ADVERTISING AND BRAND MANAGEMENT
TOPIC: KINGFISHER AIRLINES IN AVIATION INDUSTRY
Instructor: Prof. JAYA GOPALKRISHNAN
SOMNATH SAHA PGPM/09-11/ 108 ASHIS ROUTRAY PGPM/09-11/ 70 CHINMAYA KUMAR TRIPATHY PGPM/09-11/ 76
About aviation Industry
The history of civil aviation in India began in December 1912. This was with the opening of the first domestic air route between Karachi and Delhi by the Indian state Air services in collaboration with the Imperial Airways, UK. Three years later, the first Indian airline, Tata Sons Ltd., started a regular airmail service between Karachi and Madras without any patronage from the government. In early 1948, a joint sector company, Air India International Ltd., was established by the Government of India and Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. Potential for Growth-
The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) of 18 per cent, and was worth US$ 5.6 billion in 2008. The Centre for Asia Pacific Aviation (CAPA) forecasted that domestic traffic will increase by 25 per cent to 30 per cent till 2010 and international traffic growth by 15 per cent, taking the total market to more than 100 million passengers by 2010. By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tonnes of cargo per annum. Airport infrastructure is being developed at a fast pace to cope up with the growth of air transport operations. A simultaneous operation from parallel runways having facilities for category 3B level operations has now become a reality. Ground based communication, navigation and surveillance facilities are now being replaced by satellite based facilities. India is developing its new satellite based navigation system Gagan, which will enable precision approaches at all airports in India.
Over the next five years, AAI has planned a massive investment of US$ 3.07 billion—43 per cent of which will be for the three metro airports in Kolkata, Chennai and Trivandrum, and the rest will go into upgrading other non-metro airports and modernising the existing aeronautical facilities.
Aviation Investment Policy-
The major policies supporting infrastructure which are now in place are: 1. 100 per cent FDI under automatic route is permissible for greenfield airports. 2. For existing airports, foreign equity up to 100 per cent is permitted through automatic approvals and up to 100 per cent through special permission (from FIPB, Ministry of Finance). 3. Private developers allowed to setup captive airstrips and general airports 150 km away from an existing airport. 4. 100 per cent tax exemption for airport projects for a period of 10 years.
The Indian government plans to set up an Airport Economic Regulatory Authority to provide a level playing field to all players. During 2007-08, various companies have shown an interest in the Indian aviation industry. Investment in airport infrastructure was over US$ 5 billion in 2008 and will go up US$ 9 billion by 2013, of which close to US$ 6.8 billion is expected to come through public private partnerships (PPP) model, according to a study by research firm Frost & Sullivan. Tata Advanced System Limited (TAS), to set up a US$ 113.63 million helicopter manufacturing unit at the Aerospace Special Economic Zone (SEZ) in Adhibatla village near the Hyderabad international airport. GMR Infrastructure to invest US$ 151 million corporate jet market in India, and US$ 60 million for a proposed JV with aircraft component manufacturers such as Honeywell and Safran to set up a...
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