skies as the aviation sector grows and expands its scope. With women handling the sensitive positions of commander pilots and air traffic controllers, the Indian aviation sector has come a long way from the time when airlines used to employ women only as air hostesses and flight attendants.

FALL IN AVIATION SECTOR
Indian aviation is the barometer to measure India's boom-bust economy. New wealth and new budget airlines were meant to see the sector grow but instead the market has nose dived. Until recently the aviation sector was expected to take off. Passenger numbers showed the speed of growth, 43 million in 2007 versus 6 million in 2004, airports like Indira Gandhi in Delhi were upgraded to cope with expected increased capacity. How things change.

Global and local pressures
Global pressures - oil prices and slowing demand mean global aviation industry losses of US$ 5 billion this year - are exacerbated by local pressure and state sponsored bureaucracy. High jet fuel taxes - 70-80% higher than other international hubs - led to August price hikes, unable to pay, new-flyers have reverted to traditional land transport; net result is estimated Indian industry losses of US$2 billion.
Sector crisis
Aviation minister, Praful Patel, says the sector is in "severe crisis", but Government insist airlines must clear debts - Jet Airways and Kingfisher Airlines owe a combined US $21 million to state-owned oil companies - before they consider lowering taxes.
Airlines are forced to take radical action to stay in business. State owned Air India wants to reduce staff numbers by nearly 50%. Despite having 145 aircraft, it employs 33,000 staff, giving it one of the highest staff-to-aircraft ratios of any airline, contributing to expected losses of US$ 800 million this financial year. State owned' means - even despite the seriousness of the situation - sacking unneeded staff is impossible due to fear of powerful state labour unions. Instead, Air India is forced to dodge the issue by inviting 15,000 staff to apply for unpaid leave for up to five years.

RBI asks banks to help debt-ridden aviation sector
The Reserve Bank has asked lenders to work out a special concessional package for the crisis-ridden aviation sector, reeling under financial debt burden of a staggering Rs60,000 crore. In response, banks said they would look into the problems of airlines on case-by-case basis. The Indian airline industry is facing mounting debts due to the economic downturn and resultant excess capacity, which still exists. Of late, the industry has been showing signs of recovery, which could gather pace if banks restructure loans. According to an estimate, the cumulative debt of the airline industry stands at about Rs60,000 crore. As of March, 2010, Air India had about Rs 40,000 crore debt, while Kingfisher had a debt of about Rs6,000 crore.
"The RBI has allowed in the case of aviation sector a special concession. Banking industry could on a case-by-case basis, subject to the guidelines and parameters given by RBI, look to see how this industry could be helped by a rescheduling, restructuring...," State Bank of India chairman OP Bhatt told reporters on the sidelines of a banking conference here. The RBI had sent a communication to the banks with regard to debt restructuring for airlines in the last week of August. "We are sensitive to the requirement of the aviation sector and have communicated the same to the banks," RBI Deputy Governor Usha Thorat said.

While SBI's aggregate exposure to the aviation sector is about Rs3,000 crore, Bank of India's exposure is Rs 4,000 crore. "Now the discussion is going on amongst the banks' consortium (how to go about on the recast)," Bhatt said. Bank of India executive director M Narendra said, "RBI has given out some guidelines and we are currently studying and discussing those guidelines within the consortium." Major carriers like Air India and Jet Airways want to restructure their debts and have been in talks with banks to get soft loans, instead of the ones with high-interest rates.
Cut Down of Staff
India's national carrier, Air India and other is deferring the payment of staff salaries to cope with a credit crunch. When Air India recently announced that salaries for July will be paid two weeks late to its 30,000 staff, angry staff members threatened a nationwide protest. But the airline management says it has little choice in light of the financial crisis it faces. The airline incurred losses of $800 million last year. Government-owned Air India is not the only one reporting massive losses. A number of private airlines, which set up shop in the last five years hoping to benefit from a growing economy, are also struggling with high debt and huge losses.
The federal government has promised a bailout package for Air India. Rajesh Menon at the Confederation of Indian Industry says other airlines are also asking the government to consider measures that will help them reverse the decline in profits. "There is an issue of financial viability of the way airlines are functioning," said Menon. "There is a discussion already going on with the Government of India trying and seeing the way there could be support mechanisms in this regard … there is an issue on taxation which at least if it could have been sorted out it would have been a little more viable."

CIVIL AVIATION POLICY IN INDIA
In the context of a multiplicity of airlines, airport operators (including private sector), and the possibility of oligopolistic practices, there is a need for an autonomous regulatory authority which could work as a watchdog, as well as a facilitator for the sector, prescribe and enforce minimum standards for all agencies, settle disputes with regard to abuse of monopoly and ensure level playing field for all agencies. The CAA was commissioned 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.

* To ensure aviation safety, security * Effective regulation of air transport in the country in the liberalized environment * Safe, efficient, reliable and widespread quality air transport services are provided at reasonable prices * Flexibility to adapt to changing needs and circumstances * To provide all players a level-playing field * Encourage Private participation * Encourage Trade, tourism and overall economic activity and growth * Security of civil aviation operations is ensured through appropriate systems, policies, and practices

Private Sector Participation and the Civil Aviation Policy

* Private sector participation will be a major thrust area in the civil aviation sector for promoting investment, improving quality and efficiency and increasing competition. * Competitive regulatory framework with minimal controls encourages entry and operation of private airlines/ airports. * Encouragement of private sector investment in the construction, upgradation and operation of new and existing airports including cargo related infrastructure. * Rationalization of various charges and price of ATF/AVGas will be undertaken to render operation of smaller aircraft viable so as to encourage major investment in feeder and regional air services by the private sector. * Training Institutes for pilots, flight engineers, maintenance personnel, air-traffic controller, and security will be encouraged in private sector. * Private sector investment in non-aeronautical activities like shopping complex, golf course, Entertainment Park, aero-sports etc. near airports will be encouraged to increase revenue, improve viability of airports and to promote tourism. CAA will ensure that this is not at the cost of primary aeronautical functions, and is consistent with the security requirements. * Government will gradually reduce its equity in PSUs in the sector. * Government will encourage employee participation through issue of shares and ESOP.
Security
Strict national civil aviation security programme to safeguard civil aviation operations against acts of unlawful interference have to be established through regulations, practices and procedures, which take account of the safety, regularity and efficiency of flights. A good safety record is a judgment of past performance but does not guarantee the future, although it is a useful indicator. While pilot error is said to be on the decline, factors of fatigue, weather, congestion and automated systems have complicated safety. Airline operators, pilots, mechanics, flight attendants, government regulators and makers all have a stake in making aviation as safe as possible. The International Air Transport Association (IATA), the International Civil Aviation Organization (ICAO), manufacturers and others bodies cooperate in this aim. As world air traffic is expected to double or more by 2020, the accident rate must be reduced in order to avoid major accidents occurring more frequently around the globe.
Maintenance
Private sector participation is encouraged in existing maintenance infrastructure of Indian Airlines and Air India like Jet Engine Overhaul Complex (JEOC) and new maintenance facilities including engine overhaul and repairs with up to 100 % foreign equity.
Indian Airlines has major maintenance facilities for all the types of aircraft in IAL fleet i.e. Airbus-300, Airbus-320, Boeing-737 and Dornier-228. The Engineering Department is responsible for maintenance of aircraft and is answerable to Director General of Civil Aviation (DGCA) in maintaining the Quality Control. The Maintenance of the aircraft is carried out at four major bases located at Delhi, Mumbai, Calcutta and Hyderabad.
Sahara also has its own NDT Shops, wheels and brake assembly shop, battery charging shop, avionics shop and seat repair shop. It is the only private domestic airline to have its own hangar for aircraft maintenance. It is also the only private domestic airline to have self maintenance capability.
Air Deccan, Bangalore-based airline, has decided to set up its engineering and maintenance facility for Airbus-320 operations, basing two of a fleet of 11 Airbus jets here. They have also sought land from the Airports Authority of India to build an exclusive hangar to carry out 300 and 500-hour checks, apart from C-Checks and line maintenance.
Consumer Demand in the industry
The Potential Market
While formulating the national strategy one must remember a few aspects of Indian Passenger Aviation Market - * Potentially, India is a very large corporate and luxury travel market. * Potentially, it is also a very large low-fare market. * India also has largely blocked but significant markets in the north in China. * India, unlike other major travel hubs in the region, is an original market both for originating and turnaround traffic. * India is also a potential transit hub in more than one direction.
In Aviation circles India has become Asia's hot growth market and in the words of SIA CEO it is, along with China, one of the two "locomotives" for growth in the continent. Thus to enter in to an open skies agreement when India has nothing more to offer than land for airports and the so called cheap blue and white collar labour will tantamount to accepting a second class economic citizenship in the comity of nations.
Growing the Market
Airbus Industries Research shows that there is a cut-off point beyond which the preferred mode of travel changes. Thus small distance journeys are convenient by road while longer journeys are preferred by rail and air. The data should actually be viewed in terms of time involved rather than the distance since technological development in any field can impact the time taken for same travel. As has already happened in Europe, high speed trains have reduced the need for short haul services while the multi-lane smooth highways have similarly increased the distance up to which one can comfortably travel by road.

While data for similar preference change in the mode of travel is not available for India, some assumptions are possible. It can, for example, be safely assumed that in the current Indian context bus journeys of say up to 4-5 hours duration are quite easeful even though often stretched up to 10 hours and sometimes even overnight due to non-availability and/or inadequacy of train services.
To a business traveller, overnight journeys by train are quite comfortable although given the economic situation even 24 hour journeys are quite acceptable. Beyond that, given the distances within the country any one would prefer to hop on a flight provided it is offered as an alternate travel service and not something only for the corporate world. For this to succeed, the low cost travel will have to be both with predictable pricing and longevity of offer beyond the gimmickry of attention getting news. This is the only way to enlarge the pie and aim at strata beneath the upper crust.
Other substitutes
The issue of affordability of domestic air travel has been well addressed in the Naresh Chandra Committee Report on Aviation. While the goal of affordability is absolutely well placed, the assumption that the lowering of tariffs, taxes and charges alone; for fuel, landing or travel, is the answer that needs careful examination. Even if these charges constitute a significant part of the fare, they need to be evaluated in the context of competition and monopoly. At home, considering road and rail as the competition, the charges for fuel should be viewed as a similar cost composition for all modes of travel. To reduce fuel charges for any one sector while enhancing or retaining them at the same level for the others will distort the field. This, particularly when airlines have, and can have, the freedom of picking up fuel from other competing nations. Fuel charges at home, therefore, should be viewed as a part of the overall petroleum pricing policy. This is important since petroleum, as fuel is common to many industry groups apart from being a raw material for some. Incidentally, how much of what product is extracted from the available crude is as much a matter of choice as is it a matter of the quality of crude.
Low-fare Airlines
Despite reports of low budget airlines loosing their momentum due largely to the incumbent firms’ crushing the competition with even lower fares whenever a low cost upstart invaded its market, low-fare will always remain the basic market. This is amply proven by the success of Southwest in the US and Ryanair and Easyjet in Europe.
To any buyer of service or goods, price and quality are always two key considerations. No doubt there is a class of air passengers who will only look at the bonuses, be that in the form of Frequent Flyer Miles during peak season or extra cushioning of the seat. These are generally the corporate travellers where someone else is footing the bill. There is also an occasional traveller who, being in distress will not look at the price during emergency. While the corporate travellers are a distinct segment and will be serviced fully, obviously civil aviation will have to look beyond them if it hopes to expand the market. In the US, the low fare airlines have almost a 30% share of the entire passenger aviation and in the recent past Southwest, the leading Low-fare US airlines has outperformed even the largest US airlines in passenger kilometres.
Consumer Perception
We conducted a survey in order to find the consumer perception about airlines. The following results have been culled out from the survey of 116 individuals. The sampling method was a mix of purposive and stratified random sampling and attempted to duplicate the general consumer profiles of the population (as based on preliminary secondary data). The age group of the sample was between 18 and 58, across gender, location, and socio-economic class (mapped on education and occupation, with a majority of the sample in SEC A and B+).

FUTURE OF AVIATION INDUSTRY IN INDIA
The Indian aviation industry has shown continued growth in recent years with key drivers being positive economic factors (including high GDP growth), industrial performance, corporate profitability/expansion, higher disposable incomes and growth in consumer spending as well as wider availability of low fares.

here is tremendous potential for Indian aviation to grow, currently 42 million annual passengers fly domestically and 34 million internationally. “If Indians flew as much as Americans, it would be a market of over 4 billion passengers. With the spending power of Indians set to triple over the next two years, the potential for growth is incredible,” said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA) at an Interactive meeting on “Challenges of Indian Aviation” organized by Confederation of Indian industry (CII) today.
India has to have a more coordinated cross-ministry government approach in shoring-up the gains in India’s aviation industry. But there is still much more to be done. It’s time to take care of structural weaknesses and go for a comprehensive approach with a common vision by all involved. The success of India’s airlines should not be compromised by an archaic investment policy that isolates them from global trends,” said Bisignani noting recent trends of consolidation, multi-hub and multi-brand strategies. . India allows 100% FDI in transit systems, ports, harbors, hotels, ocean transport and road systems. But airline FDI is restricted to 49%. Moreover, no foreign airline can invest in an Indian airline. To build competitiveness, it is critical that the costs of operating in India are reduced. “It is an embarrassing situation for such a relevant country as India-which is a member of the ICAO Council-to be ignoring rules that it has helped to develop,” said Bisignani.
The air transport industry has committed to improve fuel efficiency by 1.5 percent per year to 2020, cap net emissions from 2020 with carbon-neutral growth and cut net emissions in half by 2050 compared to 2005. “IATA continues to expand our India operations….this could be the decade when Indian aviation will reach its potential. But there are no guarantees for success without continued hard work, change and a common vision for success shared across government and with the industry. India has come a long way in addressing the challenges of growth. The foundations for success are half-laid and IATA will continue its support to help finish the job,” added Bisignani. Dr Vijay Mallya, Chairman, CII National Committee on Civil Aviation and Chairman and MD of Kingfisher airlines Ltd said that, the Indian aviation industry will see a new high and India has the potential to emerge as an aviation hub. But a supportive, conducive environment is required. The few challenges faced by the industry include high cost of aviation, restricted FDI policy among others.
Current scenario:
The current growth rate in domestic and international travel exceeds 25%, the highest in the world. In the period April-September 2006, the total aircraft movements witnessed an increase of 29.6% year-on-year to 494.92 thousand aircraft movements, as compared to 318.89 thousand during April-September 2005.
The Indian domestic market grew at almost 50% in the first half of 2006. On average, full service carriers are shedding a remarkable 1.5% of market share every month to low cost carriers.

Growth of Indian Aviation industry
The Indian Civil Aviation market grew at a CAGR of 18%, being valued round US$ 5.6 billion in 2008. Further statistics revealed that the air traffic in August 2009 was a double digit figure. The domestic airliners flew 3.67 million passengers in August 2009, as against 2.92 million in the corresponding period of 2007, up by 26%. The Centre for Asia Pacific Aviation (CAPA) has estimated that the domestic traffic will go up by 25% to 30% till 2010 along with a surge in the international traffic by 15%. There would be more than 100 million passengers by 2010. Then again by 2020, Indian airports will in all probability handle over 100 million passengers every year. The investment plans to the tune of US$ 9 billion has been made by the Aviation Ministry for modernizing the existing airports by 2010.

In terms of domestic passengers' volume, US have always been the leader with followers in the league like China, Japan and India. The number of domestic flights went up by 69% from 2005 to 2008, with the domestic aviation sector growing at 9-10%.
Indian Aviation Sector has witnessed tremendous growth in the recent past which is driven by sound demographic, macroeconomic, government aided reforms and market dynamics. Industry sources call it the PEST Mechanism namely P-Political; E-Economic S-Socio-Cultural; T-technological. The drivers to growth are: * Increase in Consumerism * Rising Disposable incomes * Rising Middle Class Population * Untapped Market * Increasing Business Travel * Increasing Tourists Travel * Entry of Low Cost Carriers * Increasing Competition * Government Reform Measures

Future scenario:
The aviation industry is expected to grow at a compounded annual growth rate of 25% till 2010. Also, by 2010 Indian airports will be handling between 90 and 100 million passengers per year, as against the current 34 million passengers. It is expected that nearly 80% of this growth will be driven by the low cost carrier segment (LCC). By 2008, the LCCs would capture 65% of the direct on-line air ticket market from 61% in 2005. | International | Domestic | Total | | No. in millions | Percentage growth | No. in millions | Percentage growth | No. in millions | Percentage growth | 1999-00 | 13.29 | 2.90% | 25.74 | 6.90% | 39.04 | 5.5% | 2000-01 | 14 | 5.40% | 28.01 | 8.80% | 42.02 | 7.70% | 2001-02 | 13.63 | (-)2.7% | 26.36 | (-) 5.9% | 39.98 | (-)4.9% | 2002-03 | 14.82 | 8.80% | 28.9 | 9.60% | 43.72 | 9.40% | 2003-04 | 16.65 | 12.30% | 32.04 | 10.09% | 48.69 | 11.40% | 2004-05 | 19.45 | 17.00% | 40.1 | 25.00% | 59.54 | 22.30% | 2005-06 | 22.36 | 15.10% | 50.98 | 27.90% | 73.34 | 23.70% |

Market share of key players in the Indian aviation sector Name of the players | Market Share | Kingfisher Airlines and Kingfisher Red (previously Air Deccan) | 28% | Jet Airways and Jet Lite (previously Air Sahara) | 25% | Air India and Indian (previously Indian Airlines) | 16% | IndiGo | 14% | SpiceJet | 12% | GoAir | 3% | Paramount Airways | 2% | MDLR Airlines | 0.004% |

PLAYERS IN THE MARKET
Indian skies are housing a decent number of airlines today vis-à-vis the one man army scenario prior to 1990’s. The proud residents of Indian skies include the following:
1. Air India : India’s Legacy Carrier
The history of Air India is the History of Indian Aviation. Air-India began operating in 1932 as Tata Airlines, named after J. R. D. Tata, its founder. Founded as a small, private, domestic carrier in 1932, Air-India is now government owned. It flies only International routes and has negligible presence felt while catering to the domestic traffic.
2. Indian Airlines :
With nationalization of Air Transport in 1953 via Air Corporation Act,1953 , National Flag carriers : Indian and Air India were born. Indian was born from merger of 8 domestic carriers .It caters mainly to domestic routes with some presence felt in neighboring nations. Like Air India it’s a full service carrier. It has a subsidiary ‘Alliance Air’ .Its Symbol is Asoka’s Chakra. For a long spell of time, the two national carriers enjoyed sole monopoly in the air transport segment as private carriers were barred from entering the segment as per Air Corporation Act, 1953. It was after the New Economic Policy, 1991 after which things fell in the right places and successful attempts were made to enter the segment by private players like Jet, Sahara and others. Yet another, turning point has come in the history of the Indian Aviation Sector when Air India was granted permission from the Government of India to merge with Indian Airlines, the two flag carriers of India. This Mega Merger marked the first marriage in the Indian skies which was followed by two more marriages. The name of the new airline will remain Air India, since it is known worldwide. They have been in the works of completing the merger since January 2007, after permission. Competition Issues in the Civil.
3. Jet Airways:
In 1993, Jet commenced its operations after the ban was lift by the government following the repeal of Air Corporation Act.1956. Jet Airways will be the most preferred domestic Airline in India. It will be the automatic first choice carrier for the traveling public and set standards, which other competing airlines will seek to match. It is the only airline that stood the crunch of late 1990’s. Jet started its International Operations in 2004 and carries more than 7 million passengers per annum. Recently, the company made news when Naresh Goel led Jet Airways took 100 % stake in their arch old rival Air Sahara in May, 2007. This earmarked the second marriage of the season in the Indian Skies after the AIIA deal.
4. Air Sahara:
Like Jet, Sahara too began its operations in 1993 after the domestic Air Market was opened by the govt. in 1990’s. Air Sahara Limited is a leading private airline in India, owned by the diversified Sahara India Parivar group. After Jet, it was only airline that could stand the torrential winds of late 1990’s. After series of controversies Air Sahara has been taken over by Jet Airways in May, 2007. The airline is now renamed as “Jet Lite”. Jet has intensions of converting Air Sahara in sync with LCC model to reach every segment of air travelers.
5. Air Deccan: India’s first budget carrier and now the largest flew its first carrier in 2003.Headed by Captain Gopinath, Air Deccan truly redefined the accessibility to the Indian Skies. It injected competitive spirits into the system and gave common man wings by reducing air fares which matched the first Class Railway Fares. The third wedding in skies was marked when Dr Vijay Mallya of Kingfisher Airlines picked up 26 % stake in Air Deccan.
6. Kingfisher:
The Airline began its operation in May, 2005 .it’s the by far the most flamboyant airline in India, giving tough competition to Jet Airways in in-flight services. It is a major Indian luxury airline operating an extensive network to 34 destinations, with plans for regional and long-haul international services. Kingfisher Airlines, through one of its holding company UB holdings Ltd has acquired 26% stake in the budget airline Air Deccan and has offered to buy further of 20% stake from the secondary market.
7. Go Air:
The most colourful airline in India (comes in 6 colours) started its operations from November, 2005. It belongs to the Wadia group.
8. Indigo:
The airline made heads turn when it placed the ambitious order of 100 aircrafts with airbus. The carrier began its operations in August, 2006.
9. Paramount:
It’s the only high value flier that India can boast of .It is the only carrier that uses 70 passenger capacitated Embraer Aircraft. The airline started operations in October 2005. It was established by Madurai-based textile company Paramount Group. Paramount presently operates only in South India. There was news of Paramount showing interest in in picking up stake in Go Air and Spicejet so as to foray into Northern India easily. However, so far dotted line has not been signed with any carrier.
10. Spice jet:
SpiceJet, a reincarnation of ModiLuft marked its entry in service by offering fares priced at Rs.99 fares for the first 99 days since its inception in 2005. The carrier is giving tough competition to Railways. This airline is known to have had made the least number of mistakes.
Types of service 1. Scheduled Air Transport Service means an air transport service undertaken between the two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series. 2. Non-Scheduled Operation includes services other than scheduled air transport service Eg: charter basis and/or non-scheduled basis. The operator is not permitted to publish time schedule and issue tickets to passengers. 3. An air cargo service means air transportation of cargo and mail. Passengers are not permitted to be on these operations. It may be on scheduled or non-scheduled basis.

TEN WORST AIRPLANE CRASHES IN HISTORY
While several of my articles have touched on negligence or controversy in the world of aviation, they tend, in the end, to bolster its reputation for safety. Some people, eager for some whistleblowing or a sizzling expose, have been disappointed, expecting dirt but instead finding a pilot who ultimately asks the jaded traveler to extol, rather than revile, the experience of commercial flight, even as you’re battling incipient thrombosis in 45J. As of yet, nobody from the Air Travelers Association has submitted an indignant protest to Salon, so maybe I’m on to something. If you want to understand what inspires me, please go back and read Airplanes Don’t Get No Respect. Nobody is paying me to parrot the industry’s party line; the airlines have their lobbyists who can do that much more effectively than I can. If it seems I shy from the occasional opportunity to indict, it’s because, with various asterisks, flying happens to be exactly as dependable as its advocates, this one included, have always maintained, and despite what David Stempler (see Air Travelers Association above) or anyone else leads you to think, neither the FAA nor the much maligned airlines are out to screw you or get you killed.

That said, I promised to indulge the morbid fascinations of some of you, and here goes. What follows is a list of the ten worst airplane crashes ever, with a short synopsis for each. In an interview years ago, the novelist Kurt Vonnegut was asked how he’d like to die. And most of us, I suppose, occasionally play out our own deaths in line with some exciting script. “In a plane crash on Mount Kilimanjaro,” was Vonnegut’s answer. And if you think about it, there’s something evocative about that — a jet getting lost in the fog, smacking into the side of that big Tanzanian mountain. Is it the Kilimanjaro part, or the plane crash part? Or both?
You’d be hard pressed to find people who think of airplane crashes as anything but the cold hard triumph of gravity over some hulking contraption, but frankly there’s a certain mystique to some of them. Not a morbid, bloody mystique, but something romantic. Don’t miss the point, as none of this, of course, means a damn thing to the people who are unlucky enough to be killed, or their loved ones. It’s not the violence that makes the difference — the ascending G-forces or the body count. The mystique is a contextual thing — the event as a whole, and as we come to see it in retrospect. Not just plane crashes, but all disasters. If the Titanic sinking hadn’t had a mystique, it wouldn’t have been a blockbuster love story 80 years later. A boat hits an iceberg and 1200 people die — and somehow we make a love story out of the wreckage?

Since overall number of fatalities is the standard measuring stick, one could argue the World Trade Center attacks deserve top billing, as indeed some on-line aviation sites have ranked them. However, the planes-as-weapons phenomenon changes things, and to include the twin tower implosions here would be a certain stretch, no less than a Cessna detonating a bomb over a crowded city could justify the subsequent body count as an “air disaster.” (A turboprop once plowed into a crowded market in Zaire killing over 300 people, only two of whom were aboard the airplane!) To level the field, perhaps we should remove all on-the-ground casualty figures from crash totals. This seems the fairest method by which to compare accidents, and is something everyone who compiles air safety data should consider in light of last year’s events. For now though I’ve retained any on-ground deaths in the following tallies. If you choose to further research any of this, please be wary of info you come across on the Internet. There are many sites that feature this material, with varying degrees of accuracy. * March 27, 1977. Two Boeing 747s, operated by KLM and Pan Am, collide on a foggy runway at Tenerife, in Spain’s Canary Islands killing 583 people. The KLM jet departed without permission and struck the Pan Am jet as it taxied along the same runway. Confusion over instructions and a blockage of radio transmissions contributed to the crash. * August 12, 1985. A Japan Air Lines 747 crashes near Mt. Fuji after takeoff from Tokyo on a domestic flight killing 520. The rupture of an aft bulkhead, which had undergone faulty repairs following a mishap seven years earlier, caused destruction of part of the airplane’s tail and rendered the jet uncontrollable. A JAL maintenance supervisor later committed suicide, while the president of the airline resigned, accepting full, formal responsibility for the crash and visiting victims’ families to offer a personal apology. * November 12, 1996. An Ilyushin IL-76 cargo plane from Kazakhstan collides in midair with a Saudia 747 near Delhi; all 349 aboard both planes are killed. The Kazakh crew had disobeyed instructions, and neither airplane was equipped with collision-avoidance technology. * March 3, 1974. In one of the most notorious and gruesome crashes ever, a THY (Turkish Airlines) DC-10 crashes near Orly airport killing all 346 passengers and crew. A poorly designed cargo door had burst from its latches, and the subsequent depressurization caused failure of the cabin floor and impairment of cables to the rudders and elevators. Out of control, the plane slammed into the woods northeast of Paris. McDonnell Douglas, maker of the DC-10, which would see even more controversy later, was forced to redesign its cargo door system. * June 23, 1985. A bomb planted by a Sikh extremist blows up an Air India 747 enroute between Toronto and Bombay (with stops in Montreal and London). The airplane fell into the sea east of Ireland killing 329. Investigators in Canada cited shortcomings in baggage screening procedures, screening equipment, and employee training. A second bomb, intended to blow up another Air India 747 on the same day, detonated prematurely in a luggage facility in Tokyo before being loaded aboard.

* August 19, 1980. A Saudia L-1011 bound for Karachi returns to Riyadh, Saudi Arabia, following an in-flight fire that broke out just after departure. For reasons never understood, the crew takes its time after a safe touchdown and rolls to the far end of the runway before finally stopping. No evacuation is commenced, and the airplane then sits with its engines running for more than three minutes. Before any doors can be opened by the inadequately-equipped rescue workers at Riyadh, all 301 people on the widebody die as the passenger cabin is consumed by a flash-fire. * July 3, 1988. An Airbus A300 operated by Iran Air is shot down over the Straits of Hormuz by the US Navy destroyer Vincennes. The crew of the Vincennes, distracted by an ongoing gunbattle, mistakes the A300 for a hostile military aircraft and destroys it with two surface-to-air missiles. None of the 290 occupants survived. * May 25, 1979. As an American Airlines DC-10 lifts from the runway at Chicago’s O’Hare airport, an engine detaches and seriously damages a wing. Before its crew can make sense of the situation, the airplane rolls 90 degrees and disintegrates in a huge fireball about a mile beyond the runway. With 273 fatalities, this remains the worst-ever crash on US soil. Both the engine pylon design and airline maintenance procedures were faulted by NTSB investigators, and all DC-10s were temporarily grounded. * December 21, 1988. Two Libyan agents are later held responsible (one is convicted) for planting a bomb aboard Pan American flight 103, which blows up in the night sky over Lockerbie, Scotland killing 270 people, including 11 on the ground. * September 1, 1983. Korean Air Lines flight KL007, a 747 carrying 269 passengers and crew from New York to Seoul (with a technical stop in Anchorage) is shot down by a Soviet fighter after drifting off course — and into Soviet airspace — near Sakhalin Island in the North Pacific. The International Civil Aviation Organization (ICAO) later attributes the mysterious deviation to “A considerable degree of lack of alertness and attentiveness on the part of the flight crew.”

SWOT ANALYSIS

Strengths:
1. Growing tourism: Due to growth in tourism, there has been an increase in number of the international and domestic passengers. The estimated growth of domestic passenger segment is at 50% per annum and growth for international passenger segment is 25%
2. Rising income levels: Due to the rise in income levels, the disposable income is also higher which are expected to enhance the number of flyers.

Weaknesses:
1.Under penetrated Market : The total passenger traffic was only 50 million as on 31st Dec 2005 amounting to only 0.05 trips per annum as compared to developed nations like United States have 2.02 trips per annum.
2. Untapped Air Cargo Market: Air cargo market has not yet been fully taped in the Indian markets and is expected that in the coming years large number of players will have dedicated fleets.
3. Infrastructural constraints: The infrastructure development has not kept pace with the growth in aviation services sector leading to a bottleneck. Huge investment requirement for physical infrastructure for airports.
Opportunities:
1. Expecting investments: investment of about US $30 billion will be made.
2. Expected Market Size: Average growth of aviation sector is about 25%-30% and the expected market size is projected to grow upto100 million by 2010.
Threats :
Huge investments are expected to take place in aviation sector in near future. It is estimated that by 2012.
1. Shortage of trained Pilots: There is a shortage of trained pilots, co-pilots and ground staff which is severely limiting growth prospects.
2. Shortage of Airports: There is a shortage of airport facilities, parking bays,air traffic control facilities and takeoff and landing slots.
3. High prices: Though enough number of low cost carriers are already existing in the industry, majority of the population is still not able to fly to other destinations.

CASE STUDY
Indian Aviation: Price Wars & More
The case examines the marketing strategies adopted by players in commercial aviation industry in India in 2002. It provides details about the industry's evolution from a single-player monopolistic regime to its intensely competitive multi-player days in 2002. The marketing strategies adopted by the players, in terms of price-reduction, innovative customer service efforts and other promotional activities have also been explored. The case also debates the sustainability of the above strategies in the light of the fact that these were being seen essentially as short-run exercises by industry observers.
The months of July and August 2002 witnessed unprecedented development in the commercial aviation industry in India. For the first time in the history of the industry, efforts were made to make air-travel affordable for a larger section of the population. With air-travel fares being much higher than rail and road travel fares, the average Indian traveler rarely traveled by air. However, in these two months, the companies offering air-travel changed the market dynamics completely. The reason for the above was not very difficult to understand. Though there were only three major players in the Indian aviation market, namely Jet Airways (JA), Air Sahara (Sahara) and the state-owned Indian Airlines (IA), competition was getting fiercer by the day.
Thus, when JA launched its promotional campaign 'Everyone Can Fly' that offered special fares on select routes, industry observers commented that such a move was long overdue. Immediately, IA responded by launching its 'U Can Fly' scheme with similar conditions as that of 'Everyone Can Fly.' Thousands of seats were to be offered by both JA and IA between August 1 and October 31 at rates, which were comparable with rail fares. The special fares could be availed of booking at least three weeks in advance. Though JA claimed that its campaign was a move to commemorate the first flight of 'Wright Brothers' in 1902, there were few takers for this.
In August 2002, Sahara surprised its competitors and customers alike, by announcing the 'Steal a Seat' campaign. Beginning August 26, 2002, customers could bid for 10% of Sahara's unsold seats for as low as Re 1. However, customers would have to plan their journey 25 days in advance. They could bid for their destination online at a leading portal, www.indiatimes.com, or through phone, fax or e-mail. The 'Steal a Seat' scheme followed the already popular 'Sixer', 'Bid 'n' Win' marketing campaigns of the carrier.

As a result of these aggressive marketing strategies, fares continued to decline on a daily basis as compared to the 10% increase per annum in the past and sales increased. Airline companies seemed to be happy as it was much better to earn lesser revenues than fly planes with empty seats. However, some industry observers felt that companies took this decision out of desperation to increase the stagnating air-travel revenues. It was also being felt that they were nothing but short-term gimmicks as the companies would not be able to financially sustain these for long. Moreover, it would be irrational to expect travelers (especially those from the business class) to plan their travel 21 days in advance.
The history of Indian aviation industry's dates back to the early 1930s, when one of the leading Indian business houses, the Tatas set up the Tata Airlines. There was limited activity in the field over the next two decades despite eight more private companies entering the fray. In 1953, the Air Corporations Act 1953 came into force and all the assets of the then existing nine airline companies were transferred to two corporations - Indian Airlines Corp. (IA) and Air India International (Air India). While Air India offered international air services, IA offered domestic services. The Air Corporations Act 1953 prohibited any person or company to operate any scheduled air transport services from, to or across India.
Therefore, two corporations enjoyed a monopoly status in the scheduled air transport services market. In 1962, Air India International was renamed Air India Ltd. In 1986, private airlines were allowed to operate chartered and non-scheduled services under an 'Air Taxi'scheme. The scheme was introduced to boost tourism and augment domestic air services. The carriers were however, not allowed to publish time schedules or issue tickets to passengers. As the government owned both AI and IA, the Indian commercial aviation air transport services market was monopolistic in nature. Not surprisingly, the concept of marketing was virtually absent in the aviation industry.
The only advertising campaign ever run was AI that of which featured its mascot 'Maharaja', an elegant, plump little man, with a stylish turban and an impressive 'handlebar moustache.' Advertising and marketing activities started only after the Indian skies were opened for private players. Initially, advertisements by the new players were limited to the print and electronic media. However, with the entry of new players in the 1990s, competition began to intensify. IA also expanded its domestic network and started foraying into international market.
Industry observers remarked that the most interesting feature of the price war in 2002 was that Sahara, the smallest of the Big Three, was the most aggressive. Apart from launching the novel bid schemes, it also offered the highest agent commissions to increase volumes of the tickets sold, while maintaining the lowest fares. Analysts felt that this was because it had the smallest capacity among the three. However, Sahara increased its capacity in late 2001 and planned to lease about 6 additional Boeing 737s towards the end of 2002.

Issues:
» Understand the changing environment of the Indian aviation industry and the evolution of the three major players - Indian Airlines, Jet Airways and Sahara.

CONCLUSION
The Indian aviation sector has witnessed tremendous growth in the recent years driven by a combination of macroeconomic; demographic; government reforms and market lead dynamics. Ever since 2003, growth had witnessed tremendous increase post arrival of LCC’s. Hence if the current growth trajectory is to be preserved, it is very important that competitive forces must continue to operate in the system. There are some factors intrinsic to the aviation industry that are anti-competitive. For example: Frequent Flier Programs which airlines use to discriminate between the leisure travelers and business travelers. The business class is a huge attraction for the FSC as they have very low price elasticity of demand, which the carriers want to capitalize on. Similarly other loyalty programs include Travel Agent Incentive Schemes where by the commission given to the travel agents are tied to the sales of that Carrier.
Price transparency in the system of fare declaration is both a boon as well as a bane. A bane as it enhances chances of collusion. Parties entering in a collusion find it easy to ensure cooperation as the follower will implement the price increase only after seeing the leader make the agreed changes. If any one deviates then the other airline can at a very short notice revert back to the original prices without bearing much cost. So it’s a win –win situation. Slot constraint is another problem constraining new entry. Landing & take off rights are referred to as Slots. These slots are an important consideration for an entrant as peak timed slots register higher passenger load factors as compared to the oddly timed slots. The capacity of airports is fixed. The supply of airports cannot be immediately increased in face of rising demand, hence arises scarcity of infrastructure.
There are some regulatory barriers inherent in our domestic air transport policy are constraining new entry & having anti-competitive effects. The regulations governing minimum fleet size; minimum equity requirements; route dispersal guidelines; min fleet & experience requirement of 5 years for International Operations; exclusive right to National carriers to fly to Gulf Routes etc are constraining new entry & strengthening incumbents’ position.
The year 2007 was the year of M&A in the Indian Skies. Post consolidation IA-AI; Jet-Sahara ; Kingfisher-Deccan, these top three players have pocketed 80% of Market Shares .While the industry sources favored these mergers as they believe that these mergers will benefit the already bleeding Industry . It’ll help to bring in some route; network & fleet rationalization. The merged entities are expected to benefit from joint operations & would share synergies of joint operations. The network served is highly duplicative i.e. few metropolitan cities being dangerously over served. The consolidation according to Industry sources would help to bring in some rationalization in routes & help carriers focus on other routes. However, equally justified are the consumer groups who are fearing that post consolidation prices may rise. The frenzy among consumer groups was more in case of Kingfisher – Deccan Deal as Deccan initiated the low fare war. With its consummation, consumers fear a price rise may soon be on cards.
All three M&A very well come under the lens of the Competition Commission of India’s lens as they meet the benchmarks standards laid down by the Competition Act, 2002 with regard to Regulations of M&A. As far as IA-AI Merger is concerned it doesn’t pose much problem from competition angle as the merging entities have complementary networks with AI having International presence with negligible domestic presence and IA having heavy domestic presence with negligible international presence. However, the exclusive rights to fly to Gulf routes are unfair as its depriving Competition Issues in the Civil Aviation Sector the other domestic players from an important source of revenue. Consumers too don’t have much option w.r.t. mode of transportation & the choice of the carrier.

REFERENCE

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