Indian Aerospace Industry – Immense Opportunities in the Air
PRMinds (press release), France
Mar 31, 2007
India is flying high on the back of healthy economy and improving condition of middleclass. Now the fast growing aviation industry has given it one more reason to smile.
Currently, India, the second largest aviation industry of the world, is riding high with over 8% economic growth coupled with a developing middleclass, and a burgeoning base of air travelers. The rising need for amending the present fleet of fighter jets adds to India’s positives and makes it an exciting market full of untapped opportunities.
Aero India 2007, which held in Bangalore (India) recently, registered the participation of big aerospace companies and inking of alliances and investment agreements.
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Racism in the air
William H Avery
Times of India
March 31, 2007
A US airline once had the motto ‘Come Fly the Friendly Skies’. A more fitting motto for some of India’s airlines might be ‘Come Fly the Fair and Lovely Skies’.
Even a casual visitor to India soon notices the national obsession with skin colour: the fairer the better. I saw this up close when i lived in Chennai 10 years ago.
Some Tamils there had the habit of segmenting the population into fairer-skinned Tamils with north Indian roots and darker-skinned Tamils with south Indian roots.
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CNN-IBN responds to Air Deccan
CNN-IBN
Mar 30, 2007
CNN-IBN Correspondent Ruksh Chatterji replies to Ms Vijaya Menon, Head of Corporate Communications, Air Deccan, regarding the company’s allegations against story. Below is his detailed response to the issues raised in the above-mentioned email.
At the outset let me clarify, the aim of this story was not to deliberately malign, target or purposely damage the reputation of Air Deccan. The three stories aired on CNN-IBN were the result of an investigation, which lasted over one-and-a-half months beginning on January 29, 2007. The investigation was undertaken following complaints from passengers on the flight DN763, on the above-mentioned date.
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Where is the airports economic regulatory body?
Robey Lal
Financial Express
Mar 27, 2007
India has some of the highest aviation costs and charges in the region. The airports are expensive, over-crowded, and have low service levels, while aviation turbine fuel (ATF) prices are high. An independent economic regulator is urgently needed if India is to fulfil its aviation potential.
In 2006, the Airports Authority of India (AAI) recorded profits of Rs 1,208 crore. It had reserves and surpluses of Rs 3,720 crore and a debt-to-equity ratio of less than 3%. The high profits and reserves, and the extremely conservative balance sheet are the by-products of aviation liberalisation, high charges, traffic growth and its monopoly status.
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Air-travel catching up with Mangaloreans
Mangalorean.com
Mar 26, 2007
Mangalore: Getting out of Mangalore had never been so easy and fast, thanks to the open sky policy. It is easy, neat and only marginally expensive to fly out of Mangalore to the immediate destinations like Bangalore, Chennai and Mumbai any time of the day. After Mangalore has become an international airport getting out of Mangalore overseas has become more easier.
This week Mangalore Airport scored a double. The first flight operated by Indian from Doha to Mangalore, which landed at Bajpe airport on Sunday, and the first wide bodied flight operated by Deccan Airlines from Mumbai to Mangalore, arrived on Monday (26 March 2007). Air India now operates to Abu Dhabhi, and Dubai and Doha directly from Mangalore.
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Interview: Madhu Terdal
To invest Rs 8600 cr in Delhi Airport before 2010: GMR
Moneycontrol.com
Mar 26, 2007
Madhu Terdal, Chief Financial Officer of GMR Infrastructure states that though they are based out of Bangalore, they have got a pan-India presence now.
GMR Infrastructure has bagged the Delhi Airport project as well as a couple of hydro projects in the North and the Ambala-Chandigarh road project.
Terdal says that they do plan to invest Rs 8600 crore in Delhi Airport before 2010. He adds that they are in the race for Asian and Egypt assets of Globaleq.
Excerpts from CNBC-TV18’s exclusive interview with Madhu Terdal >>>
INTERVIEW: KAPIL KAUL
‘Airlines are chasing marketshares rather than profitability’
Financial Express
Mar 26, 2007
India’s growth in aviation will shock and awe even diehard optimists. Last year, the sector grew 47%. With existing airlines ramping up operations and new entrants planning to take off soon, the number of commercial aircraft plying Indian skies is expected to grow from the present 300 to over 500 by 2010 and to 1,000 by 2020. Investments could touch $90 billion by then.
While the opportunities are enticing, there are many structural and policy challenges that need to be addressed to realise the huge potential. Kapil Kaul, CEO, Indian Subcontinent & Middle East, Centre for Asia Pacific Aviation (Capa), an independent aviation consultancy providing market intelligence, analysis and data services, shares his views on Indian aviation’s emerging flight path and the air pockets ahead with FE’s Satya Naagesh Ayyagary.
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INTERVIEW : M Thiagarajan
‘Low cost airlines are a fallacy in Indian markets’
Financial Express
March 24, 2007
For M Thiagarajan, managing director,Paramount Airw
ays, the journey from textiles to aviation was a long flight. A full blooded pilot, Thigarajan’s passion for aviation finally led to his setting up Paramount Airways in October 2005. He believes that low-cost tariff s cannot be a sustainable in the long run. In a free-wheeling interview with R Ravichandran of FE, he discusses a whole range of issues concerning the Indian aviation industry. Excerpts:
How do you view the current trend in the Indian aviation industry?
Industry estimates suggest that air traffic in India could double to 50 million passenger journeys a year by 2010. India would need 1,100 planes over that same period, worth $105 billion.
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‘Cheap’ budget airlines
CNN-IBN
Mar 23, 2007
New Delhi: A booming aviation industry, a plethora of low cost airlines, but no corresponding increase in infrastructure – low cost airlines are now cutting corners even compromising on passenger safety at times, as exposed by the CNN-IBN Special Investigation on Air Deccan.
It seems that as the existing infrastructure struggles to cope with the booming aviation industry, customer satisfaction has become a casualty of no-frills flying.
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Budget airlines are customer unfriendly
Karma Paljor
CNN-IBN
Mar 22, 2007
New Delhi: Low cost airlines have brought about an unprecedented growth in Indian aviation. The sector is growing from about 25 per cent every year out of which low cost airlines command about 40 per cent of the market share.
This boom without the right infrastructural support could be turning low cost airlines into customer unfriendly monsters.
MD Air Deccan, Captain G R Gopinath – India’s low cost travel revolution – started operations in 2003 with one aircraft flying to four destinations.
Today India has four low cost carriers, connecting over a 100 destinations and carrying over 12 million passengers every year.
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Fear of flying
Financial Express
Mar 15, 2007
Does this sound familiar? The government proposes a 26% stake for foreign airlines in domestic operators and an overall civil aviation FDI limit of 74%. The United Front and NDA governments went through many contortions over this. Civil aviation reform, in fact, is a study in official India’s paranoia and its vulnerability to vested interests. It is also a terrible missed opportunity—quick reforms could have made aviation as big a metaphor for Indian transformation as telecom. Also, uniquely among big sectors, aviation has seen not only stasis but also regression. Kuwait Airlines and Gulf Air held 40% in Jet Airways in the mid-1990s.
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Aerospace Industry’s Growth Opportunities in India
Arun Janarthanan
ARC Advisory Group (press release), US
Mar 12, 2007
The current scenario in the world’s second largest aviation market, India, is an economy growing in excess of 8 percent, a vibrant middleclass, and an expanding base of air travelers. Added to this, the need for upgrading the existing fleet of fighter jets makes India’s market exciting and a hotbed of untapped opportunities. Following global trends, India recently announced its own offset policy for procurement deals. The defense allocation being constantly on the rise, the competition is stiff among the defense suppliers from Europe, Russia, and US. This translates into opportunities for manufacturers and global service providers (GSP) in India. For global vendors, India is too good a market to be ignored.
Aero India 2007, recently held in Bangalore, India, witnessed the participation of major aerospace companies and signing of partnership and investment deals. Increasing demand from the Indian aviation and defense sector, as well as the procurement offset policy by the State, contributed to the spurt in participation and partnership deals.
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Creating world class airport
Prof NK Singh
Central Chronicle
Mar 12, 2007
“In the last one year, I have not been able to buy an aerobridge because of the processes, forget making a building. That is why I feel joint ventures are the best way to try and resolve some of these issues” [ Praful Patel, Union Minister for Civil Aviation, Indian Express (17th Sept.2006).
“The greatest present drawback to the use of aircraft for civil purpose such as commerce, mail, travel and sport, is lack of suitable airports” (Orville Wright (1925)
Since Wright spoke about constraints of airports some eighty years back the airports of the world have witnessed a transformation of aviation and airport scenario.
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In for the long haul
Shijith PK
Financial Express
Mar 10, 2007
Flying abroad has never been so good. After the old reliable Air India, and the international carriers, over the last two years or so, names that we are more accustomed to seeing at domestic terminals have been making their way onto departure information boards internationally. Domestic giants like Jet Airways and Air Sahara have been operating on routes to South East Asia and neighbouring countries like Nepal for some time now with Jet Airways even operating flights to the UK.
But it hasn’t been a rosy picture with Jet posting losses of US$ 24.2 million in the second quarter this year for its international operations. That however, hasn’t stopped the carrier from going ahead with its plans—10 Boeing 777s and 10 Airbus 330s are being added to its international fleet this year.
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Pass the Buck
Times of India
Mar 09, 2007
If you would like the low-cost aviation revolution to continue, you may soon have to fly after midnight and hang around at destination airports till dawn.
It’s just as well the civil aviation ministry is rethinking its proposal to decongest clogged airports by doubling landing, parking and navigation charges at Delhi, Mumbai and Bangalore during peak hours, while giving sops for flying to and from the airports when they are little used, say between midnight and 5 a.m.
According to civil aviation minister Praful Patel this is only a proposal, and even if implemented it would be a temporary measure before infrastructure shortages are eased.
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The flying elephant
The Economist, UK
Mar 08, 2007
Delhi: It was on a helicopter flight from Mumbai to Goa that Captain G. R. Gopinath had a vision of lifting Indians to the skies. Far below, silver television aerials were glinting from mud huts: signs of an economic boom that India’s four main airlines, at that time, had failed to capitalise on. So in 2003 Mr Gopinath launched India’s first low-cost carrier, Air Deccan, and started a craze. India now has 13 passenger airlines and a dozen awaiting permission to launch. The number of domestic passengers increased by around 30% last year.
Hence the government’s approval, on March 1st, of a long-standing proposal to merge four badly run state-owned carriers, in order to make them more competitive in a crowded market. The four are Air India, which mostly flies internationally, Indian (formerly Indian Airlines), which is mostly domestic, and their respective low-cost and regional subsidiaries, Air India Express and Alliance Air. Both the big firms have had to endure years of political meddling and underinvestment, and have lost out to sleeker competitors as a result.
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Babus making money on others’ misery
Financial Express
Mar 07, 2007
The civil aviation ministry’s proposal to double peak-hour landing charges at the three main domestic airports—the justification is ‘easing congestion’—is a classic case of bureaucratic rent-seeking. Having created conditions that have produced the current traffic clog-up at the airports, the civil aviation bureaucracy now wants to make money off it. Had Delhi and Mumbai been taken out of Airport Authority of India’s full control before, had militant unionism, among other things, not been allowed to dictate public policy for so long, traffic congestion would have been handled far better by now. But there is not a whisper of mea culpa in the ministry’s argument, no recognition of the amoral public policy implications of a quasi-monopolistic pricing policy. After all, if differential pricing was the idea, why not just stop at lowering non-peak landing charges to half their current rates? Had the ministry simply stuck to that, one could have glimpsed some sincerity, some indication that the government is only trying to incentivise carriers to spread out their flight timings.
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Creating world class airport
PR-Inside.com (Pressemitteilung), Austria
Mar 07, 2007
New Delhi : “In the last one year, I have not been able to buy an aerobridge because of the processes, forget making a building. That is why I feel joint ventures are the best way to try and resolve some of these issues” [Praful Patel, Union Minister for Civil Aviation, Indian Express (17th Sept.2006).
“The greatestpresent drawback to the use of aircraft for civil purpose such as commerce, mail, travel and sport, is lack of suitable airports” (Orville Wright (1925)
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Travel Bookers Eye Differences Between China And India
Reece Gladstone
EyeforTravel
China Hospitality News, China
Mar 05, 2007
Not only are India and China expected to dominate the Asian travel market place, but perhaps even the world if current trends are any indication.
The world’s focus is on both nations, and most refer to them as if in an equal phase of the growth cycle, bounding along from strength to strength. But scratch beneath the surface of opinion a little harder and in reality the experts are divided as to the supposed equal pegging of these massive emerging industries.
As a travel supplier this presents a rather interesting conundrum, that of which country to concentrate growth strategies on. Certainly this is true for suppliers with limited resources and budgets, or those that are not as established globally. Industry representatives from both nations will argue that theirs is the nation with the greatest potential, but how do you know for sure?
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ATA Airlines CEO Subodh Karnik Focuses on Tourist Routes
Richard Springer
San Leandro India West, US
March 02, 2007
When Subodh Karnik took over as chief executive officer of ATA Airlines Jan. 1, he became the latest in an impressive list of Indian American executives who have headed passenger airlines in the United States.
Rakesh Gangwal was president of US Airways from 1998-2001 and Rono Dutta led United Airlines as president from 1999-2002.
Karnik, who grew up in Mumbai, has a degree in mechanical engineering from the Birla Institute of Technology and Science in Pilani. When he attended BITS’ 25th year class reunion recently, he and the other alumni realized that about 150 out of a batch of 400 graduates currently live outside India, he told India-West by phone from ATA Airlines’ headquarters in Indianapolis, Ind.
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