Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 3.5
Article rating: 5.0
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 5.0


Regional routes power India’s Civil Aviation sector

Author: IANS/Friday, December 22, 2017/Categories: Aviation

Regional routes power India’s Civil Aviation sector

By Rohit Vaid 

New Delhi, Dec 22 – India’s civil aviation sector soared in 2017 as passenger traffic continued to rise on the back of more regional flights and higher disposable income levels.

Addressing industry chamber Ficci's 90th AGM here earlier this month, Prime Minister Narendra Modi said his government's policy reforms had resulted in an equitable and inclusive growth for the sector.

"In the aviation sector, we have brought in policy changes that have enabled even a ‘hawai chappal' (slipper)-wearing person to avail the benefits of air travel. We have brought this type of change," Modi said.

Besides augmenting passenger traffic growth, the Rs 2,500-an-hour flight services launched under the regional air connectivity -- UDAN -- scheme also expanded the country's aviation infrastructure.

In the first phase, contracts to five companies were awarded to operate flight services on 128 routes to 70 airports. Till recently, RCS-Udan operations to 13 airports had commenced, with an additional 12 ready to receive flights.

Apart from enhanced services to non-metro cities, the sector has also benefited from the rise in domestic disposable income levels and lower jet fuel prices, all of which accelerated passenger traffic growth in 2017.

According to the latest data from the Directorate General of Civil Aviation (DGCA), passenger traffic during January-November 2017 zoomed 17.27% to 105.9 million.

The rise in passenger traffic aided airlines to post healthy quarterly figures and also place new aircraft orders in anticipation of future growth.

The government, however, did not see the same logic working in favour of debt-ridden Air India.

The Union Cabinet, in a momentous decision, mandated the formation of an "Air India -- Specific Alternative Mechanism" headed by Finance Minister Arun Jaitley to look into the strategic divestment of the airline.

Among the potential bidders, budget passenger carrier IndiGo evinced interest in buying the airline's international operations and its subsidiary Air India Express.

In addition, aviation industry majors SATS, Bird Group and Celebi have shown interest in buying Air India's ground handling unit.

Currently, the airline is under a massive debt burden of Rs 50,000 crore, and had posted an operating profit of Rs 105 crore in 2015-16.

The year also saw some very low points, especially with frequent clashes erupting between passengers and crew. These rare, but disturbing incidents forced the airline industry to even debar individuals, including MPs, from using their services.

Consequent to the frequent on-board misbehaviour, the government constituted a "No-fly" list which bans erring passengers from availing flight services for a minimum of three months to two years in certain cases.

The mechanism categorises unruly behaviour into three bands: Level 1 -- unruly behaviour (verbal); Level 2 -- unruly behaviour (physical); and Level 3 -- life-threatening behaviour.

It also mandates a different quantum of ban defined in terms of the level of offence: Level 1 -- up to three months, Level 2 -- up to six months; and Level 3 -- a minimum period of two years or more without limit.

On-ground friction was also witnessed, as airport operator DIAL had a hard time to convince its tenants -- IndiGo and SpiceJet -- to shift some of their operations out of Terminal-1, so that the facility could be expanded further.

The law suit ended in DIAL's favour with IndiGo given time till February 15, 2018, to shift a part of its operations to Terminal 2.

The DIAL had earlier directed IndiGo, SpiceJet and GoAir to relocate their operations in "parts" and split their operations by shifting flights to and from some sectors, namely Mumbai, Kolkata and Bengaluru, to T2 with effect from January 4, 2018.

It also said that the capacity of the three airlines to and from the three sectors would amount to around eight million persons per annum and shifting those to T2 would considerably reduce the burden on T1.

GoAir has since shifted its entire operations to T2.

Print Rate this article:
No rating

Number of views (211)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free