INTRO

HISTORY OF AVIATION SECTOR:

Aviation in India, broadly divided into military and civil
aviation, is the fastest-growing aviation market in the world
(IATA data) and Bangalore with 65% national share is the
largest aviation manufacturing hub of India. UDAN
scheme is driving the growth of civil aviation connectivity
and infrastructure in India.
On 18 February 1911, the first commercial civil aviation
flight took off from Allahabad for Naini over a distance of 6
miles (9.7 km) when Henri Pequet, a French aviator,
carried 6,500 pieces of mail on a Humber biplane from the
exhibition to the receiving office at Allahabad which was
the world's first official airmail service. On 15 October
1932, J.R.D. Tata flew a consignment of mail from Karachi
to Juhu Airport, an air
DEVELOPMENT OF AVIATION SECTOR IN INDIA:
Just after independence, India had nine air transport
companies transporting both cargo and passenger traffic.
In 1953 the Indian government nationalized all the existing
airline assets. Indian Airline was set up to cater to the
domestic market, while Air India was set up to take care of
the International sector. Both Indian Airline and Air India
enjoyed monopoly over the Indian skies. Service was
poor, flights were often delayed and frequent travelers had
to face innumerous hardships. But the scenario changed
post liberalization.

BODY
ROLE OF GLOBALISATION IN THE IAS:
Globalisation is the phenomenon which has brought the
world together at one flat platform where there is an
apparent blurring of all differences in all aspects of
contemporary life ranging from social, cultural, economic,
political, life-styles etc. It is a remarkable phenomenon by
which many geographical and cultural barriers have come
down gradually and the entire world has become a global
village. It is the rapid expansion of communication and
transportation which has reduced distances and generated
an everlasting interdependence among people and
nations at all levels.
People around the globe argue that globalisation is the
way to increase relationship between the countries,
employment opportunities and exchange of cultures on
one hand.On the other hand anti-globalisation dispute
many multinational countries hire low-cost or cut-rate
labours from the developing countries and make use of
their skills and potentials to attain their business
intentions.
Globalization is an economic development platform
supported by three legs:
1) global security,
2) global finance and trade, and
3) global connectivity.

On 9/11, terrorists attempted to knock the legs out from

under the globalization process. Terrorists typically use
high-concept, low-technology methods when operating
their missions. Explosive-laden rafts strike a U.S. warship;
truck bombs attack embassies; hijacked civil aircraft kill
thousands. Such attacks are intended to drive the
globalization movement from their part of the world.

One of the unique aspects of the new global economy is a

public policy shift, primarily at the macro level, from
supporting less government intervention to encouraging
more private enterprise and, simultaneously, reducing
barriers to trade and investment. Since the 1970s many
countries have decided to remove restrictions on capital
flows.

Coupled with other domestic policies designed to promote

competition among firms, these types of market
liberalizations in trade and investment have helped reduce
costs to consumers and promote technological
innovation.
Connectivity is required in order for globalization to work.
Connectivity is driven by telecommunications, information
technology, and transportation of goods and people. In
today's new global economy, aviation is at the forefront:
Air cargo accounts for 42 percent of the value of today's
world trade but only 2 percent by weight. The Boeing
Forecast places world air cargo growth for the 20-year
outlook period at 6.2 percent and passenger growth at 5.2
percent annually for the same period, while world GDP is
forecast to grow at 3 percent.

Obvious aviation activities connected to globalization are

persons traveling for business on a commercial flight from
Chicago O'Hare to London Heathrow or a corporate jet
transporting business executives from Teterboro to
Frankfurt. There are, however, other activities that take
place in aviation that are less conspicuously connected to
globalization. A few examples:

-An MNC such as Honda may invest in a manufacturing

facility in your community through FDI. Honda executives
then travel to your community via corporate jets both
during and after construction. In Ohio, FDI comprised 11
percent of private investment for capital projects in 2003,
up from 8 percent in 2002 and 2001.

-In Cozad, NE, an agricultural sprayer applies pesticide to

wheat crops which, in turn, is sold to consumers in Japan.
The latter ranks second in U.S. wheat exports -- some 3.1
million metric tons in 2004. Apples and other produce
grown in Washington State are commonly shipped to
Japan by air.

LOW COST CARRIERS IN INDIA:

The airline business model of a low-cost carrier (LCC),
also known as no-frill/ budget carriers has played a very
important role to the growth of the airline industry since its
emergence in 1949. These low cost carriers have brought
great degree of increase in capacity and decrease in fares
into the industry. As per the study by Doganis (2006 2),
the operational cost of a low-cost carrier is only 49 percent
of a full service carrier’s operational cost .There are a few
strategies that low cost carriers adhere to offer low air
fares by achieving low operational costs, most strategies
focus on simplifying the business mode hence decreasing
labour costs; which takes up around 30 per cent of the
total operational costs for a full service airline. The table
below compares the products in general between full
service, charter and low-cost carriers; although not all
difference apply to all airlines in that category. Some major
characteristics of the LCCs are discussed later.(make the
table sent to maa)In 2015, the global aviation network
carried 3.5 billion passengers on 34 million scheduled
departures (preliminary figures). By 2030, current
projections suggest those numbers will nearly double.
Low-Cost Carriers have played a major role in this
extraordinary expansion of aviation over the past quarter
century, and there is every expectation that they will
continue to do so. Low-cost carriers carried 984 million
passengers in 2015, which was 28 per cent of the world
total scheduled passengers. This marked a 10 per cent
increase compared to 2014, which means Low-Cost
Carriers experienced a passenger growth rate that was
about one and a half times the rate of the world total
average passenger growth.
The following is a list of low-cost carriers organized by
home country. A low-cost carrier or low-cost airline (also
known as a no-frills, discount or budget carrier or airline) is
an airline that offers generally low fares in exchange for
eliminating many traditional passenger services. Regional
airlines, which may compete with low-cost airlines on
some routes, are listed at list of regional airlines.
Air India Express
AirAsia India
GoAir
IndiGo
SpiceJet
Competitive Strategies Implemented By Low Cost
Carriers In India
India, home to one-sixth of the world's population, is
quickly becoming one the world's economic engines. Its
bureaucratic and outdated regulatory policies have been
reformed resulting in a four-fold increase in the number of
scheduled airlines and a five-fold increase in the number
of aircraft operated. This study attempts to examine, in the
light of the competitive strategies adopted by the low-cost
model based on cost-leadership and product
differentiation that have been deployed by low-cost
carriers (LCC) in India. . In addition, this paper attempts to
review how the new regulatory roadmap has transformed
the supply of domestic air services in the Indian Aviation
industry.
Many surveys were conducted in the past to investigate
the acceptance of LCCs in India. In addition, it assessed
the sensitivity of passengers to a change in fare and which
factors or attributes would encourage them to distinguish
between LCCs. The study finds that there is immense
growth potential for LCCs in India on account of low fares
leading passengers to convert from rail to air traffic.
However, infrastructural bottlenecks leading to delays and
cancellations are hindering the mindset of current or
potential passengers. Hence, creating value by attaining
customer satisfaction and differentiation in product or
services offered is the most effective way for LCCs to gain
market share and, with time, be able to sustain it.
PUBLIC SECTOR AIRLINES
The public sector has traditionally owned and operated
domestic airports and national airlines. Airports have been
managed by either the civil aviation department or a
national government department with similar
responsibilities. Airlines have generally been operated as
state corporations. Other government agencies provide
services, for example, customs and immigration, and
private sector companies handle freight and passenger
services. These tasks are made more difficult because
most airports are located some distance from the city or
town they serve. This calls for a high degree of self-
sufficiency with secure utilities such as communications,
power and water. Managing these operations and
providing utilities within the constraints of the civil service
have led to inefficient ground operations and the closure of
many national airlines. Governments are now beginning to
create autonomous airports authorities and to open up
airline service provision to the private sector while
retaining responsibility for policy, regulations and overall
supervision.
MAJOR OPERATORS OF PUBLIC SECTOR AIRLINES:
•PSU: The PSU in Aviation sector are Air India and Pawan
Hans.
•Listed: Listed companies in India's aviation sector are Jet
Airways, IndiGo, and SpiceJet. GoAir is currently planning
for an IPO.
•Private: Major private players are IndiGo, SpiceJet,GoAir,
Air Asia and Vistara.
EXPANSION OF PRIVATE SECTOR AIRLINES:
Demand for air travel is increasing. IATA expects more
than seven billion passengers in 2035, an average growth
rate of 4.1% per annum and more than double 2014’s 3.5
billion passengers. With that growth comes the promise of
aviation having an even greater economic impact. “It is an
exciting prospect to think that in the next 20 years more
than twice as many passengers as today will have the
chance to fly,” says Tony Tyler, IATA’s Director General
and CEO.“Air connectivity on this scale will help transform
economic opportunities for millions of people. At present,
aviation helps sustain 58 million jobs and $2.4 trillion in
economic activity. By 2035, we can expect aviation to be
supporting 105 million jobs and $6 trillion in gross
domestic product (GDP).”In such a dynamic industry,
there is little doubt that aviation will encounter any number
of headwinds in the next two decades as it strives to fulfil
its economic potential. Some will be anticipated, many will
not.One that is already certain to blow hard against
aviation’s advances is airport capacity. In short, capacity
on the ground isn’t matching demand in the
sky.Bottlenecks are appearing and their stranglehold will
tighten as demand for air services grows. London
Heathrow, for example, operates at 99% capacity and has
done so for more than 10 years. There is precious little
room to breathe or recover from irregular operations—and
no room at all for extra flights until infrastructure is
improved or operational innovations implemented.Nor is
Heathrow in any way unique. Some 160 airports
worldwide use slot coordination, indicating a need to
manage capacity. A EUROCONTROL report from 2014
further supports the argument, noting a shortfall in
Europe’s ability to meet demand. The report says the most
likely scenario is that 1.9 million flights will go
unaccommodated by 2035, the equivalent of 120 million
people being unable to take a return trip. And each trip
that cannot be accommodated has an economic cost.

ANALYSIS BETWEEN PERFORMANCE OF PRIVATE

SECTOR AND PUBLIC SECTOR
1. Delays
Whenever I travel in Air-India express, I know that there is
going to be a delay for at least half an hour. No doubt.
When my travel agent says that your flight is at 4:00PM, I
immediately translate that as 4:30. And if that wasn’t
enough, the plane would land another half an hour late
(excluding the delay in the takeoff). So that is an hour of
delay.
However, IndiGo took off at dot 5:10 PM without a minute
of delay. I was impressed. And it landed at the right time
too. IndiGo brags a lot about its timing and stuff, but hey,
at least you’re at your destination on time.
2. Aircraft maintenance (which includes cleaning)
By aircraft maintenance, I don’t mean if the airlines
regularly check the air-worthiness of their planes or not.
Heck, nobody would even know if there’s a nut missing
here or a screw missing there. What we as passengers
notice, is the interiors. You CANNOT brag about a safety
record if you make a mess out of the interiors.
Air India express is dirt. Absolute junk. The windows look
like they haven’t been cleaned since YEARS. The interiors
look like they have been barfed on a kazillion times. If it is
your lucky day, it does not stink. If you think it would be
nice if you took pictures of the sunset from the plane’s
windows, forget it. You won’t be able to see a thing with
your bare eyes, let alone a camera.
IndiGo on the other hand is cleaned very well. The plane,
the seats, the windows, everything is clean and shiny.
They do not compromise on in-flight cleanliness. And that
is good. Very good. Nobody wants to fly in a flying pig-sty.

3. The crowd
Believe me, this is one of the most significant differences.
When I travelled in IndiGo, I noticed that most people were
businessmen with blackberry’s and laptops (I have never
seen so many blackberry’s at the same time). Not much of
conversationalists, but that’s okay. Its better to hear a
mouth shut than hear an idiot blabber.
Each time I travel in Air-India Express, there are at least a
dozen annoying kids with their parents doing absolutely
nothing to stop them. They run on the aisle of the plane,
shout, cry and make a big mess. The Airhostesses are
least bothered, the parents are least bothered and the rest
of the passengers suffer.

4. The food.
Let me ask you a question: Would you accept god-
forsaken food for free or would you rather stay hungry?
If your answer is the former, then Air-India Express is the
airline you must travel in. First of all, they talk as if they are
doing you a favour by giving you food for free. And when
they are doing this “favour”, the food is HORRIBLE. They
give you a day old cheese-sandwich, an oil soaked
samosa/pattice, a pack of cheap Lays SALTED chips, a
cupcake and mango juice. Holy piss-pot of god. Where am
I? Guantanamo?
IndiGo’s food is expensive. I will admit. It is very expensive
and definitely not worth the price they are for. But they are
tasty. They won’t kill you. Relish the food and enjoy the
flight. Yes, the thought of paying Rs.130 for a vegetable
sandwich may linger in your head. But hey, no torture.

5. The Airhostesses
They count. Seriously, they do. This is in a way a little
irrelevant. But definitely worth mentioning.
In Air-India Express, the airhostesses are pretty young,
but service is not that great. Its not like the Maharajah
mascot of Air India who welcomes all its “guests” on
board. Hospitality is not that great. They are dissatisfied
with their work. It is reflected in their service. Thank god
Air India had some major revamps. Otherwise, the
airhostesses used to be aged way beyond their shelf life.
Add meanness and rudeness to that and you get the
devil’s children serving you onboard. Even the fake smile
they give you when you enter the plane shows that they
hate being part of Air-India.
CONCLUSION
FUTURE OF AVIATION SECTOR:
The Future of Indian Aviation Industry is bright. As already
mentioned above, India is set to become one of the top
five aviation markets by 2020. The latest report on civil
aviation, reveals an all-round improvement in air traffic.
The number of passengers as also the volume of goods
and mails carried by airplanes during the period shows an
appreciable improvement over those of the last
decade.The Aviation sector is expected to witness huge
surge in investments from private sector players. The
number of aircraft is expected to touch 800 by 2020. The
low penetration ratio (0.04 per capita/p.a) provides
immense opportunity for investment in aviation
sector.Aviation being not only a very important form of
peacetime communication but also a vital part of the
defense organization, the State cannot remain indifferent
to its development along proper lines.This progressive
expansion may be expected to continue, and a time may
come, not at a very distant future, when aeroplanes will be
ever more popular, and become, the normal means of
communication. The idea of one world, therefore, may not
long remain an empty slogan but will be a concrete reality
in the foreseeable future.India has to rely on foreign
sources for the supply of crude petroleum. If India is to
develop aviation services as also other major industries,
she must be self-sufficient in fuel supply.In a vast country
like India, with very suitable weather conditions all the year
round, the possibilities of aviation are immense and the
Government may be expected to take suitable measures
for helping the growth of this important industry, so that it
may play its part in the all-round development which India
is planning for her people.