Indian Aviation sector in the post-liberalization period can be divided into two phases: 1992 - 99, when six major private airlines took to the sky and post-2000 - witnessing a new breed of airlines jostle for their share of the sky. In 1992-93 the entry of new players in Indian Civil Aviation Industry was facilitated because of change in environmental factors. Two of the most important changes were: deregulation for private sector and the relaxation in rules regarding fleet size. Banking on them, many players, backed by NRIs, jumped into the fray. A majority of these players had a start up project as little as Rs. 50-60 cr, for it was not mandatory for the operators to own the fleet. Additionally, these ventures had neither the experience nor concrete business models (considered essential for running an aviation company successfully). As a consequence, a large percentage of these companies collapsed. Out of six major airlines that took off (in all 17 airlines) only two survived. The remaining left behind huge liabilities to oil companies and the Airport Authority of India. In the second phase of post-2000, there are as many as 10 players that have already started operations in the domestic sector of the country.
The
promise and the potential of the Indian aviation market
are awesome. By 2010, India's fleet strength will stand
at 500-550; the domestic market size will cross 60 million
and international traffic 20 million. Airbus pegs India's
demand for airliners at 1,100 aircraft, worth $105 bn, over
the next 20 years. According to Civil Aviation Minister
Praful Patel, the country will need 1,000 passenger planes
in 10 years, up from 260 now. The Centre for Asia Pacific
Aviation (CAPA) projections show India as potential ten
airline market, consisting of two-three Full Service Carriers
(FSC), two-three large national Low Cost Carriers (LCC)
operating a fleet of more than 70 aircraft each, and three-four
niche regional operators with aircraft less than 80 seats. |
