Aviation Industry - Can India lead?

Aviation industry - Can India lead?


India’s Aviation sector is one of the fastest growing sectors in the world. There are about 450 airports and 1100 registered aircrafts in India. This sector has a compound annual growth rate of about 18%. Indian airlines industry had total revenue of $14.2 billion in 2011. These figures reflect the growing potential of Indian airlines sector. But we need to analyze, does this sector has the ability to emerge as a future world leader in aviation industry.

Yes:

-With the increase in per capita income, more and more Indians are now able to travel through airlines.

-Government has allowed FDI in aviation industry. So, collaboration with foreign players will enhance Indian airlines global reach.

-Interest shown by foreign airlines in buying stakes in domestic airlines has shown the faith and confidence of foreign industries about Indian airline sector.

-Also, Indian companies through these collaborations will get the much needed global exposure in airlines sector.

-FDI in aviation sector will bring in foreign capital as well as technology, which transform the domestic aviation industry and can turn India into the preferred destination for aero planes manufacturing.

No:

-Most of the civil air carriers in India today are under severe financial strain. For instance, Air India has a debt of approximately $6.4 billion.

-Indian airlines are operating with high fuel costs because of the PSU’s monopoly in finalizing the price of ATF (Air Turbine Fuel).

-Volatility in Rupee’s price against USD is yet another problem, which impacts airline companies long term planning.

-Kingfisher’s debacle has proved to be disastrous for airline companies. They are already facing the complex taxation and bureaucratic controls. Now, this new episode has made it more difficult for these players to raise funds from markets.

Conclusion:

With high on optimism Indian airline industry has crossed new milestones and progressing to achieve new targets. Unfortunately, domestic rules are pulling back this sector from realizing its potential to the fullest extent. With the new opportunities opened up for foreign players, these domestic hurdles needs to be eradicate, then only we can expect India to emerge as the world leader in aviation industry.
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    Discussion

  • RE: Aviation Industry - Can India lead? -Deepa Kaushik (10/23/14)
  • India into the aviation sector is like a newly planted tree. It is very early to judge if we can lead. It is good to aim and dream high but overconfidence is bad. It is not that we cannot lead in aviation industry. To be realistic, we need to focus and work a lot in this field.

    We have a lot many challenges to be met to get ourselves to the international standard. Having FDI into aviation industry has their own pros and cons. It us not only the investment and technology that is into the deal, but we are definitely losing some share from our own authority granting the access to the foreigners to interrupt our way if processing. Any loophole could prove fatal and make a big loss for us.

    Still having the FDI is the only scope for us to improve and raise ourselves to international standards. If we want to get in to the race for position, we need to let FDI have a fair play. But more important for ys right now is to tackle the internal issues and clear off the debts for our airlines especially the case of Air India.

    Just boosting for position and power doesn't show our capability, but we need to have substance to prove our competence and efficiency. No doubt we have brains, we just need them to work together for our development. It us high time to hold hands with each other and make our way to the top in the aviation industry