privatisation in indian aviation
TRANSCRIPT
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PRIVATISATION OF INDIANAVIATION INDUSTRY
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INTRODUCTION
The Indian aviation industry is one of the fastest growingaviation industries in the world.
Private airlines accounting for more than 75 per cent ofthe sector of the domestic aviation market.
The industry is growing at a compound annual growthrate (CAGR) of 18 per cent.
The country has 454 airports and airstrips, of which 16are designated as international airports.
Total Passenger Traffic : 50 million With the growth in the industry, airport retailing has also
gained pace in the recent times.
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HISTORY
Indian Aviation Sector (till 1986)
Industry from 1986-2003
Airline industry from 2003 2006
Aviation from 2006 onwards
The next big thing- the aviation industry!
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MARKET SIZE The rapidly expanding aviation sector in India handles
about a staggering 2.5 billion passengers across the worldin a year.
Also handles 45 million tonnes (MT) of cargo through 920airlines using 4,200 airports and deploys 27,000 aircraft.
Today, 87 foreign airlines fly to and from India and fiveIndian carriers fly to and fro across 40 countries in theworld.
Increase to a 10-12 per cent range over the next 12
months is expected.
The Private carriers are supposedly estimated to post acombined profit of US$ 350 million US$ 400 million forthe financial year ending March 31, 2012.
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MARKET SHARE OFAIRLINES
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THE PLAYERS
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DRIVERS TO GROWTH
Increase in Consumerism
Increasing Tourists Travel
Increasing Business Travel
Entry of Low Cost Carriers
Untapped Market
Rising Disposable incomes
Rising Middle Class Population Increasing Competition
Government Reform Measures
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ISSUE OF THE CONCERN
Mounting losses of the airlines
The new Ground Handling policy
High Aviation Turbine Fuel (ATF) prices
High airport charges
Shortage of qualified pilots and technicalmanpower
Safety and security issues Closure of old airports
Congestion at airports
High taxation etc.
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MAJOR LOSS RESULTINGFACTORS
Rising Fuel Prices
Congestion
High Airport (aeronautical) Charges
Low share of Non-Aeronautical Revenue
Substitutes Availability
a) Indian Railways
b) Virtual Platform Cut-throat Competition faced by Premium Airlines
on their Pricing
THROUGH TURBULENT
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THROUGH TURBULENTTIMES
The Indian Aviation Industry has been goingthrough a turbulent phase over past several yearsfacing multiple headwinds high oil prices andlimited pricing power etc.
In the beginning of 2008-09, the sector wasimpacted by sharp rise in crude oil prices.
decline in passenger traffic growth which led tosevere underperformance in 2009-10.
High prices of Aviation Turbine Fuel(ATF).
Internationally, too airlines are going throughperiod of stress.
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FDI IN AVIATION
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WAY FORWARD Direct ATF Imports
International Routes
Financial guarantees to the debt-ridden nationalcarrier in securing funding at competitive rates
Increase supervision on pricing policy by certaincarriers, to bring relief to the airline sector
Enable an open bilateral regime to stimulatecompetition and traffic growth and make India regional
aviation hub Operationalize Centralized ATFM system to
optimize the capacity vs. demand to ensureregulated flow of traffic to minimize delays and
congestion
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CONCLUSION
Indian Aviation Industry has been one of the
fastest-growing aviation industries in the world private airlines accounting for more than 75 % of
the sector of the domestic aviation market
compound annual growth rate (CAGR) of 18 %and 454 airports and airstrips
Aviation in India supports 1.7 million jobs, 0.5% ofGDP and 90% of international tourist arrivals.
India is a market of about 100 million passengersannually.
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