crisis in indian aviation (1)

7/31/2019 Crisis in Indian Aviation (1)

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Air transportation is the quickest, modern,and latest mode of transport

Huge potential

Under penetrated market Total Passenger Traffic : 50 Million

Passenger trips Per Annum:

India:0.05

United States: 2.02

Untapped air cargo market.


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1912

1st domestic air route in between Delhi and

Karachi under Indian State Air services along

with Imperial Airways,UK

1915

Tata Sons Ltd, the 1st Indian airline started

airmail services between Madras and Karachi

1948

the Government of India along with Air India

(Tata Airline) established the Air India

International Ltd.


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1953

Indian Government nationalized all the airline assets existing

then and thereby formed the Indian Airline Corporation and

Air India International for domestic and international air

service respectively

1993 Rajiv Gandhi Contemplated the open skies policy

1994

End of monopoly of IA and AI in the air transport services Air Corporations (Transfer of Undertaking and Repeal) Act,

1994


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1995

Several private airlines had ventured into the aviation business

and accounted for more than 10 percent of the domestic air

traffic

1996 Private air taxi operators carried 49.08 lakh passengers which

amounted to a 41.14 per cent share in the domestic air passenger

traffic

2003 budget flying trend introduced by Spice Jet, Kingfisher Air, Go

Airways and Paramount Airways


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The Domestic Aviation Market Share

34%

20%

21%

8%8%

6%

2%

1%

Jet airways

IndianAir Deccan

Air Sahara

Kingfisher

Spicejet

Goair

Others


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S


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W


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Cause of Crisis


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Indias National Carrier :- Theflagship of the Nation or the flagship

of the crisis ???


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Annual Losses Rs. 5000 crore

Total Debt Rs. 16,000 crore

10 % of total global losses

.35 % Global Traffic


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Highly overstaffed 200:1 employees toaircraft

Annual wage bill Rs. 3000 crore

Corporate buildings in posh areasunnecessarily

Stalled merger of Air India and Indian Airlines

Political Bureaucracy


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Probe into managements decisions on aircraft selectionand leasing and acquisition. Probe into "gifting of bilateral rights" to foreign air-

carriers and the so-called open-sky policy. [indirectlyaimed at the massive growth of Emirates in India]

Probe in to the reckless sale and transfer of Air India and

Indian Airlines land assets in Kalina and Sahar (Mumbai) toprivate developer, Mumbai International Airport Limited,on a platter for construction of 5-star hotels and offices inthe name of airport development.

Probe into payment of arrears to senior engineeringexecutives just ten days before the announcement of

deferment of salaries to staff. Direct intervention by the Prime Minister and a thorough

probe by a Joint Parliamentary Committee (JPC) in Air Indiaaffairs


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Loss of over Rs. 1000 crore for threeconsecutive years

Total debt exceeds Rs. 7000 crore


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Delayed

Salary

Fuel Dues


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Service tax

Bank arrears


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Spicejet losses Rs. 240 crore Air Deccan Already taken over by Kingfisher

IndiGo the only company making profits.


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DGCA reports- Kingfisher and Air India notmeeting standards of safety requirements

IndiGo- also in same class as the above twoeven though they have managed to makeprofits.

Report not conducive for airlines as it createsdoubts in the mind of potential customers


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Existing models useless; need to develop newmodel

Govt. to be helpful

Foreign Investment

Smart and Innovative decision making

Simplest solutions often the best one


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crisis in indian aviation (1)

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