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Jet Airways to fly again by the end of year 2021 – Aviation Sector in India

Jet Airways to fly again by the end of year 2021 – Aviation Sector in India

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  • GS 3 || Economy || Infrastructure || Transportation

Why in the news?

Two years after Jet Airways at the time India’s second-largest full-service airline halted operations in 2019 as it ran out of cash, the carrier has a real chance at getting airborne again.

Understanding all about aviation sector:

What is aviation sector?

Aviation is the activities surrounding mechanical flight and the aircraft industry. Aircraft includes fixed-wing and rotary-wing types, morphable wings, wing-less lifting bodies, as well as lighter-than-air craft such as hot air balloons and airships.

 History of aviation sector:

  • In the year 1911 first commercial plane was started in India, first plane flew between Allahabad to Naini.
  • As a result, India’s civil aviation industry was born. On that auspicious day, Henry Piquet flew a Humber biplane from Allahabad to Naini, covering a distance of about 10 kilometers.
  • With the partnership of Indian state air services and UK-based imperial airways, the first international flight to and from India was inaugurated in December 1912 over the route London-Karachi-Delhi.
  • In Cochin, Kerala, the country’s first private airport opened in 1998; 1990 was also a watershed year for Indian civil aviation and Air India, as the airline set a Guinness World Record for the largest evacuation effort by a single civilian airline when it flew over 1,11,000 people from Amman to Mumbai in 59 days and 488 flights, just before the Gulf War broke out.
  • Following the abolition of the Air Corporation Act in 1994, private airlines were allowed to run scheduled routes, and Jet Airways, Air Sahara, Modiluft, Damania Airways, NEPC Airlines, and East West Airlines were among the first to do so.
  • With over 82 operating airports, almost 735 aircraft, 12 operational scheduled airlines, and 121 non-scheduled operators, India is now the world’s 9th largest aviation market. This year, the number of air travelers in India is anticipated to surpass 50 million.

Objectives of India aviation sector :

  • Make flying more affordable so that domestic ticket sales may rise from 103.75 million in 2016-71 to 300 million by 2022. 2
  • Increase air freight handling from 3.3 million tonnes in 2017-18 to 6.5 million tonnes in 2018-19.
  • Increase the maintenance, repair, and overhaul (MRO) sector from USD 1.8 billion to USD 2.3 billion in 2017.
  • Increase airport capacity by more than five times in order to handle one billion annual trips.
  • Through the Regional Connectivity Scheme – Ude Desh Ka Aam Naagrik,(RCS-UDAN)increase the availability and cost of regional air connectivity and revive/upgrade 56 underserved airports and 31 underserved helipads .
  • Ensure that airport tariffs, fuel taxes, landing fees, passenger services, cargo fees, and other fees are established in a timely, equitable, and transparent way.

Factors for development of aviation sector in India:

  • India’s weather conditions are also quite favorable for aviation travel. Air travel is hampered by poor visibility caused by clouds, fog, and mist, although India is fortunate to enjoy clear weather for the majority of the year, save for a brief period during the rainy season.
  • India’s geographic center, with Europe and West Asia on one side and South East Asia and East Asia on the other.
  • India’s vast plains provide excellent landing places.
  • Due to India’s huge size, there is a strong need for airways.

Challenges associated with aviation sector in India:

  • Issues with the past: Historically high operational costs that can no longer be supported in the current environment.
  • Infrastructure issues: One of the most significant hurdles to the airline sector is the absence of appropriate airport infrastructure. One important concern is that the expansion of aviation infrastructure has not kept pace with the increase in flight traffic. A serious issue the aircraft fleet available for domestic or foreign destinations is quite limited. Congestion in terminals, runways, and the air has resulted in a worsening customer experience as well as an increasingly inefficient and costly operating environment for airlines.
  • Rupee Devaluation: The recent depreciation of the rupee has harmed the aviation sector. Dollars account for about 25-30% of flight costs (excluding fuel). For example, aircraft leasing rentals and maintenance expenditures, as well as ground handling and parking fees in other countries.
  • Financial situation: Despite being one of the world’s fastest expanding aviation industries, India’s airlines have been losing money. According to the Centre for Asia Pacific Aviation, India’s unified airline sector would lose $1.65 billion to $1.90 billion in the fiscal year ending March 2019. It had previously predicted a $430 million to $460 million loss.
  • Security: According to a 2016 study by a department connected to the Parliamentary Standing Committee on Transport, Tourism, and Culture, 27 operational airports in the nation are safeguarded by forces other than the Central Industrial Security Force, which prompted serious concerns (CISF). The committee was told that the CISF will not be deployed at the remaining airports due to a shortage of funds.
  • Regulation: The aviation industry is widely seen as being too regulated. The DGCA, through which the Central government exerts its jurisdiction, has an excessive concentration of power. According to opponents, this has a negative impact on the aviation industry’s competitiveness and viability.
  • Aviation Turbine Fuel (ATF): One of the most important factors affecting the cost of air operations is the international price of ATF. Furthermore, India’s high state tax on ATF makes it one among the most costly in the world. ATF accounts for approximately 40% of the overall cost for airline firms, compared to the global average of 20-25 percent.
  • Competition: The introduction of low-cost carriers (LCCs) causes premium airlines’ market share to dwindle. To counteract the loss of market share, premium airlines were compelled to lower their rates, which resulted in a pricing war among the airlines, possibly jeopardizing the carriers’ financial survival.

Initiatives for the development of aviation sector:

  • Udan Regional Connection Program:
    • This is a regional airport development and regional connectivity scheme with the goal of “allowing the country’s ordinary citizens to fly.”
    • The plan seeks to make air travel more inexpensive and ubiquitous in India’s many regions and states, as well as to promote inclusive national economic growth.
    • In the first round of the UDAN-RCS, five airlines were granted 128 fixed-wing aircraft routes to 70 locations.
    • The scheme’s first component seeks to build new airports and improve existing regional airports in order to bring the total number of operating airports to at least 150. The second component intends to create a number of financially feasible, capped-fare new regional aircraft routes that will connect over a hundred underserved and unserved airports.
  • Open Sky policy:
    • The term “open sky policy” refers to a treaty between two countries that enables any number of airlines to travel between them with no restrictions on the number of seats, flights, destinations, or pricing.
    • India and the United States currently have an open sky policy with no restrictions. India has a limited open sky agreement with ASEAN countries and a limited arrangement with the United Kingdom.
    • The National Civil Aviation Policy proposes removing limitations on the number of flights between SAARC nations and countries within a 5000-kilometer radius.
  • Digi Yatra:
    • Digi Yatra is an industry-led project managed by the Ministry of Civil Aviation with the goal of providing travelers with a digital experience via a digital platform.
    • It allows travelers to be processed digitally at the airport using a face recognition technology at checkpoints such as entrance point check, security check, and airplane boarding.
    • The project seeks to make paperless travel easier and eliminate additional identity checks.
  • Aviation conclave 2019:
    • The Ministry of Civil Aviation hosted the aviation conclave 2019 with the subject “Flying for All” to determine the future of the Indian aviation sector.
    • The goal of the conclave is to bring together industry executives, government officials, and regulators to set the tone for achieving the “Vision 2040” goals.

What more can be done to improve the aviation sector?

  • Improve aviation infrastructure: The capacity of the infrastructure in the ten busiest airports (in terms of traffic) should be greatly increased. While auctioning transportation rights, measures for domestic hub growth must be included.
  • Encourage investment in the industry by providing financial and infrastructure support: Lower MRO taxes and propose giving MRO infrastructure status. Increase non-aeronautical revenues by monetizing empty real estate near AAI airports in all key traffic hubs.
  • Address the lack of trained labor: Encourage collaboration between original equipment manufacturers (OEMs), industry, and educational institutions to educate the most up-to-date concepts in the aviation sector, such as management principles, aviation information technology, and so on.
  • Ease the regulatory environment for airports: Deregulate the aviation industry even more and open it up to enable India to grow passenger and freight traffic. FDI in the aviation sector that exceeds 49% currently requires government permission.
  • Make aviation safety a top priority: Focus on avoiding and averting accidents and problems. Violations of safety should be treated with zero tolerance. For an efficient aviation safety monitoring system, the DGCA should be allowed authority. It should also be able to levy fines and punishments based on the nature of the offense. The DGCA should establish a single-window system for all transactions, questions, and complaints relating to aviation.

Conclusion:

India would be well positioned to accomplish its objective of being the largest aviation market, with the proper regulations and a constant focus on quality, cost, and passenger interest. The true success, however, will be realized only when every area in the country is connected to the air grid and the average man can access and afford it.

Mains oriented question:

Examine the problems that India’s civil aviation sector is facing. Also, talk about how to take advantage of this industry’s enormous potential in India’s growth narrative. (200 words)