The
nationalized Indian aviation industry has been opened
to private players in the early 1990s. With the world
becoming a global village the aviation sector is bound
to grow. The fact is reflected in the increase in number
of air kilometers flown and Passenger-Km flown. The
government policies have a definite effect on the aviation
industry. India's civil aviation industry once comprised
the two national carriers, Air-India (AI) and Indian
Airlines (IA). After the privatization about 20 private
operators took to the skies. But they became victims
of high import duties on spares and fuel and low passenger
demand leaving a few survivors. Jet Airways (JA) and
Sahara Airlines (SA) are the two significant survivors.
These private players have initiated price wars and
new marketing strategies to lure the increasing number
of customers.
The
growth pattern in the number of passengers carried can
be taken as a parameter to study the trends in Indian
aviation industry. Domestic and international passenger
traffic in India is projected to grow around 6.6% yoy
and 4.4% yoy respectively in the period 2002-03. Over
the past few years, IA has lost its market share and
passengers. Its market share has fallen from 95.1% to
57.1% over the decade 1992-2002. The major gainers are
the two domestic operators JA and SA, with JA benefitting
most. In terms of plant load factor too, IA lags behind.
While the average for all domestic operators was around
63.4%, IA clocked a performance of 61.9%. JA had the
highest plant load factor of around 71.8%. Various reasons
can be cited for the above facts. A survey shows private
airways have performed better in terms of behavior of
check-in counter and flight attendants, punctuality,
food quality etc.
Before
the privatization, IA had a monopoly in the aviation
sector. However, after 1993, when the skies were opened
for private participation JA and SA has dominated the
sector recently Crown Express, promoted by Neera Radia,
got an approval from the government to start domestic
operations. Of the total investment of Rs.1.11 bn, 60%
will be brought by family and friends, and the rest
from FIIs and Venture Capital Funds. Modiluft, re-entering
as Royal Airways, proposes to come out with a public
issue to raise funds from the public. |
