Executive Summary 2z4n4v

EXECUTIVE SUMMARY Aviation sector in India has been transformed from an over regulated and under managed sector to a more open, liberal and investment friendly sector since 2004. Entry of low cost carriers, higher house hold incomes, strong economic growth, increased FDI inflows, surging tourist inflow, increased cargo movement, sustained business growth and ing government policies are the major drivers for the growth of aviation sector in India. Forecasts by AAI for the next 5 years have projected a sustainable growth rate of 16% for international and 20% for domestic aviation sector. Recognizing the exponential growth of air traffic in India, the Ministry of Civil Aviation has been following a very liberal policy in the exchange of capacity entitlements / traffic rights. Domestic airlines have been allowed to fly overseas, forge partnerships with foreign carriers while foreign carriers in turn have been interlining with domestic airlines to access secondary destinations. The government has also tried to ensure an environment conducive for growth of all stakeholders associated with Indian aviation segment. With the rise in the number of airlines, growing enger segment and route expansion, there is however a need for Indian airports to have their infrastructure in place, which unfortunately at present is the weakest link in the chain. Greenfield and modernization projects are being developed on PPP model to develop facilities conforming to international standards and to encourage the domestic operators to shift base, so as to decongest major airports. To monitor the quality of services rendered by various airports and their tariff, an independent regulator, Airport Economic Regulatory Authority (AERA), is proposed to be appointed. To ensure competitive practices in THE AIRLINES SECTOR The aviation industry in India has grown by leaps and bounds in recent years in of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport. The airlines today have made themselves more popular among its customers by various marketing tactics like: • Reduced costs of air tickets for frequent flyers. • E-ticketing i.e. virtually eliminating the need for agents. Rynair and Easy jet two of UK’s low cost carriers have eliminated travel agents completely and sell all their tickets online., • Selling tickets through online auctions, • Various freebies and accommodation offers provided at lower rates. • Improved and interactive staff. • Increase in aircraft capacity These are a few of the many reasons for the increasing popularity of the airlines. In of quantity the airlines industry turnover in the year 99 was approximately 44 billion, 14 million engers traveled using its services. Till recently, Indian Airlines

had a monopoly in the sector. However, in 1993 the skies were opened for private participation and 8 airlines got the nod to commence operations. Of these, only two have survived - Jet Airways and Sahara Airlines. The market share of Indian Airlines vis-à-vis private players is given below. Airlines Market Share Aircrafts Owned Indian Airlines 47% 55 Private Airlines* 53% 35