Indian Civil Aviation is completing 100 glorious years on 18th February, 2011. The year 2011-12 will be declared as the Civil Aviation Centenary Year, starting from the 18th February, 2011 and ending on the same date in 2012. On this date in 1911, the first commercial plane flew in India between Allahabad and Naini. Since then the aviation in India has grown from strength to strength. Today India is the 9th largest civil aviation market in t he world and this forward march is likely to culminate in India becoming one of the three largest markets in the world by 2020. Let us look back and review the glorious history of the Indian Civil Aviation and also see what it has in store for the future.
In 1929 JRD Tata got the first pilot license issued in India, and became known as the Father of Indian Civil Aviation. He founded India's first commercial airlines, Tata Airlines in 1932 which in 1946 became Air India. After the Second World War as many as eleven private domestic airlines operated in India. The supply-demand was not in balance as the Indian aviation market was still in a fledgling state. Many of these airlines were making heavy losses as a result of which the government decided to nationalize the airlines by forming one domestic carrier and one international carrier. In 1953 Air-India International became a public sector corporation along with the Indian Airlines Corporation (catering to domestic routes) enjoying a monopoly in the domestic market.
Eight erstwhile private airlines were merged to form the Indian airlines Corporation, namely Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Air India, Kalinga Airlines, Indian National Airways and Air Services of India. The consequence of this liberalization was that by March 1995, 35.65% of the market was being catered by private carriers. The number of passengers carried by private air carriers had increased from 15,000 in 1990 to 3.6 million in 1994. In the early nineties, soon after deregulation, many of the new established airlines went bust, including Gujarat Airways, East West, UBAir and VIF. Passenger service had improved. Less than adequate airports and traffic control infrastructure, which was the main obstacle to future growth, needed to be improved and expanded for the industry to sustain long term growth. Increasing fare rates appeared to have a negative impact on growth as rock bottom fares were no longer sustainable to run a profitable airline. Aviation fuel in India was much higher compared to comparable costs elsewhere.
In 2003, Captain Gopinath, pioneer of the concept of Low Cost Carriers (LCCs) in India, started Air Deccan; which became the turning point of the scene of Civil Aviation of India. This was soon followed by a number of operators like Spicejet, IndiGo, Go Air, Kingfisher Airlines, Paramout Airways and MDLR Airlines. Subsequently, the Indian Civil Aviation Witnessed three major mergers: Jet Airways and Sahara (Jetlite), Air India and Indian Airlines; and Kingfisher and Deccan (Kingfisher Red). The rapid growth of aviation market, however, was arrested by the economic recession and got revived only after the recession got over.
The Indian Civil Aviation industry has witnessed 20 to 30 per cent growth rates during the last few years. Growth has now slowed down considerably due to ever increasing cost of the ATF (especially in India where ATF is heavily taxed). A slew in low-cost airlines now competes with the more established operators. Aviation infrastructure has not kept pace with the increased traffic and passenger volumes. India's main airports are currently facing capacity constrains but are in the process of being modernized and expanded with additional capacity. Privatization of the two major airports at Mumbai and Delhi has been completed. Two new greenfield airports have opened at Banglore and Hyderabad. Another major change as a result of deregulation of commercial aviation sector in India has been the option for private airlines to fly overseas after completing five years of operations in the domestic market. Jet Airways and Kingfisher Airlines already enjoy substantial international traffic.
Airbus, a leading aircraft maker in the world, predicted that India will be the fastest growing country for air travel for the next ten years with the domestic traffic increasing by an average of 12.2 percent per year. Traffic growth will also be amongst the world's highest, averaging 7.3 percent over the next 20 years compared to the world average of 4.7 percent. By 2028, Indian passenger fleet will increase four-fold to 1,163 aircrafts. Airbus said that by 2028, 14 of the top 20 airports in the world will be the Asia-Pacific region and they will include Mumbai and Delhi. With 10 percent growth, domestic India will be the second biggest growth market after domestic Turkey.
There is strength and resilience in India's commercial aviation sector both in the near and long term. If we take a realistic and a broad look at the Indian market, what resonates is that the future growth of air travel is among the greatest in the world. Let us hope while all operators are gearing up for increasing their fleet size (for example, the world record order of 180 more A-320 aircraft by LCC IndiGo), the infrastructure and manpower keeps pace with the expected growth. If it does, the benefits will surely accrue to the air traveler, around whom the whole business is built.
In 1929 JRD Tata got the first pilot license issued in India, and became known as the Father of Indian Civil Aviation. He founded India's first commercial airlines, Tata Airlines in 1932 which in 1946 became Air India. After the Second World War as many as eleven private domestic airlines operated in India. The supply-demand was not in balance as the Indian aviation market was still in a fledgling state. Many of these airlines were making heavy losses as a result of which the government decided to nationalize the airlines by forming one domestic carrier and one international carrier. In 1953 Air-India International became a public sector corporation along with the Indian Airlines Corporation (catering to domestic routes) enjoying a monopoly in the domestic market.
Eight erstwhile private airlines were merged to form the Indian airlines Corporation, namely Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Air India, Kalinga Airlines, Indian National Airways and Air Services of India. The consequence of this liberalization was that by March 1995, 35.65% of the market was being catered by private carriers. The number of passengers carried by private air carriers had increased from 15,000 in 1990 to 3.6 million in 1994. In the early nineties, soon after deregulation, many of the new established airlines went bust, including Gujarat Airways, East West, UBAir and VIF. Passenger service had improved. Less than adequate airports and traffic control infrastructure, which was the main obstacle to future growth, needed to be improved and expanded for the industry to sustain long term growth. Increasing fare rates appeared to have a negative impact on growth as rock bottom fares were no longer sustainable to run a profitable airline. Aviation fuel in India was much higher compared to comparable costs elsewhere.
In 2003, Captain Gopinath, pioneer of the concept of Low Cost Carriers (LCCs) in India, started Air Deccan; which became the turning point of the scene of Civil Aviation of India. This was soon followed by a number of operators like Spicejet, IndiGo, Go Air, Kingfisher Airlines, Paramout Airways and MDLR Airlines. Subsequently, the Indian Civil Aviation Witnessed three major mergers: Jet Airways and Sahara (Jetlite), Air India and Indian Airlines; and Kingfisher and Deccan (Kingfisher Red). The rapid growth of aviation market, however, was arrested by the economic recession and got revived only after the recession got over.
The Indian Civil Aviation industry has witnessed 20 to 30 per cent growth rates during the last few years. Growth has now slowed down considerably due to ever increasing cost of the ATF (especially in India where ATF is heavily taxed). A slew in low-cost airlines now competes with the more established operators. Aviation infrastructure has not kept pace with the increased traffic and passenger volumes. India's main airports are currently facing capacity constrains but are in the process of being modernized and expanded with additional capacity. Privatization of the two major airports at Mumbai and Delhi has been completed. Two new greenfield airports have opened at Banglore and Hyderabad. Another major change as a result of deregulation of commercial aviation sector in India has been the option for private airlines to fly overseas after completing five years of operations in the domestic market. Jet Airways and Kingfisher Airlines already enjoy substantial international traffic.
Airbus, a leading aircraft maker in the world, predicted that India will be the fastest growing country for air travel for the next ten years with the domestic traffic increasing by an average of 12.2 percent per year. Traffic growth will also be amongst the world's highest, averaging 7.3 percent over the next 20 years compared to the world average of 4.7 percent. By 2028, Indian passenger fleet will increase four-fold to 1,163 aircrafts. Airbus said that by 2028, 14 of the top 20 airports in the world will be the Asia-Pacific region and they will include Mumbai and Delhi. With 10 percent growth, domestic India will be the second biggest growth market after domestic Turkey.
There is strength and resilience in India's commercial aviation sector both in the near and long term. If we take a realistic and a broad look at the Indian market, what resonates is that the future growth of air travel is among the greatest in the world. Let us hope while all operators are gearing up for increasing their fleet size (for example, the world record order of 180 more A-320 aircraft by LCC IndiGo), the infrastructure and manpower keeps pace with the expected growth. If it does, the benefits will surely accrue to the air traveler, around whom the whole business is built.
