General Aviation Industry

Y.K.Sinha

Rajalakshmi Engineering College

AIR TRANSPORTAION AND AIRCRAFT MAINTENANCE (AE1012)

Civil AviationCivil aviation is one of two major categories of flying, representing all non-military aviation, both private and commercial. Most of the countries in the world are members of the International Civil Aviation Organization (ICAO) and work together to establish common standards and recommended practices for civil aviation through that agency.Civil aviation includes two major categories:– Scheduled air transport, including all passenger and

cargo flights operating on regularly-scheduled routes; and

– General aviation (GA), including all other civil flights, private or commercial

DefinitionGeneral aviation covers a huge range of activities, both commercial and non-commercial, including private flying, flight training, air ambulance, police aircraft, aerial firefighting, air charter, bush flying, gliding, and many others. Experimental aircraft, light-sport aircraft and very light jet have emerged in recent years as new trends in general aviation.

Regulation and Safety

Most countries have authorities that oversee all civil aviation, including general aviation, adhering to the standardized codes of the International Civil Aviation Organization (ICAO). Examples include the Federal Aviation Administration (FAA) in the United States, the Civil Aviation Authority (CAA) in Great Britain, the Luftfahrt-Bundesamt (LBA) in Germany, Transport Canada in Canada, and Director General of Civil Aviation (DGCA) in India.

Indian Aviation

Directorate General of Civil Aviation

• Directorate General of Civil Aviation is an attached office of the Ministry of Civil Aviation.

• The Directorate General of Civil Aviation is the regulatory body in the field of Civil Aviation primarily dealing with safety issues. It is responsible for regulation of air transport services to/from/within India and for enforcement of civil air regulations, air safety and airworthiness standards. It also co-ordinates all regulatory functions with International Civil Aviation Organization.

• The headquarters are located in New Delhi with regional offices in the various parts of India.

• There are 14 (fourteen) Regional Airworthiness Offices located at Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Trivandrum, Bhopal, Lucknow, Patna, Bhubaneshwar, Kanpur, Guwahati and Patiala.

Air Traffic

The Airport Authority of India (AAI) manages total 122 Airports in the country, which include 11 International Airports, 94 domestic airports and 28 civil enclaves.  Top 5 airports in the country handle 70% of the passenger traffic of which Delhi and Mumbai together alone account for 50%.  Passenger and cargo traffic has growth at an average of about 9% over the last 10 years.

GrowthIndia's civil aviation passenger growth, presently at 20 per cent, is one of the highest in the world, and is expected to surpass countries like China, France and Australia. By 2020, 400 million Indian passengers are likely to be airborne. 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. Indian carriers currently have a fleet size of 310 aircrafts, but have 480 aircrafts on order, scheduled for delivery by 2012. The scheduled domestic air services are now available from 82 airports as against 75 in 2006.

• India is the 9th largest aviation market in the world. According to the Ministry of Civil Aviation, around 29.8 million passengers traveled to/from India during 2008, an increase of 30 per cent on previous year. It is predicted that international passengers will grow upto 50 million by 2015. Further, due to enhanced opportunities and international connectivity, 69 foreign airlines from 49 countries are flying into India.

• Domestic airlines flew 3.67 million passengers in August 2009, as against 2.92 million in the corresponding period last year—an increase of 26 per cent.

Major Investments

• Tata Advanced System Limited (TAS), a unit of the Tata Group, will 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. Further, the company has formed a joint venture with US-based Sikorsky Aircraft to make aerospace components in India.

• US aircraft maker, Boeing Co, will deliver 100 planes worth US$ 17 billion over the next four to five years to India.

• Changi Airports International is ready to enter into joint ventures with more Indian companies in developing airports. The company, which has picked up a 26 per cent stake for US$ 20 million in Bengal Aerotropolis Pvt Ltd (BAPL) is looking at other opportunities.

• State-owned aerospace firm Hindustan Aeronautics Limited (HAL) has signed an agreement with Boeing to supply flaperons for the Boeing's 777 series commercial jetliners. It is understood that HAL will supply 600 units of flaperons to Boeing which will be delivered in phases by 2019.

• European passenger plane maker Airbus SAS will move 20 per cent of its engineering and design activities to low-cost countries, a majority of it to India, by 2012.

Road Ahead

• Passenger traffic is projected to grow at a CAGR of over 15 per cent in the next 5 years.

• The government plans to invest US$ 9 billion to modernise existing airports by 2010.

• The Vision 2020 statement announced by the Ministry of Civil Aviation, envisages creating infrastructure to handle 280 million passengers by 2020.

• Investment opportunities of US$ 110 billion envisaged up to 2020 with US$ 80 billion in new aircraft and US$ 30 billion in development of airport infrastructure.

• Associated areas such as maintenance, repair and overhaul (MRO) and training offer high investment potential. A report by Ernst & Young says the MRO category in the aviation sector can absorb up to US$ 120 billion worth of investments by 2020.

• Aerospace major Boeing forecasts that the Indian market will require 1,000 commercial jets in the next 20 years, which will represent over 3 per cent of Boeing Commercial Airplanes’ forecasted market worldwide. This makes India a US$ 100 billion market in 20 years.

History of Indian Aviation

• The history of civil aviation in India started with its first commercial flight on February 18, 1911. It was a journey from Allahabad to Naini made by a French pilot Monseigneur Piguet covering a distance of about 10 km.

• The first domestic air route between Karachi and Delhi was opened in December 1912 by the Indian State Air Services in collaboration with the Imperial Airways, UK as an extension of London-Karachi flight of the Imperial Airways.

• The aviation industry in India gathered momentum after three years with the opening of a regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Ltd.

• At the time of independence nine Air Transport Companies were operational in the Indian Territory

• With an attempt to farther strengthen the base of the aviation sector in India, the Government of India together with Air India (earlier Tata Airline) set up a joint sector company, Air India International, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, Air India started its journey in the Indian aviation sector on June 8, 1948 in Mumbai (Bombay)-London air route.

• Nationalization of Indian Airlines (IA) in 1953 brought the domestic civil aviation sector under the purview of Indian Government. Government's intervention in this sector was meant for removing the operational limitations arising out of excess competition

• Air transportation in India now comes under the direct control of the Department of Civil Aviation, a part of the Ministry of Civil Aviation and Tourism of Government of India.

• All airlines operating in the country were merged into either Indian Airlines or Air India and, by virtue of the Air Corporations Act, 1953; this monopoly was perpetuated for the next forty years.

• The Directorate General of Civil Aviation controlled every aspect of flying including granting flying licenses, pilots, certifying aircrafts for flight and issuing all rules and procedures governing Indian airports and airspace.

• The Airports Authority of India was entrusted with the responsibility of managing all national and international air ports and administering every aspect of air transport operation through the Air Traffic Control.

Open skies policy

Need for Open Skies Policy

A recurring demand often voiced by interested parties is that, in order to promote Travel & Tourism, India should adopt an Open Skies policy. It is argued that the current policy restricts the access of foreign airlines. As a result potential tourists are not offered a choice of airlines or seats when travelling to India. This problem is exacerbated during the holiday season when it is difficult, if not impossible, to get a seat either into the country or out of it. It is argued, therefore, that India should adopt an Open Skies approach to any foreign carrier wanting to fly into India, which literally means allowing them unlimited service, capacity and points of call.

Meaning of ‘Open Skies’

• Open Skies means unrestricted access by any carrier into the sovereign territory of a country without any written agreement specifying capacity, ports of call or schedule of services. In other words an Open Skies policy would allow the foreign airline of any country or ownership to land at any port on any number of occasions and with unlimited seat capacity. There would be no restriction on the type of aircraft used, no demand for certification, no regularity of service and no need to specify at which airports they would land.

• Defined in this manner, it is not surprising that Open Skies policies are adopted only by a handful of countries, most commonly those that have no national carriers of their own and that have only one or two airports.

Civil Aviation Policy in India • In the context of a multiplicity of airlines, airport

operators (including private sector), and the possibility of oligopolistic practices, there is a need for an autonomous regulatory authority which could work as a watchdog, as well as a facilitator for the sector, prescribe and enforce minimum standards for all agencies, settle disputes with regard to abuse of monopoly and ensure level playing field for all agencies.

• The CAA was commissioned to maintain a competitive civil aviation environment which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country

Objectives of Civil Aviation Ministry

a)  To ensure aviation safety, securityb)  Effective regulation of air transport in the country in the liberalized environmentc)  Safe, efficient, reliable and widespread quality air transport services are provided  at reasonable pricesd)  Flexibility to adapt to changing needs and circumstancese)  To provide all players a level-playing fieldf)   Encourage Private participationg)  Encourage Trade, tourism and overall economic activity

and growth h)  Security of civil aviation operations is ensured through

appropriate systems, policies, and practices 

SWOT analysis

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project

SWOT of legacy carriers

Strengths

• Passengers will continue to need connecting/network services

• Ensure a leisure travel, especially to the business traveller, like airport lounges

• Enhanced in-flight service and more comfortable seating

Weakness• Excess capacity• Complicated flight operations. Hub-and-spoke

networks of legacy carriers were profitable as long as LCCs had low service along heavily travelled routes.

• Mounting debt – Enormous debt to investment ratio (above  90% for most US legacy carriers like US, DL, AA, UL, CO) compared to LCCs (25% for Southwest)

• Cost-to-revenues ratio per seat mile is very high (>13) compared to Southwest’s 7.67

The hub-and-spoke distribution paradigm (or model or network) is a system of connections arranged like a chariot wheel, in which all traffic moves along spokes connected to the hub at the center

Opportunities

  Maintain short-haul flights only to extent needed to feed the network

Threats• Labour problems as “legacies” try to streamline

in order to compete with LCCs• Flood of new capacity into the region from LCCs

may trigger a competitive bloodbath among the legacies.