OVERVIEW OF INFRASTRUCTURE & AVIATION IN INDIA

SUBMITTED TO:Prof. SHALINI TANEJA

SUBMITTED BY:VARUN KABARIA - 221061NIKITA KHANDUJA - 221077NITISH BAWEJA - 221080PANKHURI MAHAJAN - 221086PRABHAT TANEJA - 221090RANJEEV DUTTA - 221115

•PRE-COLONIAL PERIOD (Upto 17t

h century)

•BRITISH RULE

•POST-INDEPENDENCE

INDIA’s ECONOMIC HISTORY DIVIDED INTO 3 Eras

PRE-COLONIAL

Indus valley civilization flourished between 2800 B.C. and 1800 B.C.

Evidence of well planned Streets, Drainage systems and water supply

Indicative of their knowledge and understanding of Urban Planning

This included world’s first Urban Sanitation system

Infrastructure development explicitly recognized during Emperor Sher

Shah’s rule (1540-1545)

The famous Grand Trunk Road linking the East and West extremities

of India was completed during this period

Other major irrigation and road projects were undertaken during his

regime

DEVELOPMENT DURING BRITISH RULE

British rule brought with it major developments like

Railways

Telegraph

Though, these contributed strictly and largely to their colonial expansion

Such an infrastructure laid foundation to India’s development story beginning in

1947

POST-INDEPENDENCE

The planning commission broadly defines Infrastructure

development as Transport and Telecommunications development

Thus it includes the following:

Roads & Road Transport

Railways

Shipping

Ports

Civil aviation

Communications & Broadcasting

Budgetary provisions for Infrastructure Development

• The Union Budget 2012-13 stated that investment in infrastructure is to go up to Rs 50 lakh crores with half of the total investment expected from private sector.

• More sectors proposed to be added as eligible sectors for Viability Gap Funding under the scheme- Support to PPP in infrastructure

• Tax free bonds of Rs 60000 crore to be allowed for financing infrastructure projects in 2012-13.

• The Union Budget announced harmonised master list of infrastructure sector approved by the Government.

• National Manufacturing Policy announced with the objective of raising the share of manufacturing in GDP to 25 per cent and creating of 10 crore jobs.

• Coal India Limited was advised to sign fuel supply agreements with power plants, having long-term PPAs with DISCOMs and getting commissioned on or before 31 March 2015.

• External Commercial Borrowings (ECB) to be allowed to part finance Rupee debt of existing power projects

Transport: Roads and Civil Aviation

The Union Budget 2012-13

The Union Budget 2012-13 proposed an increase of allocation of the Road Transport and Highways Ministry by 14 per cent to Rs 25360 crore . ECB proposed to be allowed for capital expenditure on the maintenance and operations of toll systems for roads and highways, if they are part of original project.

The budget permitted direct import of Aviation Turbine Fuel for Indian carriers.

The budget also stated that the ECB is to be permitted for working capital requirement of airline industry for one year subject to a total ceiling of US $ 1 billion. Proposal to allow foreign airlines to participate upto 49 per cent in the equity of an air transport undertaking under active consideration of the government was also made.

“Expanding investment in

infrastructure can play an

important counter cyclical role.

Projects and programmes [are] to

be reviewed in the area of

infrastructure development,

including pure public private

partnerships, to ensure that their

implementation is expedited and

does not suffer from [the] fund

crunch.”Mr. Manmohan Singh, Indian Prime Minister,

ROADS NETWORK OF ROADS IN INDIA - 33.2 lakh km. On the basis of nature & surfacing - 1.Metalled (pucca)- 57% 2. Unmetalled (kuchcha) -43%

On the basis of construction & maintenance – (a.) Golden Quadrilateral Super Highway : (i) NHDP Phase- I :- 5,846 km., six lane, CONNECTING-Delhi ,Mumbai, Chennai and Kolkata (ii) NHDP Phase- II :- 7300 km. * NS Corridors – Srinagar to Kanyakumari * EW Corridors – Silchar(Assam) to Porbandar(Gujarat) (iii) Port connectivity and other projects - 1,157 km. (iv) NHDP Phase – III:- 4,015km., 4 lane ,-National Highway Authority of India (NHAI) is the implementing agency for NHDP programme.-NHAI is implement 4 laning of 603km. Special Accelerated Road Development Programme in the

North Eastern Region (SARDP-NE) ,

-(b.) NATIONAL HIGHWAYS -- As on March 31,2006 - 65,569 km. 2% of the total length of the road network CPWD constructs and maintains National Highways. 35%-single lane, 53%-2lane & 12%-4 lane or more.

(c.) STATE HIGHWAYS -- 1.28 lakh km. 97%of the length of state highway is metalled.

The State Highways are constructed and maintained by State Government.

(d.) DISTRICTS ROADS – 4,70,000 km. Districts authorities constructs and maintain the District Roads

(e.) OTHER ROADS - mostly kuchcha roads, 26,50,000 km.

(f.) BORDER ROADS - Border Road Development Board , World’s highest Roads from Manali (H.P.) to Leh of Ladakh (J&K)ROAD DENSITY - The lowest density – 10 km.per 100 sq.km in J.&K. The highest density – 375 km.per 100 sq.km. in Kerala The national average of road density – 75 km. per 100 sq. km.

Private Travel Demand Rising in Delhi

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4000000

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NO

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F V

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As of June 30th 2009 more than 6.0 million vehicles were registered in Delhi, equivalent to the total number in Kolkata, Mumbai and Chennai.

Two Wheelers

Car/ Taxis

Buses and Heavy

VehiclesTSR

Source: Transport Department, GNCTD

Traffic Condition in Delhi

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Cars and two-wheelers together drive less than 20% of its people -- and yet roads are choked. (Source: CSE)

Courtesy: Flickers

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Traditional Problem Solving

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The Car Oriented Infrastructure

• Population per sq. km in Delhi is less compared to other cities like Hong Kong, Seoul and Paris (City) which are more densely populated.

• Road space as percentage of total land area is 21% in Delhi.– Present road length- 28,000 Kms

with limited expansion possibilities.

30,100

24,500 24,448

13,930

9,340 10,400

Hong Kong Seoul Paris (City) Delhi (Urban) Delhi (Whole) Tokyo

21%

13% 13%12%

11% 11%

Delhi Tokyo Munich Hong Kong Paris Bangkok

Road Space as Percentage of Total Area

Delhi is developing urban sprawl

Delhi Vs. Other World Cities

World Cities - Population per sq. km.

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Corridor Identification

GNCTD commissioned study in 2005 which identified 43 corridors (575 km) with Peak Hour Peak Direction Traffic (PHPDT) exceeding 5,000, assuming the following exist:

―Metro Phase I & II―Ambedkar Nagar-Delhi Gate BRT―Phase I IRBT corridors (2 nos.)

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PHPDT Length (in Kms)

No. of Corridors Choice of Mode*

>25,000 93 4 Metro

20,000-25,000

57 4 Elevated LRT

15,000-20,000

131 8 At grade LRT

10,000-15,000

179 13 At grade BRT / Elevated Monorail

5,000-10,000 115 14 At grade BRT

Total 575 43

* Based on World Bank and other studies

Demand-wise Number and Length of Corridors

Transport Demand Forecast Study 2008

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• DIMTS, on behalf of Transport Department, commissioned “Transport Demand Forecast Study” in 2008.

– To develop a Transport Demand Forecast Model and Identification of a Road cum Public Transport Network to meet the city demand by 2021 & beyond.

– The study identified a total length of 583.4 kms for the development of different public transport systems:

• Choice of mode depends mainly on demand level on a corridor, capacity of the mode and the available Road/Right Of Way (ROW).

– Other considerations are the land-use along the corridor, the location of building lines, and the potential for increasing the ROW .

Metro 148.2 kms

BRT 394.9 kms

Mono Rail40.3 kms

BAKHTAWARPUR

KARAWAL NAGAR

CHILLA

RAJOKARI

KHAIRA

GOPALNAGAR

IBRAHIMPUR

NAJAFGARH

CHHAWLA

DILSHAD GARDEN

AIRPORT

ISBT

BADARPUR

TO GURGAON

DELHI BORDER (BAHADURGARH)

KANJHAWALA

BAWANA

TO NOIDA

ANAND VIHAR ISBT (TO VAISHALI)

GOKALPURI

MUKUNDPUR

ROHINI SEC-21

MUNDKA

DABRI MOD

DWARKA

JASOLA

AMBEDKAR NAGAR

VASANT KUNJ

MEHRAULIKAPASHERA

GULABIBAGH

IG STADIUM

DHAULAKUAN

CENTRAL SECTT

NARELA

RAJEEV CHOWK

KALINDI KUNJ

JASOLA

PUTHKHURD

ARJANGARH (TO GURGAON)

KONDALI

METRO

MONORAIL

BRT

INTERCHANGE

Recommended Integrated

Public Transport Network

Approximate Cost – Rs. 462.7 Billion

Progress to date

Mode Length (Kms) Budget (in Rs.)

Metro – Phase I 65.1 Kms Rs. 105. 7 billion

Metro – Phase II 128.0 Kms Rs. 190.0 billion*

BRT – First Corridor 14.5 Kms Rs. 2.0 billion

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* Inclusive of Civil work of Airport Express line.

Source: Delhi Metro

Investment focus on one mode of public transport and minor investment in other modes.

What is Smart Transportation System

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Automated Vehicle

Location System

Automated Fare

Collection System

Intelligent Signaling System

Parking Information

System

Real-Time Traffic

Information System

Real-time Monitoring

System

Interactive journey

planner for all modes

Car SharingCycle

SharingSystems

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Real-time Bus Information - BQS

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Real-time Bus Information - SMS

<TRAKO PIS Chirag Delhi>

419DN-2,

522UP-6,

419UP-7,

419ACUP-14,

423ACDN – 28 mins

Info by DIMTS

Mobile user needs to send simple message:

TRAKO<SPACE>PIS<SPACE>BUS STOP NAME

to 54545

(You will instantly receive a SMS response: Next Bus at Bus Stop

for Route Number expected in ‘X’ minutes)

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Real-time Bus Information - Online

www.dimts.in

Automated Fare Collection System

Delhi Government is also planning to create an Integrated Multi-Modal Ticketing system, comprising DTC, Private Buses and Delhi Metro.

DMRC System

COM

MU

NI C

ATIO

NS

CentralSystem(CCHS)

Wi-FI

Depot Computer System

Depot Computer System

DTC

Private BusesWi-FI

Delhi Transport Corporation

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Automatic Fare Collection System - Delhi

AFCS implemented on Dwarka Circular Sewa, inter-connecting key destinations in Dwarka sub-city such as metro stations, shopping centres, schools…………

The system is operational in 6 low-floor A/C buses.

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On-Demand Autorickshaw

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• Transport Department is planning to cover Autorickshaws and Taxis under the ambit of a Vehicle Tracking System.

• A separate call centre will be setup for booking and the despatch of autorickshaws.

• A similar service will be launched in other cities including Ahmedabad, Pune, Chandigarh and Chennai.

Transport Department, GNCTD will install GPS-based Vehicle Tracking System in all 55,000 auto rickshaw in the city and will establish a call-centre facility.

Railways

In 1947 rail network of about 53000 km Added only 11000 km of network in last 65

years Modifications like-

-Gauge changing-Electrification-Computerization-Double tracks

Investment Plan

Investment of Rs. 57630 cr the year 2011-12 for the development, highest ever by Indian railways in any financial year-Target of laying 1075 km of new lines in 2012-800 km of gauge conversion-700 km of Doubling of lines

MISSION 2020 OF INDIAN RAILWAYS

High speed rail travel Raising the speed of regular passenger trains

from 100-130 khph to 160-200 kmph To develop 50 world class stations which can

be recognized internationally Segregating passenger and freight tracks

completely

DMIC project

Mega infrastructure project of USD 90 billion

To connect Delhi & Mumbai through road and railway network of 1483 km

Delhi, U.P., Haryana, Rajasthan, Gujarat, Maharashtra this states will be connected to form a corridor of international standard.

PROGRESS MADE BY INDIAN RAILWAYS SINCE INDEPENDENCE1. The total length of railway network as on March, 2002 was 63028 km. (i) Broad Gauge (1.67 metre) - 45622 km. (70%) (ii) Metre Gauge (1 metre) - 14364 km. (24.6%) (iii) Narrow Gauge(0.77 metre) - 3136 km. (5.36%) As on March, 1951 – 53596 km. - 18% increase2. Additional Lines on the already existing busy routes– total running track had

increased from 59,315 km. to 1,07,969 km. in 2001.3. Electrification of route – By March,2006 the Indian railways had got 17500 km. of railway route electrified.(26% of total route) Purposes of Electrification –(i) relieves railways from steam engines. (ii) ensure more speedy movement. (iii) Clean and pollution free travel.4. Container Service - Provides door to door service for goods & commodities by CCI. 5. Computerised reservation & more and more coaches and sleepers. 6. METRO Railway - Kolkata, Delhi, Mumbai & Chennai 7. Super fast Trains

PIPELINES

Pipelines have become a major means of transport and are used in transporting crude oil, petroleum product and natural gas from the oil and natural gas fields to refineries, fertiliser factories and big thermal power generation plants.

Major categories of pipeline transportation in India :- 1. upper Assam Oil fields to Kanpur via Guwahati, Barauni and Allahabad2. Salaya (Gujarat) to Jalandhar (Punjab) via Viramgam, Mathura, Delhi and Panipat.3. Hazira (Gujarat) to Jagdishpur (U.P.) via Bijapur (M.P.) –the longest pipeline in India -1700km.4. Mumbai HIGH with Mumbai – Pune

PROPOSED PIPELINES – (I) Between Kandla and Panipat (II) Between Kandla and Bina (III) Between Mumbai and Manmad (IV) Between Vishakhapatanam to Vijaiwada (V) between Mangalore to Chennai via Bangalore

waterwaysIndia has a large number of perennial rivers and a very long coastline of 6100 km.

Types of waterways:- (a.) Inland water transport (b) Ocean water transportNational Waterways :- 1.The Ganga river - Allahabad to Haldia - 1620 km. 2. The Brahmaputra river - Sadiya TO Dhubri - 891 km. 3. The West Coast Canal - Kollam to Kottapuram - 14 km. 4. The Champakara Canal – Kerala -13 km. 5. Udagmandalam Canal - Kerala -22 km.Major Sea Ports :- At the time of Independence - 5 sea ports Sea ports at West Coast Seaports at East Coast 1. Kandla 1. Tuticorin 2. Mumbai 2. Chennai 3. Nhova Sheva (Jawahar Lal Nehru) 3. Ennore 4.Mormugao 4. Vishakhapatnam 5. Mangalore 5. Paradip 6. Kochi 6. Haldia

Airways

Air travel is the fastest, most comfortable and prestigious mode of transport. Civil Aviation Department of controls and supervises the activities of airlines and

gives guidelines for safe operations of the airlines. AIR SERVICES :- 1. Air India - 26 Air Craft 2. Indian Airlines - 54 Air Craft 3. Pawan Hans Helicopters 4. Private Air Lines (Scheduled & Non-scheduled)-70 International Airports :- 14 1.Delhi 8.Kochi 2.Mumbai 9.Hyderabad 3.Chennai 10. Guwahati 4. Kolkata 11. Bangalore 5. Amritsar 12. Thiruvananthapuram 6. Ahmedabad 13. Srinagar 7. Panaji 14. PuneAirports are managed by Airports Authority of India.

Cargo airlines :Blue Dart Aviation ltd is Operating scheduled cargo services inthe country

PAWAN HANS

SERVICES OPERATING IN THE

HILLY AREAS IN THE

NORTH-EASTERN

INDIA

The Kerala backwaters are a chain of brackish lagoons and lakes lying parallel to the Arabian Sea coast (known as the Malabar Coast) of Kerala state in southern India.

BACKWATER; water in a main river which is backed up(accumulated) by an obstruction such as dam

National waterways…. Allahabad

Saidiya

Kollam

Bhadrachalam

Mangalgadi

Major ports of India

NATIONAL HIGHWAYS DEVELOPMENT PROJECT (NHDP)

A project to upgrade, rehabilitate and widen major highways to a higher standard

Implemented under the leadership of Atal Bihari Vajpayee

Managed by National Highways Authority of India (NHAI)

Proposed investment for this project amounts to US $ 71 billion

This project will be completed in 7 phases

Most important of these being PHASE I and II

PHASE I : Golden Quadrilateral project

PHASE II : North-South & East-West corridor

NATIONAL HIGHWAYS AUTHORITY OF INDIA An autonomous agency of Government of India

NHAI was created through the promulgation of the National Highways Authority

of India Act, 1988

The authority was made autonomous in 1995

Responsible for development, maintenance, management and operation of

National highways totaling around 76,818 KMINDIAN ROAD NETWORK

CLASS LENGTH

National Highways (Already 4/6 laned) 16,000 KM

National Highways (Being laned) 25,000 KM

State Highways 1,54,522 KM

Major and other district roads 2,577,396 KM

Rural & Other roads 1,433,577 KM

Total (Approx.) 4,245,429 KM

GOLDEN QUADRILATERAL PROJECT

STATUS

Represents the PHASE I of the NHDP, launched in 2001

Launched by Shri Atal Bihari Vajpayee, it was planned to complete in January,

2012

It is highway network connecting many of the major industrial, agricultural and

cultural centers of India

This project seeks to improve the connectivity of four major cities in India

It is the largest highway project in India and 5th longest in the world

GQ project would greatly impact urban and rural growth of Indian

manufacturing

GQ project has led to improvements in both urban and rural areas of non-nodal

districts located 0-10 KM from the GQ

NORTH-SOUTH & EAST-WEST CORRIDOR

Represents the second phase of the NHDP

Consists of building 7300 KMs of 4/6 lane expressways

It connects Srinagar, Kanyakumari, Porbandar and Silchar

The proposed cost for this project is Rs. 42,000 crores

As of date : - October 31, 2013

Segment NS – EW Corridor

Total Length 7,142 KM

Length Completed 6,177 KM

Under Implementation 593 KM

Length to be Awarded 372 KM

% Completed 86.48 %

STATUS

ECONOMIC BENEFITS

The projected economic benefits of these highway projects are:

Establishing faster transport networks between major cities and ports

Providing an impetus to smoother movement of products and people within

India

Enabling industrial and job development in smaller towns through access to

markets

Providing opportunities for farmers, through better transportation of products

from the agricultural hinterland to major cities and ports for export, through

lesser wastage and spoils

Driving economic growth directly, through construction as well as through

indirect demand for cement, steel and other construction materials

Giving an impetus to Truck transport throughout India

CASE STUDY OF THE DELHI-MUMBAI DEDICATED FREIGHT CORRIDOR

--BY IIM-AHMEDABAD

PREMISE OF THE CASE:Large infrastructure projects have major implications for achieving low-carbon development goals

Assessment of CO2 emissions

DFC project signifies a major transition in the freight transport sector through increased sharing

of rails, which are

• More energy efficient

• Environment friendly

• Less Carbon intensive mode of transport

3 scenarios are taken into consideration here

• Business-as-Usual (Without DFC)

• Business-as-Usual (With DFC)

• Low Carbon (With DFC)

Here Low carbon path development assumes a number of supply-side interventions that lead to

further improvements in energy efficiency as well as decarbonisation of electricity at the

generation stage. This is different from the BAU scenarios

AVIATION INDUSTRY

THE BEGINNING

DEC 1910: Team of mechanics and aviators, led by Capt. WG Windham land in India.

Show case their airplanes for business opportunities

Exhibition at Exhibition Grounds in Allahabad

FIRST FLIGHT

YEAR: 1912

ROUTE: Karachi to New Delhi

Indian State Air Services and Imperial Air

BIRTH OF THE FIRST INDIAN AIRLINES

1932: JRD Tata formed Tata Airlines

JRD Tata was the first Indian to get A license

First Indian commercial carrier to transport mail and passengers within India

The company was based out of a small hut with a palm thatched roof at Juhu Airstrip in Bombay (Mumbai)

JRD flew the first leg of the inaugural Karachi-Madras (Chennai) journey himself, taking mail from Karachi to Bombay via Ahmedabad using a single-engine De Havilland Puss Moth

In its first year, Tata Airlines flew 160,000 miles, carrying 155 passengers and more than 10 tonnes of mail.

INDIAN AIR FORCE ACT 1932

The Indian Air Force was established in British India as an auxiliary air force of the Royal Air Force

The IAF commissioned its first squadron , No.1 Squadron, with four Westland Wapiti Biplanes and five Indian pilots in 1933

1924: Construction of civil airports began in India. Construction began at Dum Dum in Calcutta, Bamrauli in Allahabad and Gilbert Hill in Bombay

1937: The Aircraft Act, 1934 was promulgated

1940: Hindustan Aeronautics Limited (HAL) was set up by Walchand Hirachand in association with the then Mysore Government at Bangalore.

1941: India’s first aircraft, the Harlow trainer was rolled out for test flight in July 1941

BIRTH OF AIR INDIA

1946: Tata Airline becomes Air India

At the time of independence, nine air transport companies were carrying both air cargo and passengers.

1948: Government of India takes 49% of the company

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 Aircrafts

AIR CORPORATION ACT, 1953

All airlines nationalised

Eight formerly independent domestic airlines: Deccan Airways, Airways India, Bharat Airways, Himalyan Aviation, Kalinga Air Lines, Indian National Airways, Air India, Air Services of India were merged.

Air India International took over the international traffic

Indian Airlines Corporation handled the domestic operations

HELICOPTERS IN INDIA

1953: Civil helicopters introduced for the first time in the country

The commercial use of helicopters in India was limited to small Aviation companies who were involved in communication and crop spraying roles.

1985: Pawan Hans Helicopters Limited (PHHL) and Indira Gandhi Rashtriya Uran Academy (IGRUA) in Fursatganj, Rai Bareli in Uttar Pradesh for training of pilots were established

THE NATIONAL AIRPORTS AUTHORITY (NAA), 1986

The National Airports Authority [NAA] established in 1986 for the management of all domestic airports and Air Traffic Management of the entire Indian airspace and adjoining oceanic areas

BUREAU OF CIVIL AVIATION SECURITY, 1987

The BCAS was under the Ministry of Civil Aviation and set up as a sequel to the Kanishka Tragedy in June 1985. The main responsibility of BCAS are lay down standards and measures in respect of security of civil flights at international and domestic airports in India

Source

http://www.apaoindia.com/?page_id=185

http://dgca.nic.in/

http://www.civilaviation.gov.in/

http://www.bharat-rakshak.com/IAF/History/Aircraft/AviationIndia.pdf

http://www.bcasindia.nic.in/aboutus/aboutus.html

ECONOMIC REFORMS POST 1991

POLICIES Liberalization - Private Players Open Sky Direct import of ATF - Regulation FDI – domestic Services Sector Airports control - Airports Authority of India (AAI) Green Field Airport

Impact of liberalization

The Air Corporation Act, 1953 repealed Opening up of the domestic sector Disinvestment of the two public sector airlines New privately owned domestic airlines Open Sky Allow foreign airline of any country or ownership to land at

any port on any number of occasions and with unlimited seat capacity.

Foreign Direct Investment Up To 49% Of Foreign Equity & 100% Of NRI investment is

allowed Pertaining to the Domestic Air Transport Services Private Carriers permitted to operate scheduled services –

75% share in domestic aviation.

Entry of low cost carriers City side development of non-metro airports Allowing Indian carriers to compete on international routes Reduction in Landing charges. Fleet expansion plans of Air India Restructuring of Delhi and Mumbai airport and development

of Greenfield airports at Bangalore and Hyderabad undertaken.

Up gradation/ expansion/ development of airports undertaken depending upon traffic potential, requirement of airline operators and need of air passengers.

With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers.

CHRONOLOGY OF EVENTS

1991, September 20: Sahara Airlines started its operations. 1993, May: Jet Airways started its operations. 1995: India’s six private airlines accounted for more than 10%

of domestic traffic. Many foreign airlines started providing international services. In 1995, 42 airlines operated air services to, from, and through India.

1995, April 1: Airport Authority of India was constituted by merging the International Airport Authority of India with National Airports Authority.

1997: Policy on Airport Infrastructure of India was developed for the use and development of airport infrastructure.

1999, June 10: CIAL Airport was the first airport in India which was built with public-private participation and was made operational. The process for development of CIAL as a private airport began in 1993.

2000, October 2: Sahara Airlines was rebranded as Air Sahara.

2003: Entry of low cost carriers. Air Deccan started its services

2004: Government approved setting up of private Greenfield airports at Hyderabad and Bangalore.

2004, June: Low Cost Carrier – GoAir started it operations. 2004, December: Indian Scheduled carriers with a

minimum of 5 years of continuous operations and a minimum fleet size of 20 aircraft, were permitted to operate scheduled services to international destinations.

2005: Indian Airlines was rebranded as Indian. The Government designated Air India, Indian Airlines, Jet Airways and Air Sahara to operate international services.

2005, May: Kingfisher Airlines (Full Service Carrier) and Spice Jet (Low Cost Carrier) commenced operations.

2006, August: Low Cost Carrier – Indigo started its operations.

2006: The government approved the restructuring and modernisation of Mumbai and Delhi brownfield airports through the public-private partnership model.

2007: The Regional Airlines Policy was announced wherein licenses were given for operation of airlines within a particular region.

2008, April 24: The path breaking Greenfield Airport Policy of the Government was announced.

2008, August: Simplify Deccan was renamed as Kingfisher Red. 2009, May 12: AERA was established to regulate the economic

aspects of airports. It is an autonomous body set up by an Act of Parliament.

2010: Airport Economic Regulatory Authority Appellate Tribunal (AERAAT) was established.

At present, India is the 9th largest aviation market in the world with 90 operational airports, 1,180 aircrafts, 303 helicopters, 11 operational scheduled airlines and 133 non-scheduled operators. It is envisaged that by year 2020, India will be among top 3 Civil Aviation Markets in the world and will handle about 300 million passengers.

Table 2: Passenger Traffic Carried by Scheduled Carriers

Year Passenger Carried (in millions)

Domestic International Total 1990-91 7.5 6.3 13.8 1995-96 12.2 9.4 21.6 2003-04 15.7 14.6 30.3 2010-11 53.9 37.9 91.8

Source: DGCA, AAI; Analysis: MoCA

Key Drivers of growth of Indian aviation market

Rising domestic Gross Domestic Product (GDP) GDP - 5.7% in the period 90-91 to 2003-2004 which then rose to

8.6% during 2004-05 to 2010-11. Growing economic activity resulted in increase in business travel

and greater leisure travel Expanding middle-income group middle income group population in 2010 stood at 160 million

individuals i.e. 13.3% of the total population, which is expected to rise to 547 million in 2025 (i.e. 37.2% of the total population)

Demographic Dividend 62% of the population is in the working age group of 15-60 years -

indicating a larger employee base, greater business travel and greater economic activity.

Rising Urban Population Significant Market DevelopmentsSource: Spicejet Annual Report 2009

2003200420052006200720082009201020110

20

40

60

80

100

120

Column1LCCFCS

Low Cost Carrier (LCC) Low Cost Carrier (LCC) model which made air travel

affordable for common man got established firmly in the domestic market since 2004. This stimulated the pent up demand for air travel.

The domestic traffic is rapidly shifting towards the LCC model. Market sources suggest that this has crossed 67% during 2011-12.

This leads us to believe that Low Cost Operations in a price sensitive market like India appear to be a more sustainable business model

Investments in Airport and related infrastructure Total investment made by private airport operators in the last

five years was to the tune of Rs 30,000 crores spread across Greenfield development of Hyderabad and Bengaluru international airports and modernization of Delhi and Mumbai international airports

Growing tourism 2001 to 2010-the average annual growth rate of foreign

tourist arrivals in to India and Indian National departures from India grew by 9.2% and 11.5% respectively.

The number of foreign tourist arrivals in India stood at 5.6 Million in the year 2010 as against 3.46 Million in 2004 and 2.54 Million in 2001. Similarly, the number of Indian National departures from India stood at 12.1 Million in 2010 as against 6.21 Million in 2004 and 4.56 Million in 2001.

Untapped market potential

Air traffic density in India using this measure is very low at 72 as compared to China (282), which is 4 times higher; Brazil (231), which is 3 times higher etc. indicates the untapped market potential.

Global integration of businesses Greater economic activity and the consequent greater integration of businesses globally would mean greater business travellers across national boundaries. Also, the growing trend of outbound Mergers and Acquisitions (M & A) and is set to grow further in future implies greater business related travel

PERFORMANCE AND CONSOLIDATIONS

Airlines in India are having financial difficulties. Even Jet Airways has seen its market share and profits

decline and stock price plummet by 40% since 2005. Inability of the airlines to reduce costs “Irrational” pricing that set in after the advent of LCCs. They

have chased market share, i.e., revenue maximization and forced the incumbents to match their low prices.

OUTCOMES Either some of them go bust in a market shake-out or they

merge/get acquired by other airlines or business groups.

1. Indian Airlines and Air India

These two national carriers enjoyed monopoly power in the industry until the Air Corporations Act was repealed.

intense competition from private carriers - main reason for steep decline in their market share and profits.

Indian Airlines - monopoly on domestic services until 1994, market share decline from 100% to 17% since.

Air India and India Airlines merged in 2007 (NACIL was formed) in order to recover their losses and work efficiently

PROBLEMS- no clear ownership and mismanagement by authority

poor execution of plan and improper strategy along with massive misuse of funds

What went wrong?

Sub-optimal aircraft utilisation: Air India’s fleet utilisation is very poor with only around 100 operational aircraft out of a total registered fleet of 127 aircraft

Fleet issues: The B777-200LR, B747-400 and the A319 aircraft are poorly matched with the mission requirements of its international and domestic routes

Business model needs to be reworked: Air India requires a comprehensive review of its business model. At present there are fundamental weaknesses in each of its key domains.

Government intervention: In addition to these huge challenges, the management of Air India has to deal with excessive intervention by the Ministry of Civil Aviation and other ministries

2. Jet Airways and Air Sahara.

After the liberalization of Indian Economy in 1993, two new airlines, Jet Airways and Air Sahara entered in the domestic market.

15 years later, in 2008, Air Sahara was acquired by Jet Airways and renamed as JetLite.

Now Jet Airways and JetLite together share 23.8 % of the domestic market in India and this airline remained the market leader in Indian Domestic Sector for many years until recently toppled by Indigo to number 2 spot.

It is basically a full-service carrier, but also offers low-cost services under the name of JetKonnect.

3. Air Deccan and Kingfisher Airlines.

India's first low-cost carrier, Air Deccan, reported a $43 million loss for the fourth quarter ending June 2007.

To keep afloat, Air Deccan sold 26% of stake in May 2007 at $136 million to liquor baron Vijay Mallya's then two-year-old Kingfisher Airlines

This stake was later increased to 46%. The business models of these two airlines seemed to be as diametrically opposite - ran as separate entities. Kingfisher and Kingfisher Red

plan to improve performance and save money by sharing facilities and staff.

The King of Good Times, liquor barren, Vijay Mallya, gifted this airline to his son on his 18th birthday as a birthday gift in 2005, it was deemed that the passengers would fly in the sky with a style.

For next six years, it indeed treated its customers in style. Even the airlines served on-board meals on its low-cost wing Kingfisher Red, against the trend.

the dream collapsed somewhere in the sky and today, the aviation regulator has cancelled the flying license of the Kingfisher Airlines.

Due to its poor financial health, the airline is unable to pay its dues to the banks and salaries to the employees

http://www.solobackpacker.com/2012/11/09/an-overview-of-domestic-airlines-in-india/

Airlines and aircrafts

Indigo uses a fleet of 150 aircrafts from AIRBUS – A 320

The advantage of using a single type of aircraft shows in their profit making ability in this competitive aviation sector.

Jet uses a mix of wide bodied boeing 777 and narrw bodied 737’s as well as slightly wider Airbus A330’s

SWOT ANALYSIS