Escolar Documentos
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January 2012
Contents
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The Vision Aviation industry in India: challenges and key enablers 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 Airports Airlines Air Cargo Maintenance, Repair and Overhaul (MRO) General Aviation (GA) Slot Policy Aviation Training Infrastructure FDI by foreign carriers in Indian aviation Hub policy Airspace Management and Flexible Use of Airspace (FUA) Air Traffic Flow Management (ATFM)
3 4 4 4 4 5 5 5 6 6 6 7 7 8
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1 The Vision
The Indian civil aviation industry is proudly celebrating 100 years of its existence. The 11 th Plan has propelled the Indian aviation sector on a high growth path. Both passenger and cargo traffic have shown robust growth and there has been modernization and augmentation of capacities, in a major way, at various metro and non-metro airports. In FY 11, India has already made its place among the 10 largest aviation markets of the world. There is need now to consolidate the gains and further increase the air travel penetration in India. Under this backdrop, the vision for Indian civil aviation industry for the new civil aviation policy period should be:
To handle more than 300 million passengers and propel India among the top three civil aviation markets in the world by 2020
In order to facilitate this significant growth potential, India will need more airports, higher capacity, supporting infrastructure, finance and human resources. All this would require progressive policies and collaborative approach between the government, industry and the public at large.
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2.1 Airports
The growth in the passenger and cargo traffic requires significant investments in terms of construction of new airports, expansion and modernization of existing airports, improvement in connecting infrastructure (road, metro, sea link, etc.) and better airspace management. The passenger handling capacity has risen two-fold from 72 million (FY 06) to 143 million (FY 11)1. Notwithstanding this growth, there are challenges facing this sector and initiatives are needed to make India a leading hub for passenger traffic. Key enablers to achieve the projected growth are as follows: a) Allow no-frills airport model to lower the fixed cost of airport development and improve the financial viability of tier II/III airports b) Enable stable, transparent, predictable and investor-friendly regulatory regime with a mechanism for time-bound resolution of issues c) Upgrade Air Traffic Control (ATC) infrastructure and allow all weather operations including night landing facility at Indian airports, to provide impetus to tourist traffic d) Introduce fiscal incentives and innovative funding solutions are needed to overcome the funding constraints, being faced by airport operators
2.2 Airlines
Airline landscape has changed dramatically during the past decade. Indian carriers catered to 54 million domestic and 13 million international passengers in FY 20112. The last few years saw an increasing trend among domestic carriers to embrace the Low Cost Carrier (LCC) model. In spite of this enormous growth, the Indian carriers incurred operational losses of more than Rs. 20,000 during the last three years3. Some key enablers that can facilitate the growth are as follows: a) Rationalize ATF charges with international benchmarks thorugh policy changes b) Connect less lucrative Tier II/III cities through government incentives c) Allow more Indian carriers to fly overseas by utilizing full quota of bilateral agreements
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Source: AAI Source: DGCA 3 Source: Annual report of the air carriers 4 Source: AAI
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d) Make suitable amendments in EDI ver. 1.5 for efficient information flow between different stakeholders
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and secondary trading mechanisms (barter or inter-airline trading), rather than through purely administrative criteria. Indian airports should also consider the current slot mechanism and move towards market determined process.
e) Consider the option of allowing private players to set up ATCO training facilities, subject to adequate supervision by AAI. This may be started in a PPP mode first and thereafter be made fully open to private sector in the long run. f) Addressing the shortage of aircraft engineers, technicians and cabin crew through opening more number of institutes offering courses related to aerospace engineering and cabin crew. Options of collaborating with the Indian Air Force to build capacity should be explored.
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a) Enable an open bilateral regime to stimulate competition and traffic growth as shown by the global hubs of Singapore and Dubai. It can be instrumental in bringing down the overall cost of travel and promoting economic growth. b) Initiate broader partnership involving alliance partners, regulators, airport operators and local authorities to overcome the hurdles. c) Embark on a marketing overreach program by attracting airlines and freighters to set up base in India.
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Create an Aviation Infrastructure Development Fund (AIDF) to develop aviation infrastructure in tier II / III cities Bring immediate parity with global ATF prices, to start with at the metro airports Increase supervision on pricing policy by certain carriers, to bring relief to the airline sector Allow easier access to global routes by Indian carriers for increase their yields Enhance Air Traffic Management infrastructure and technology Create duly empowered Air Cargo Promotion Board (ACPB) to fix quality of service and responsibility of each of the stakeholders Develop world class National Aviation Academy through PPP, for creating pool of skilled manpower to cater to projected aviation growth
Allocate slots through market mechanisms, including alternative primary trading (egg, auctions) and secondary trading mechanisms ( barter or inter-airline trading)
Enable an open bilateral regime to stimulate competition and traffic growth and make India a regional aviation hub Introduce Flexible Use of Airspace (FUA) through segregating different types of traffic by airspace organization Operationlise Centralized ATFM system to optimize the capacity vs. demand to ensure regulated flow of traffic to minimize delays and congestion
The government, industry, mass media and the people at large need to work together to address the various opportunities and challenges. With the right vision, roadmap, policies, regulatory framework and a relentless focus on quality and cost, India would be well set to claim its rightful place in the global civil aviation industry.
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2012KPMG International Cooperative (KPMG International), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.KPMG International provides no client services. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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