Course TitleBTEC HNC in Aviation, Hospitality and Travel

Management

AssignmentAviation Industry

Learner’s Name Assessor’s NameRavindra Verma Mr. Amol

MinawalaBatch:- D-3Place:- Indore (M.P.)

Task 1(a). Explain how the following key factors have effected the development of the Aviation Industry:• Low Cost Airlines• Increased number of domestic airlines• India’s improving economy

The Indian Aviation Industry

Aviation Industry in India came on the track in 1912, with first flight from Karachi to Delhi started by Collaboration of Indian State Air Services & Imperial Airways, UK. Actually it was just an extension of the London-Karachi flight by Imperial Airways.

However actual Indian Aviation Industry started by Mr. JRD Tata in 1942. He was also the first Indian who got an A-License. In 1946, Tata Airlines was transformed into Air India. At the initially of independence, India had 9 air transport companies providing cargo & passenger services both.

The Indian Government nationalized all existing airlines and formed a domestic airline named Indian Airline Corporation for domestic air services along with Air India International airline. These two companies had acquired all Indian Aviation Industry till 1991. In the same year private airlines got the permission of “Air Taxi Scheme”. And in 1994 private airlines got the permission to operate scheduled air services.Mr. JRD Tata is known as the Father of The Indian Aviation

Industry.

A major change came in Indian Aviation Industry in 2003, when Air Deccan inaugurated budget flying with 17% low fare than other airlines fares. Now this list includes Spice Jet, Go Airways and Kingfisher Red & many more.

Air India Indian Airlines Air-India Express Kingfisher Airlines Kingfisher Red Jet Lite MDLR Airlines SpiceJet

Major Indian Airline Operators:

GoAir Jet Airways Blue Dart Aviation Paramount Airways Jagson Airlines Air India Regional IndiGo Airlines

Today more than 35 Air companies are the part of the Indian Aviation industry.

Effect of LCC’s & Increased Number of domestic Airlines on Aviation

IndustryThe domestic passenger and cargo traffic recorded a

growth rate of 44.6% and 8.7%.

In December 2006, the airports handled 9.48 million passengers including 6.93 million domestic and 2.54 million international passengers, whereas during the same month in the preceding year it was 7.24 million passengers including 4.99 million domestic and 2.25 million international passengers.

India has a population of 1.1 billion of which the middle income group constitutes around 400 million. 15 million people travel by train of which around 700,000 people travel in air condition (AC) coaches. There does not exist much price difference between travel by AC and travel by LCC.

LCC’s business in India is growing at almost 41 per cent annually, the LCC’s have captured one third of the total market, according to CNN-IBN.

Within 3 years of operations in India, LCC’s have taken the domestic market share of 49%. And now it has covered 75% of the domestic aviation market.

According to a survey the 40% passengers which are travelling by air were first time flyers.

Domestic Air Travelers

MonthPassengers ( i n m i l l i ons )

2009

January 3.33

2008

December 3.32

November 3.04

October 3.13

September 2.68

August 2.92

July 3.05

June 3.51

May 4.12

2007

December 4.01

Airline Domestic Passengers

Ai r l inePassengers( in thousands)

2009 January

Air India 555

Go Air 81

IndiGo 457

Jet Airways 596

JetLite 241

Kingfisher 919

MDLR 13

Paramount 71

SpiceJet 393

“Low cost airlines put the crunch on biggest carriers,” The Wall Street Journal, U.S.A., June 19, 2002

India’s Improved Economy by Aviation Industry

Indian economy has over the past five decades grown from primarily agrarian economy into a service sector dominated economy. The present macro economic forecast is of 6-8% GDP (Gross Domestic Product) growth rate over the coming years. India is fourth largest economy in the world in terms of purchasing power parity. The growth of service sector, essentially led by the Indian expertise in Information Technology. This is the fact that the country has almost 300 million strong middle-class, has expanded the air transport market considerably.

If the present growth trend can be sustained, civil aviation will become the vehicle for take off for the Indian economy in the coming decade. It is around this time that the Indian economy is expected to acquire a size comparable to the Chinese economy. Therefore, if the present trend continues, India should have no difficulty in matching or even outperforming China as a preferred destination for aviation and tourism.

Air India’s revenues for cargo services have increased from Rs.4000 crores to Rs.6000 crores in 2005-06.

This year, the International Air Transport Association (IATA) is expecting India to act as a major force backing the civil aviation business of the world.

The Airports Authority of India (AAI) is planning to earmark around Rs12,434 crore for the process of modernization a number of airports in the country. The Indian Civil Aviation Ministry has set itself a target of getting around 500 airports operational by 2020, which would include the redevelopment of currently unused airports. It would develop Greenfield airports, and also establish 'merchant' airports dedicated to the movement of cargo and logistics. The economic landscape is set to change with the developing aviation infrastructure.

Besides reducing passenger and freight travel times, the economic benefits of the industry's ability to move inland and leverage lower cost land and labour would ensure higher profitability and return on capital.

Leveling this playing field, aviation infrastructure would also have multiple benefits for India's manufacturing sector, as goods would move faster via the cargo and logistics hubs to domestic and international destinations.

In the coming years, the demand for India's business or private jets is expected to increase by 50 % annually.

India is able to attain its double digit economic growth potential.

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