INDIAN AVIATION INDUSTRY CURRENT CHALLENGES AND OPPORTUNITIES

COVENTRY UNIVERSITY LONDON CAMPUS APS-PROFESSIONAL AND ACADEMIC SKILLS ASSIGNMENT 4

NAME: VINITHA R
STUDENT ID: 5216846
COURSE: MBA Global Business
DATE: 28/02/2014
SUBJECT: APSLON

EXECUTIVE SUMMARY: Aviation plays a vital role in nation’s economic growth. This is an industry which consistently contributes the growth of GDP and provides employment massively. In this study I have found out the challenges faced by the industry and the opportunities raised on aviation industry. INTRODUCTION: The aviation industry in India has the rapid growth in the world with private airline acquiring more than domestic aviation. There are huge annual growth rate of airport and airstrips along with the domestic aviation .The Government have offered many steps in order to develop the growth of the industry players. The Government aim is to change the industry to more equality and investment of social atomosphere.The government added a lot of new airports and converted Morden airports for the country. It also improved the policies which provide eventual opportunities. In the aviation Industry there are also severe challenges faced by the air carriers in order to survive in the marketing industry. Though there are a lot of new entrants entered the industry they were unable to compete and eventually withdrawn them from the industry. They also met heavy debts and financial crisis Players in Indian aviation industry can be classified into three groups: Public players: Air India, Indian Airlines, Alliance Air. Private players: Jet airways, Air Sahara, Spice jet, Air Deccan. Start-up players: Planning to enter the market some of them are Omega Air, Magic Air, and Premier Star Air and MDLR airlines. Types of Indian aviation sector: There are three major divisions in Indian aviation sector 1. Scheduled Air transport services- It has domestic and International services. 2. Non- Scheduled Air transport services- It specifies operating services. 3. Air cargo services- supports cargo and mail transport services.

CHALLENGES 1.Fuel prices in hike: In past several years, there is a hike in the oil industry. There remains a consistent growth in the fuel prices constantly. The Indian operators have the highest operating costs when compared to the other parts of the world operators. 2 .Increase in airport charges: The airport charges are higher when compared to other countries. The AERA has approved that the charges are at peak level and Indian aviation is the world’s most expensive airports. 3.Tax for services: The service tax of air fare in India is about 13.46%. The aviation industry constantly allows third party for food services, ticket section, and maintenance of aircraft. The service tax in the economy should be in the fixed based system so that the percentage of other factors will automatically increase to the standard level in most of the sectors. 4. Lack of proper infrastructure: There is no proper infrastructure to land the airspace and that grows as another barrier for the aviation sector in India. As per the technology development systematic operations and other facilities that support aircrafts should be added. At airports aircrafts cannot be landed at peak hours and without that services passengers are passed through the same facilities and ending up of overcrowding at the same terminal.

OPPORTUNITIES WAY OUT AVIATION 1.Air transport rapid productivity The largest economic advantage factor depends on air transport which beneficially provides long-term performance in the economic growth which indulges the overall productivity. There are two major factors of aviation sector across the productivity. - Domestic steady rise in the foreign markets. - Foreign competition rise in the Indian market. 2. Innovation thinking Air carriers technology have a advanced vast field industry involved in the creative research and innovation inside sectors will provide very efficient technology and which in turn will increase marketing benefits. It also reaches the build research capabilities in Universities and skills across the society. 3. Improved connectivity: -opening of new markets will increase the competition among the domestic air transport. We can also specialise in particular areas by comparing with the foreign markets with the advantage. - opening up of new domestic markets to the foreign competitors can automatically drives reduction of the production prices, by adapting them towards production and method in management or motivate them for the innovative ideas. - The prices and costs will be low that is one of the benefits for the domestic consumers.

CONCULSION To summarize the view of the current factors that affects the economy. The industry should look in to the business factors in order for the growth of aviation industry rather than prices factors and competitors. The government should take part in aviation industry to bring up with motivational measures to reduce taxes, setting up of proper infrastructure. REFERENCES http://www.indianaviationnews.com/indian-aviation-newsdetails.asp?NID=1205&PID= “Indian Aviation News” http://www.hindustantimes.com/business-news/with-aviation-sector-in-crisis-mode-india-s-airlines-bleed-away/article1-1161328.aspx- aviation sector in crisis mode Jan 24 2012, Nathan Economic Consulting Pvt Ltd India, “Research on Civil Aviation Sector in India”