Aviation Industry in India
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Aviation BUSINESS ANAYISIS AND PRESENTAION TOPIC: - AVIATION INDUSTRY IN INDIA SUBMITED TO: - Prof. S K Biswal Date of Presentation:-15thMarch, 2014 SUBMITTED BY:-Group no – 20 Amit Kumar Singh - 1306260035 Pooja Singh - 1306260020 Rourkela Institute of Management Studies, Rourkela 0 Aviation MBA 1st year (2nd SEM) Rourkela Institute of Management Studies, Rourkela 1 Aviation ACKNOWLEDGEMENT I have made lot of efforts to make this project. However, it would not have been possible without the kind support and help of many individuals who helped me in completing this project report i would like to extend my sincere thanks to all of them. I would like to thank our faculty Prof: S.K BISWAL for his guidance and help to complete my project. I would also like to thank my friends and family for their co-operation and encouragement which help me in completing this project. Rourkela Institute of Management Studies, Rourkela 2 Aviation Executive Summary India is one of the fastest growing aviation markets in the world. With the liberalization of the Indian aviation sector, the industry had witnessed a transformation with the entry of the privately owned full service airlines and low cost carriers. The sector has seen a significant increase in number of domestic air travel passengers. Some of the factors that have resulted in higher demand for air transport in India include the growing middle class and its purchasing power, low airfares offered by low cost carriers, the growth of the tourism industry in India, increasing outbound travel from India, and the overall economic growth of india. Rourkela Institute of Management Studies, Rourkela 3 Aviation CONTENTS Chapters Page no.. 1. Chapter 1:- a. Introduction & History of Aviation— 06 - 12 b. List of Operational Airlines in India--- 13 - 14 c. ICAO & IATA— 15 - 16 d. Major Payers in Aviation industry in India-- 17 2. Chapter 2:- COMPANY PROFILE a. Jet Airways --- 19- 28 b. Air India --- 29 - 40 c. Spice Jet --- 41 - 46 3. Chapter 3:-Financial Report a. Jet Airways-- 47 – 52 b. Air India-- 53 – 56 c. SpiceJet-- 57 – 59 4. Market Share of Aviation -- 60 – 62 5. Future of Aviation Industry in India -- 63 6. Conclusions-- 64 7. Bibliography--- 65 Rourkela Institute of Management Studies, Rourkela 4 Aviation CHAPTER -1 Rourkela Institute of Management Studies, Rourkela 5 Aviation Introduction of Aviation:- Once upon a time people were started to travel by feet, then to cross the ocean they built ship, after that the train is innovated. Then the dreams to fly become true. To save time and for a hassle free a journey aircraft was innovated. Today this industry gives us comfortable, safe, and secure and hassle free easiest travel experience within few hours from one destination to another. So this industry is the new passion for the people to travel, according to their needs and their choice and satisfy them in exchange of money. WHAT IS AVIATION? An aviation industry is defined as an industry that has aircraft manufacturers, airlines, vendors, training centers and training device manufacturers. It is an airline industry that provides air travel services for freight and travelling passengers. The Origin of Aviation • The first commercial flight in India was made on February 18, 1911, when a French pilot Monseigneur Piguet flew airmails from Allahabad to Naini, covering a distance of about 10 km in as many minutes. • Tata Services became Tata Airlines and then Air-India and spread its wings as Air-India International. The domestic aviation scene, however, was chaotic. When the American Tenth Air Force in India disposed of its planes at throwaway prices, 11 domestic airlines sprang up, scrambling for traffic that could sustain only two or three. In 1953, the government nationalized the airlines, merged them, and created Indian Airlines. For the next 25 years JRD Tata remained the chairman of Air-India and a director on the board of Indian Airlines. After JRD left, voracious unions mushroomed, spawned on the pork barrel jobs created by politicians. In 1999, A-I had 700 employees per plane; today it has 474 whereas other airlines have 350. Rourkela Institute of Management Studies, Rourkela 6 Aviation • For many years in India air travel was perceived to be an elitist activity. This view arose from the “Maharajah” syndrome where, due to the prohibitive cost of air travel, the only people who could afford it were the rich and powerful. • In recent years, however, this image of Civil Aviation has undergone a change and aviation is now viewed in a different light - as an essential link not only for international travel and trade but also for providing connectivity to different parts of the country. Aviation is, by its very nature, a critical part of the infrastructure of the country and has important ramifications for the development of tourism and trade, the opening up of inaccessible areas of the country and for providing stimulus to business activity and economic growth. • Until less than a decade ago, all aspects of aviation were firmly controlled by the Government. In the early fifties, all airlines operating in the country were merged into either Indian Airlines or Air India and, by virtue of the Air Corporations Act, 1953; this monopoly was perpetuated for the next forty years. The Directorate General of Civil Aviation controlled every aspect of flying including granting flying licenses, pilots, certifying aircrafts for flight and issuing all rules and procedures governing Indian airports and airspace. Finally, the Airports Authority of India was entrusted with the responsibility of managing all national and international air ports and administering every aspect of air transport operation through the Air Traffic Control. With the opening up of the Indian economy in the early Nineties, aviation saw some important changes. Most importantly, the Air Corporation Act was repealed to end the monopoly of the public sector and private airlines were reintroduced. Brief Introduction Indian Aviation Industry has been one of the fastest-growing aviation industries in the world with private airlines accounting for more than 75 % of the sector of the domestic aviation market. With a compound annual growth rate (CAGR) of 18 % and 454 airports and airstrips in place in the country, of which 16 are designated as international airports, it has been stated that the aviation sector will witness revival by 2011. Rourkela Institute of Management Studies, Rourkela 7 Aviation In 2009 with increase in traffic movement and increase in revenues by almost US$ 21.4 million, the Airports Authority of India seems set to accrue better margins in 2009-10, as per the latest estimates released by the Ministry of Civil Aviation. This is being primarily attributed because of the increase in the share of revenue from Delhi International Airport Limited (DIAL) and Mumbai International Airport Limited (MIAL). Passengers carried by Indian domestic airlines from January-February 2010 stood at 8,056,000 as against 6,761,000 in the corresponding period of 2009-a growth of 19.2 %, according to a report released by the Ministry of Civil Aviation. Today Hyderabad International Airport has been ranked amongst the world's top five in the annual Airport Service Quality (ASQ) passenger survey along with airports at Seoul, Singapore, Hong Kong and Beijing. This airport in Hyderabad is managed by a public- private joint venture consisting of the GMR Group, Malaysia Airports Holdings Berhad and both the State Government of Andhra Pradesh and the Airports Authority of India (AAI). The Indian aviation sector can be broadly divided into the following main categories: 1. Scheduled air transport service includes domestic and international airlines. 2. Non-scheduled air transport service consists of charter operators and air taxi operators. 3. Air cargo service, which includes air transportation of cargo and mail. Rourkela Institute of Management Studies, Rourkela 8 Aviation It is an air transport service undertaken between two or more places and operated according to a published timetable. It includes: 1. Domestic airlines, which provide scheduled flights within India and to select international destinations. Air Deccan, Spice Jet, Kingfisher Airline and IndiGo are some of the domestic players in the industry. 2. International airlines operate from scheduled international air services to and from India. Non-scheduled air transport service : It is an air transport service other than the scheduled one and may be on charter basis and/or non-scheduled basis. The operator is not permitted to publish time schedule and issue tickets to passengers. Air cargo services : It is an air transportation of cargo and mail. It may be on scheduled or non-scheduled basis. These operations are to destinations within India. For operation outside India, the operator has to take specific permission of Directorate General of Civil Aviation demonstrating his capacity for conducting such an operation. Size of the Industry India is one of the fastest growing aviation markets in the world. A total of 127 airports in the country, which include 13 international airports, 7 custom airports, 80 domestic airports and 28 civil enclaves are managed by The Airport Authority of India (AAI). There are about 450 airports and 1091 registered aircrafts in India today. Rourkela Institute of Management Studies, Rourkela 9 Aviation Top Leading Companies Players in Indian aviation industry can be classified into three groups: Public players Private players Startup players There are three public players: Air India, Indian Airlines and Alliance Air. The private players include Jet Airways, Air Sahara, Paramount airways, Go Air Airlines, Kingfisher Airlines, Spice Jet, Air Deccan and many more. The startup players is those which are planning to enter into the markets. Some of them are AirAsia, Omega Air, Magic Air, Premier Star Air and MDLR Airlines. Employment opportunities Today India Aviation Industry requires approximately 7,500- 8,000 pilots and an equal number or more air cabin crew by 2010.