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Indian Aviation Industry

June, 2013

Brief Introduction

Aviation as an infrastructure segment has played vital role in facilitating the growth of business and economy in India. A robust civil aviation set-up is key to seamless flow of investment, trade and tourism, with significant multiplier effects through the economy. Aviation sector does not only provide air transport for passengers and goods, but also is a strategic element for employment generation. About one-third of world trade (by value) is delivered by air and about half of international tourism is facilitated by air links.

Civil aviation industry is an important engine for innovation and technological progress in a world of decreasing barriers to trade.

Market Size

  • Total domestic passengers carried by the scheduled domestic airlines between January and April 2013 were 20.289 million, revealed the official statistics.
  • No-frill carrier IndiGo lead in terms of market share with 29.8 per cent of the pie, followed by Jet Airways-Jet Lite combine at 22.6 per cent, Spice Jet 19.6 per cent, Air India Domestic 19.2 and Go Air at 8.9 per cent for the January-April 2013 period.
  • The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 449.26 million from April 2000 to march 2013, as per the data released by Department of Industrial Policy and Promotion (DIPP).

Key Developments and Investments

  • Jet Airways, India's second largest airline by market share, is in talks with Abu Dhabi-based Etihad Airways for a strategic alliance. In the light of the discussions, the two have been involved in various collaborative agreements.
    Jet has recently leased a wide body aircraft along with 60 of its cabin crew to Etihad. According to the ‘aviation’ jargon, a wet lease of an aircraft is an arrangement whereby the lessor (Jet in this case), provides crew, maintenance and aircraft for a consideration. In turn the lessor takes on the responsibility for supplying and operating the aircraft.
  • Jet Airways, that carried the largest number of international passengers from India in 2012, would also be offering visa procurement services to its passengers who have travel plans for the United Arab Emirates (UAE) and are flying the carrier. It has partnered with Dubai-based travel service firm Dnata wherein the travellers from India to Abu Dhabi, Dubai and Sharjah would have the option to individually secure their visa prior to departure.
    Passengers would be guided through the visa process by Dnata's travel specialists, who will collect all the necessary documents and submit the visa application to the UAE Government on the passengers’ behalf.
  • In a bid to offer a more convenient transit to international passengers, the Rajiv Gandhi International Airport in Hyderabad is set to commence ‘visa on arrival’ facility, after it gets a nod from the Centre.
    Visitors from 11 countries will be eligible to get a visa on arrival with effect from May 31, 2013. The ‘tourist visa-on-arrival’, with a maximum validity of 30 days and single entry facility, shall be granted by the immigration officers at the airport to the citizens of 11 countries-- Finland, Japan, Luxembourg, New Zealand, Singapore, Cambodia, Laos, Vietnam, Philippines, Myanmar and Indonesia.
  • Chhatrapati Shivaji International Airport (CSIA), managed by Mumbai International Airport Pvt. Ltd. (MIAL) has been honoured with ISO 14064-1:2006 certification for its Carbon Emissions Accounting by Bureau Veritas, a global leader in carbon certification worldwide, for the second year in a row.
    In 2012, CSIA had become the first ever airport in India and the second in Asia, to be acknowledged for its consistent efforts in reducing its carbon footprint. With the certification in 2013, CSIA is now in the process of upgrading its ACI Airport Carbon Accreditation Rating from Mapping (Level 1) to Reduction (Level 2).
    CSIA has introduced a variety of measures to reduce carbon emissions from its operations. CSIA was the first airport in India, to initiate the mapping process voluntarily and submit emission levels to Directorate General of Civil Aviation (DGCA), in 2012.