India has a unique opportunity to leverage one of the fastest growing aviation markets in the world. As the EU and North America clamour for market shares, policy makers in India can give huge concessions, says shashank tripathi
The human rights lobby in Washington – a sanctimonious body at
best – during the Clinton Administration was going hell for leather and chastising the Chinese regime for human rights violations. Mired in the Monica Lewinsky scandal, even Clinton started making noises about the same. China dropped the bomb shell and literally brought Washington down on its knees. It blithely announced that aircraft orders will not go to Boeing but to its rival Airbus from Europe. As the Indian aviation market grows explosively, even Indian policy makers have a huge opportunity to do something similar – leverage aircraft purchase orders and bilateral agreements with other airlines, to extract concessions in other spheres – economic, political & even strategic. According to Director General of Civil Aviation (DGCA), annual air passenger traffic in the country grew by 46% & 49% in the last two years, respectively. And if the estimates of International Air Transport Association (IATA) are to be believed, this growth has played an important role in boosting the world’s aviation business, which is expected to grow to $5.6 billion this year from $5.1 billion a year ago.
Moreover, Centre for Asia Pacific Aviation (CAPA), has forecasted domestic traffic to grow by 25% to 30% per year until 2010 and international traffic to grow by 15%, taking the overall Indian market to over 100 million passengers by the end of the decade. Meanwhile, DGCA has projected domestic traffic growth rate between 22% & 25% for the next couple of years.
Looking at this whopping growth in air traffic, one can easily foresee the huge demand of commercial planes in the times ahead, which Ministry of Civil Aviation (MOCA) anticipates to reach somewhere between 1,500 & 2,000 in next 10 years. Moreover, demand for aircraft is further expected to grow, as barely 0.8% of India’s population travels by air at present and this figure is going to increase many folds for sure.
If the above numerical evidences are not enough for anyone to comprehend the scope in the sector, then consider this. With increasing air traffic and demand for planes, need for a huge chunk of well trained pilots, flying schools to train them, ground staff, Air Traffic Controls and Maintenance Repair & Overhaul (MRO) facilities, would also escalate. Currently, India needs some 6,000 pilots to cope with the mounting demand that would be created in the next couple of years.
As for the big aviation behemoths coming to India and investing out here, no one wants to miss this opportunity. Especially with Indian economy growing at over 9% and the country inviting private players to contribute in the best possible manner for developing its overall aviation infrastructure, which entails $375 billion.
Boeing & Airbus have already established a sort of stranglehold in the Indian market, with most of the country’s airlines opting for either of the two. Boeing 747/400 & 747/400 ER jets, which are maximum used amongst its existing family of aircrafts in India, come at price tag of anywhere between $228 million & $260 million. While one of the most successful planes of Airbus family, which has given tough competition to United States’ Boeing, is A320 & a single aircraft is priced about $400 million.
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Source : IIPM Editorial, 2008
The human rights lobby in Washington – a sanctimonious body at
best – during the Clinton Administration was going hell for leather and chastising the Chinese regime for human rights violations. Mired in the Monica Lewinsky scandal, even Clinton started making noises about the same. China dropped the bomb shell and literally brought Washington down on its knees. It blithely announced that aircraft orders will not go to Boeing but to its rival Airbus from Europe. As the Indian aviation market grows explosively, even Indian policy makers have a huge opportunity to do something similar – leverage aircraft purchase orders and bilateral agreements with other airlines, to extract concessions in other spheres – economic, political & even strategic. According to Director General of Civil Aviation (DGCA), annual air passenger traffic in the country grew by 46% & 49% in the last two years, respectively. And if the estimates of International Air Transport Association (IATA) are to be believed, this growth has played an important role in boosting the world’s aviation business, which is expected to grow to $5.6 billion this year from $5.1 billion a year ago.Moreover, Centre for Asia Pacific Aviation (CAPA), has forecasted domestic traffic to grow by 25% to 30% per year until 2010 and international traffic to grow by 15%, taking the overall Indian market to over 100 million passengers by the end of the decade. Meanwhile, DGCA has projected domestic traffic growth rate between 22% & 25% for the next couple of years.
Looking at this whopping growth in air traffic, one can easily foresee the huge demand of commercial planes in the times ahead, which Ministry of Civil Aviation (MOCA) anticipates to reach somewhere between 1,500 & 2,000 in next 10 years. Moreover, demand for aircraft is further expected to grow, as barely 0.8% of India’s population travels by air at present and this figure is going to increase many folds for sure.
If the above numerical evidences are not enough for anyone to comprehend the scope in the sector, then consider this. With increasing air traffic and demand for planes, need for a huge chunk of well trained pilots, flying schools to train them, ground staff, Air Traffic Controls and Maintenance Repair & Overhaul (MRO) facilities, would also escalate. Currently, India needs some 6,000 pilots to cope with the mounting demand that would be created in the next couple of years.
As for the big aviation behemoths coming to India and investing out here, no one wants to miss this opportunity. Especially with Indian economy growing at over 9% and the country inviting private players to contribute in the best possible manner for developing its overall aviation infrastructure, which entails $375 billion.
Boeing & Airbus have already established a sort of stranglehold in the Indian market, with most of the country’s airlines opting for either of the two. Boeing 747/400 & 747/400 ER jets, which are maximum used amongst its existing family of aircrafts in India, come at price tag of anywhere between $228 million & $260 million. While one of the most successful planes of Airbus family, which has given tough competition to United States’ Boeing, is A320 & a single aircraft is priced about $400 million.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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