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Aviation Industry in India
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Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people.

The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan.

In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers....
Aviation Industry in India
Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization
of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being
primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full
service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation
market. Earlier air travel was a privilege only a few could afford, but today air travel has become much
cheaper and can be afforded by a large number of people.
The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between
Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial
Airways. It was an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD Tata founded
Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying
both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India,
Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient
Airways shifted to Pakistan.
In early 1948, Government of India established a joint sector company, Air India International Ltd in
collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed
constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the
Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations
Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel
passengers and Air India International (AI) for international air travel passengers. The assets of the existing
airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a
monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder
services between smaller cities, was merged with IAC in 1994. These government-owned airlines dominated
Indian aviation industry till the mid-1990s.
In April 1990, the Government adopted open-sky policy and allowed air taxi- operators to operate flights
from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo
and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of
IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the
Air Corporations (Transfer of Undertaking and Repeal) Act, 1994. Private operators were allowed to provide
air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non
Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI
route in the domestic air transport services sector. However, no foreign airline could directly or indirectly hold
equity in a domestic airline company.
By 1995, several private airlines had ventured into the aviation business and accounted for more than 10
percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines, East West Airlines,
ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But only Jet Airways and
Sahara managed to survive the competition. Meanwhile, Indian Airlines, which had dominated the Indian air
travel industry, began to lose market share to Jet Airways and Sahara. Today, Indian aviation industry is
dominated by private airlines and these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet
etc, who have made air travel affordable.
Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF)
prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and intense price competition
among the players. But one of the major challenges facing Indian aviation industry is infrastructure
constraint. Airport infrastructure needs to be upgraded rapidly if Indian aviation industry has to continue its
success story. Some steps have been taken in this direction. Two of India's largest airports-Mumbai and
New Delhi-were privatized recently. Two greenfield airports are coming up at Bangalore and Hyderabad in