Mumbai: the Domestic Airline Industry Is Emerging As a Lucrative Option for Foreign and Local Financial Investors
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Mumbai: The domestic airline industry is emerging as a lucrative option for foreign and local financial investors. On the inaugural day of the first-ever Investor Summit for India and Middle East organised by the Centre of Asia Pacific Aviation (CAPA) in Mumbai, this was the common sentiment that emerged from the conclave. Kapil Kaul, chief executive officer, Indian sub continent and Middle East, CAPA, said: “Two years ago, investors were not even considering looking at Indian aviation, in the last two years, not only Indian entrepreneurs have turned serious about aviation business, but investors are seriously exploring the market for right investments.” According to Kaul, in 25 years, almost $50billion worth of investments is expected in the Indian aviation industry. Till 2004, India had only 190 aircraft and now the number is expected to touch 450-500 by 2010, now it may be even more post the Indian bookings at the Paris Air show. Athar Shahab, director- business development, IDFC, said their company, which has been tracking the transportation sector in the country, was keenly watching the developments of the airline industry. Shahab pointed out airline companies should tap the local market for loans giving the rising rupee. India liberalizes aviation sector -PTI NEW DELHI: Opening of the skies to foreign and private domestic airlines and liberalization of the entire aviation sector in the country will mark the New Year, as the government worked through 2003 to unveil a revolutionary Civil Aviation Policy next month to enhance competition and make flying easier and cheaper. These major initiatives were watershed developments in India’s aviation history this year when the world celebrated the centenary of man taking to the sky. Even as a high-level Committee appointed by the Civil Aviation Ministry submitted a roadmap for the aviation sector for the next decade, the government this month decided to allow private domestic carriers to fly to SAARC countries, including Pakistan, and give freer access to airlines from SAARC and the ASEAN nations to Indian destinations. India and Pakistan also decided to resume from January bilateral aviation links, which were snapped following the terrorist attack on Parliament on December 13, 2001. The path-breaking offer to the airlines of the ASEAN nations to fly into four Indian metros and 18 major tourist destinations without any restriction was made by Prime Minister Atal Bihari Vajpayee at the India-ASEAN summit in Bali, Indonesia. During the year, the Ministry saw Shahnawaz Hussain passing on the mantle to Rajiv Pratap Rudy, though in the process the Civil Aviation portfolio was downgraded from the Cabinet rank to the Minister of State status. There was not much forward movement on the implementation of the government’s budget promise of starting work on privatizing and modernizing the airports at Mumbai and Delhi. In fact, after short-listing three bidders for the job of financial consultant to oversee the privatization process, an empowered Group of Minister (GoM) decided to go in for a re-bid. The year that passed by also did not see much progress in the fleet acquisition programs of Indian Airlines (IA) and Air India (AI). While the domestic carrier’s plans to acquire 43 aircraft at a cost of over Rs 100 billion went through two meetings of pre-Public Investment Board, Air India Board was yet to submit its proposal to the government to buy 28 planes at a cost of Rs 105.89 billion. The only positive note on the fleet expansion front was the induction of four turboprop 50-seater ATR-42-320 aircraft for IA subsidiary Alliance Air’s operations in the northeast, with an annual financial assistance of Rs 350 million from Department of Development of the Northeast Region Pak PM sets terms to allow Indian private airlines London: Pakistan Prime Minister Shaukat Aziz has said that he was ready to allow Indian private airlines fly into his country, but it would happen only after New Delhi gives satisfactory reply to his three suggestions namely - opening of banks in each other's country, increase of air flights and Srinagar-Muzaffarabad bus service, and the gas pipeline project. Aziz said that he expected to elicit New Delhi's response on the above three suggestions, which he had also mentioned during his last visit to India, when he meets his Indian counterpart Dr Manmohan Singh during the SAARC Summit in Dhaka next month. According to The News, Aziz said this in Davos where he has gone to attend the World Economic Forum. Speaking at a breakfast meeting with international media, he said that his government was keen to resolve all the outstanding issues with India in tandem with the question of Jammu and Kashmir. - Jan 31, 2005 India, US renew their agreements on aviation sector (Go To Top) by Priscilla Huff Washington: India and US have renewed their agreements in the aviation sector, giving a boost to the trade relationship between the two countries. Civil Aviation Minister Praful Patel signed the updated agreements with US Transportation Secretary Norman Mineta in Washington DC. "And so the time has come where we must renew this agreement according to the needs of the hour, and as you rightly pointed out, it would be the relationship between the United States and India, growing stronger and stronger with the trade and commerce and tourism increasing by a great degree between these two countries. It is but natural that we have a new agreement on air transport at the earliest," Patel said. India and the US have been using an agreement on aviation relations that dates back to 1956. Currently, about two million people travel between the United States and India each year. Much of that traffic and business goes to third parties, such as European or Middle Eastern carriers. Mineta said that an "open sky" agreement would enable the two countries to expand cargo services. "And I would welcome seeing non-stop service commenced between our two countries. Now, while air cargo between the United States and India is also experiencing strong growth, an "open skies" agreement would enable an even greater expansion of cargo services. Above all, we need to create the conditions to allow our airlines to provide consumers with more options and better prices," he said. The US has an "open skies" agreements with 66 countries, having inked about a dozen of them during the Bush administration. The US "open skies" agreements permit unrestricted service by the airlines from each nation, without restriction on destinations, schedule, or prices. "Open skies" agreements are intended towards making business in the aviation sector much easier. However, several US carriers are in serious economic trouble, with some analysts predicting US Airways to go out of business, even as Delta, United and American struggle with a price war and labour costs. Patel said more investment in the aviation sector would bring more business for both the countries. "We do appreciate the fact that aviation infrastructure will be the engine for growth for aviation in India. And with this large investment in aviation expected in the years to come, it would be the fitness of things where the United States and India can work closely in a variety of areas," he said. Patel said that aviation investment had been a top priority of the new Congress-led government. "India's aviation investment in terms of aircraft acquisition would be of a very high proportion because, we have in the recent past, opened up the sector for private players also. It has been unshackled, it has been very highly restricted until just a few months ago," he said. Patel also discussed with Mineta how many airports in India are already preparing for major renovations and predicted that Indian carriers would be purchasing 200-250 planes, probably part of it from US manufacturer Boeing in the next three to five years. Meanwhile, Mineta called for more revenue opportunities for the American airlines. "Well, I wouldn't characterize it as banging down our doors but when you look at the financial condition of our airlines, they are looking for increased revenue opportunities. And not only are revenue opportunities more attractive in the international marketplace, the margins in terms of what they make from their international operations is much greater than from their domestic," said Mineta. Under the new agreement there will be no restrictions on the frequency, destinations and aircraft, carriers can fly. At present, only Air India flies direct flights to and from New York and Chicago. -Jan 14, 2005 In 1953, a new dream took shape - to airlink the vast South Asian subcontinent by a single, modern and efficient airline. The airline was Indian Airlines. Today, Indian Airlines, together with its fully owned subsidiary Alliance Air, is one of the largest regional airline systems in Asia with a fleet of 62 aircraft(4 wide bodied Airbus A300s, 41 fly-by-wire Airbus A320s, 11 Boeing 737s, 2 Dornier D-228 aircraft and 4 ATR-42). Indian Airlines has been setting the standards for civil aviation in India since its inception in 1953. It has many firsts to its credit, including introduction of the wide- bodied A300 aircraft on the domestic network, the fly-by-wire A320,Domestic Shuttle Service, Walk-in Flights and Flexi-fares. Its unique orange and white logo emblazoned on the tails of all its aircraft is perhaps the most widely recognised Indian brand symbol that has over the years become synonymous with service, efficiency and reliability. The airlines network spans from Kuwait in the west to Singapore in the East and covers 75 destinations - 57 within India and 20 abroad.