INDIAN AIRLINES INDUSTRY- AN OVERVIEW
Defining Aviation sector
The airlines industry comprises passenger air transportation; both scheduled
and chartered, but exclude air freight transport. Industry volumes are defined
as the total number of passengers enplaned at all airports within the country
or region. Industry value is defined as the total revenue obtained by airlines
from transporting these passengers.
The Indian airlines industry generated total revenues of $6 billion in 2006,
this representing a compound annual growth rate (CAGR) of 27.6% for the
period spanning 2002-2006.
The domestic segment was the industries most successful in 2006,
generating total passenger volumes of 36.4 million, equivalent to 90.9% of
the industry's overall volume.
The performance of the industry is forecast to accelerate, with an anticipated
CAGR of 39.3% for the five-year period 2006-2011 expected to drive the
industry to a value of $31.5 billion by the end of 2011.
Airline passenger volumes increased with a CAGR of 25.6% between 2002 -
2006, to reach a total of 40.1 million people in 2006. The industry's volume
is expected to rise to 205.2 million people by the end of 2011, this
representing a CAGR of 38.6% for the 2006-2011 period.
The international segment contributed the remaining passenger volumes of
3.7 million in 2006, equating to 9.1% of the industry's aggregate volumes.
History of Aviation Industry in India
The first commercial flight in India was made on February 18, 1911,
when a
French pilot Monseigneur Piguet flew airmails from Allahabad to Naini,
covering a distance of about 10 km in as many minutes.
Tata Services became Tata Airlines and then Air-India and spread its
wings
as Air-India International. The domestic aviation scene, however, was
chaotic. When the American Tenth Air Force in India disposed of its planes
at throwaway prices, 11 domestic airlines sprang up, scrambling for
traffic
that could sustain only two or three. In 1953, the government
nationalized
the airlines, merged them, and created Indian Airlines. For the next 25 years
JRD Tata remained
the chairman of Air-India and a director on the board of Indian
Airlines.
After JRD left, voracious unions mushroomed, spawned on the pork
barrel
jobs created by politicians. In 1999, A-I had 700 employees per plane; today
it has 474 whereas other airlines have 350.
For many years in India air travel was perceived to be an elitist activity. This
view arose from the Maharajah syndrome where, due to the
prohibitive
cost of air travel, the only people who could afford it were
the rich and
powerful.
In recent years, however, this image of Civil Aviation has
undergone a
change and aviation is now viewed in a different light - as an essential link
not only for international travel and trade but also for providing
connectivity
to different parts of the country. Aviation is, by its very nature, a critical part
of the infrastructure of the country and has important ramifications for
the
development of tourism and trade, the opening up of inaccessible areas
of
the country and for providing stimulus to business activity and
economic
growth.
Until less than a decade ago, all aspects of aviation were firmly
controlled
by the Government. In the early fifties, all airlines operating in the
country
were merged into either Indian Airlines or Air India and, by virtue of the Air
Corporations Act, 1953; this monopoly was perpetuated for the next
forty
years. The Directorate General of Civil Aviation controlled every aspect
of
flying
including granting flying licenses, pilots, certifying aircrafts for flight
and
issuing all rules and procedures governing Indian airports and airspace.
Finally, the Airports Authority of India was entrusted with the responsibility
of managing all national and international air ports and administering
every
aspect of air transport operation through the Air Traffic Control. With
the
opening up of the Indian economy in the early
Nineties, aviation saw some important changes. Most importantly, the
Air
Corporation Act was repealed to end the monopoly of the public sector
and
private airlines were reintroduced.
AIR INDIA
History of Air India
Air India is Indias national Airline. Air Indias history can be
traced to
October 15, 1932. On this day J.R.D. Tata, the father of Civil
Aviation in
India and founder of Air India, took off from Drigh Road Airport,
Karachi,
in a tiny, light single-engine de Havilland Puss Moth on his flight
to
Mumbai via Ahmedabad.
Air India was earlier known as Tata Airlines. At the time of its
commencement, Tata Airlines consisted of one Puss Moth, one
Leopard
Moth, one palm-thatched shed, one whole time pilot, one part-time
engineer,
and two apprentice-mechanics. Tata Airlines was converted into a
Public
Company under the name of Air India in August 1946.
On March 8, 1948, Air India International Limited was formed to
start Air
Indias international operations. On June 8, 1948, Air India started its
international services with a weekly flight from Mumbai to
London via
Cairo and Geneva with a Lockheed Constellation aircraft.
In early 1950s due to deteriorating financial condition of various
airlines, the
Government decided to nationalize air transport. On August 1,
1953 two
autonomous corporations were created. Indian Airlines was formed
with the
merger of eight domestic airlines to operate domestic services,
while Air
India International was established to operate the overseas services. The
word 'International' was dropped in 1962. With effect from March 1,
1994,
the airline has been functioning as Air India Limited.
Air India's worldwide network today covers 44 destinations by
operating
services with its own aircraft and through code-shared flights. Important
destinations covered by Air India are Bangkok, Hong Kong, Jakarta,
Kuala
Lumpur, Osaka, Singapore, Tokyo, Seoul, Dar-es-Salam, Nairobi, Frankfurt,
London, Paris, Birmingham, Abu Dhabi, Al Ain, Bahrain, Dammam, Doha,
Dubai, Jeddah, Muscat, Riyadh, Kuwait, Los Angeles, Chicago, Newark,
New York, and Toronto.
