IN­DIAN AVI­A­TION AWAIT­ING MA­JOR LEAP

The Pres­i­dent of In­dia, Pranab Mukherjee, set the ball rolling for In­dia Avi­a­tion 2016 by talk­ing about the un­matched op­por­tu­ni­ties in avi­a­tion, un­like any other coun­try

SP's Airbuz - - Table Of Contents - BY R. CHANDRAKANTH

THE FIFTH EDI­TION OF In­dia Avi­a­tion, held from March 16-20 at Begum­pet air­port, Hy­der­abad, had many take-aways. For the first time In­dia Avi­a­tion was in­au­gu­rated by the Pres­i­dent of In­dia, Pranab Mukherjee, in a way en­dors­ing that In­dia has ar­rived in many sec­tors and avi­a­tion is dis­tinctly on the hori­zon. Though there were no big-ticket deal an­nounce­ments at In­dia Avi­a­tion, the pos­i­tive sen­ti­ments that pre­vail are enough to give wings to avi­a­tion here to get into the top three slots of avi­a­tion mar­kets, only af­ter China and the United States. Im­por­tantly, the Min­istry of Civil Avi­a­tion, un­der the lead­er­ship of P. Ashok Ga­jap­athi Raju has taken on its role as a fa­cil­i­ta­tor more se­ri­ously than any known regime. At Hy­der­abad this was clearly ev­i­dent as both the Min­is­ter and the Civil Avi­a­tion Sec­re­tary, R.N. Choubey un­am­bigu­ously men­tioned that the gov­ern­ment would help cre­ate an ecosys­tem for avi­a­tion not just to sur­vive but also thrive.

The Pres­i­dent set the ball rolling by talk­ing about the un­matched op­por­tu­ni­ties in avi­a­tion here, un­like any other coun­try. “In­dia is one of the fastest grow­ing economies of the world and is ex­pected to be amongst the top three man­u­fac­tur­ing des­ti­na­tions by 2020. The sta­ble and con­sis­tent poli­cies of the gov­ern­ment; favourable de­mo­graphic div­i­dends; grow­ing in­fra­struc­ture; sus­tained avail­abil­ity of low-cost skilled work­force and strong tech­ni­cal and engi­neer­ing ca­pa­bil­i­ties has made In­dia a favourable des­ti­na­tion for for­eign di­rect in­vest­ment. LEAST PEN­E­TRATED AIR MAR­KET. “It is heart­en­ing to note that In­dian civil avi­a­tion mar­ket is grow­ing at a rapid pace and now ranks ninth in the world. It is es­ti­mated that by 2020,

In­dia would be the third largest civil avi­a­tion mar­ket. With a net­work of do­mes­tic and 85 in­ter­na­tional air­lines con­nect­ing 40 coun­tries, In­dian air­ports han­dled pas­sen­ger traf­fic of 190 mil­lion per­sons in 2015. Yet In­dia is one of the least pen­e­trated air­mar­kets in the world with 0.04 trips per capita per an­num as com­pared to 0.3 of China and more than 2 in the United States. Air travel has ceased to be a lux­ury these days. The mid­dle-in­come pop­u­la­tion of In­dia has grown by 60 per cent over the last five years and has reached about 270 mil­lions in 2016.

“The de­vel­op­ment of tourism, trade and travel has also con­trib­uted to the in­creased pas­sen­ger traf­fic in In­dia. By 2020, the to­tal pas­sen­ger traf­fic in In­dia is likely to touch 421 mil­lion. It is time for the gov­ern­ment and all stake­hold­ers of the civil avi­a­tion in­dus­try to lever­age this tremen­dous busi­ness op­por­tu­nity.”

The civil avi­a­tion sec­tor of In­dia is poised for a faster and sus­tain­able growth with the de­vel­op­ment of 100 smart ci­ties; new eco­nomic cor­ri­dors; more than 50 new air­ports and ex­pan­sion of ex­ist­ing air­ports. The gov­ern­ment is plan­ning to in­vest over $120 bil­lion in the de­vel­op­ment of air­port in­fra­struc­ture and avi­a­tion nav­i­ga­tion ser­vices over the next decade. The deeper air penetration to smaller ci­ties; bet­ter con­nec­tiv­ity to North East­ern part of In­dia; higher dis­pos­able in­comes of the mid­dle class of In­dia is ex­pected to fur­ther pro­pel the growth of In­dian civil avi­a­tion in­dus­try. 25 COUN­TRIES PRESENT. At In­dia Avi­a­tion, 25 coun­tries par­tic­i­pated in the event while seven states part­nered. As many as 210 com­pa­nies were rep­re­sented at the show while 29 air­craft were on dis­play. Two part­ner coun­tries were the United States and Canada.

The Pres­i­dent of FICCI, Harsh­vard­han Neo­tia, said: “Enor­mous growth in do­mes­tic pas­sen­ger traf­fic, sub­stan­tial strength­en­ing through gov­ern­ment ini­tia­tives, de­crease in global crude oil prices and air­lines show­ing prof­its in­di­cates a sig­nif­i­cantly pos­i­tive trans­for­ma­tion for the In­dian civil avi­a­tion mar­ket. The close part­ner­ship be­tween the gov­ern­ment and the in­dus­try in on­go­ing and fu­ture projects will fur­ther im­prove re­gional con­nec­tiv­ity. I am cer­tain that the sec­tor will take com­plete ad­van­tage of the pos­i­tive mo­men­tum and help sus­tain the growth.” BOE­ING ON A ROLL. Boe­ing which had a large pres­ence at the air­show said it was happy the way things were un­fold­ing in In­dia. Boe­ing has a back­log of 97 air­craft to be de­liv­ered in In­dia, 75 to Jet Air­ways; 19 to Air In­dia and three to Spice­Jet. These com­mit­ments will be ful­filled soon as Boe­ing sees an up­ward swing in mar­ket sen­ti­ments and air­lines re­turn­ing to prof­itabil­ity in In­dia.

The Boe­ing Se­nior Vice Pres­i­dent, Asia Pa­cific & In­dia Sales, Dr Di­nesh Keskar, said the com­pany was in sync with the gov­ern­ment which wanted the air­framers to cre­ate an ecosys­tem while sell­ing an air­craft in In­dia. The ecosys­tem con­sisted of set­ting up or help­ing set­ting up of a main­te­nance, re­pair and over­haul (MRO) fa­cil­ity; train­ing and sim­u­la­tion sup­port; and fa­cil­i­tat­ing leas­ing op­tions for buy­ers. Boe­ing has done all of these – helped set up the MRO unit for Air In­dia in Nag­pur; has train­ing and sim­u­la­tion fa­cil­ity and con­nects buy­ers to lessors.

Re­it­er­at­ing Boe­ing’s mar­ket up­date for In­dia, he said, the pro­jected de­mand for new planes is 1,740 val­ued at $240 bil­lion. Sin­gle-aisle air­craft in which Boe­ing had a strong hold would com­prise 84 per cent (1,460) sin­gle-aisle jets; 15 per cent (260) wide-body jets; and one per cent (20) re­gional jets. FUEL NOW 23 PER CENT OF OPER­AT­ING COST. Keskar said that fuel prices had de­creased 53 per cent from the Oc­to­ber 2013 peak and that In­dian car­ri­ers pay over 50 per cent more for fuel than the US car­ri­ers. The re­duc­tion in fuel cost has been driv­ing im­pact of land­ing and nav­i­ga­tion fees on di­rect oper­at­ing cost. In Jan­uary 2013 fuel ac­counted for 49 per cent of the oper­a­tional cost and in Fe­bru­ary 2016, it had come down to 23 per cent which was good for the air­line in­dus­try in In­dia. AIR­BUS SOAR­ING HIGHER Af­ter IndiGo’s or­der of 250 Air­bus A320­neo in late 2015, the Euro­pean aero­space be­he­moth is so hooked on to In­dia that it is bet­ting re­ally big. Air­bus is set to de­liver one air­craft ev­ery week to In­dia over the next ten years, re­flect­ing the mar­ket po­ten­tial and growth in the coun­try.

With an es­ti­mated 10 per cent an­nual traf­fic growth rate over the next decade, In­dia will re­quire over 1,600 new pas­sen­ger and freighter air­craft in the next ten years to help meet the grow­ing de­mand, said the Pres­i­dent of Air­bus in In­dia Dr Srini­vasan Dwarakanath and Vice Pres­i­dent (Mar­ket­ing) Joost Van der Hei­j­den. The de­mand in­cludes 1,200 sin­gle-aisle and 400 wide-body air­craft with a to­tal mar­ket value of $ 224 bil­lion. In­dia is well on its way to be­come the third largest avi­a­tion mar­ket by 2034.

Pre­sent­ing a bullish out­look for In­dian civil avi­a­tion sec­tor, the two se­nior ex­ec­u­tives of Air­bus said their com­pany was a proud part­ner in Prime Min­is­ter Naren­dra Modi’s ‘ Make in In­dia’ ini­tia­tive to cre­ate a ro­bust ecosys­tem for im­prov­ing air con­nec­tiv­ity in the coun­try.

“Ev­ery Air­bus air­craft is partly made in In­dia,” de­clared Dwarakanath while out­lin­ing his com­pany’s ini­tia­tives in fos­ter­ing co­op­er­a­tion and help­ing In­dian aero­space and avi­a­tion sec­tor grow sub­stan­tially over the last few decades.

“In­dia’s pref­er­ence for Air­bus air­craft was fur­ther con­sol­i­dated in 2015 with 250 new firm or­ders, lift­ing the mar­ket share of or­ders and the in-ser­vice fleet to over 70 per cent. At present, about 56 per cent of In­dia’s in-ser­vice fleet are Air­bus air­craft op­er­ated by most lead­ing In­dian car­ri­ers. This in­cludes In­dia’s first A320­neo, the first to be de­liv­ered in the Asian re­gion,” Dwarakanath said. INDIGO A320­NEO MAKES DE­BUT. IndiGo’s first A320­neo made an ap­pear­ance on the open­ing day. IndiGo has or­dered 180 air­craft in 2011 and 250 in 2015. Air­bus said Air In­dia would be its fu­ture A320­neo cus­tomer from 2017. Air In­dia and Alafco have signed a lease agree­ment for oper­at­ing lease of 14 A320­neo air­craft. Air In­dia al­ready op­er­ates 66 A320 fam­ily air­craft in­clud­ing 22 A319, 24 A320 and 20 A321. Air In­dia was the first air­line in In­dia to op­er­ate A320s and it was 27 years ago EM­BRAER EN­JOY­ING GOOD BUYS. Em­braer Ex­ec­u­tive Jets which an­nounced sale of Phenom 100E to an undis­closed cus­tomer in In­dia but to be man­aged by Ti­tan Avi­a­tion group, is ex­cited about the In­dian mar­ket. The Vice Pres­i­dent (Sales) Mid­dle East and Asia Pa­cific, Clau­dio Came­lier, said that the com­pany was satisi­fied with the per­for­mance in In­dia, but would strive to do bet­ter, though the mar­ket con­di­tions were not favourable world­wide.

Came­lier said that the sales could be sim­i­lar to that of last year, but did not dis­close what the num­ber was. The global mo­men­tum would pick up on recovery of the US econ­omy. In In­dia, he added, the sen­ti­ments were favourable and hoped that the push for re­gional con­nec­tiv­ity would help busi­ness avi­a­tion too. The com­pany has a 33 per cent mar­ket share across all busi­ness jets.

BOM­BARDIER’S SOLID BASE IN IN­DIA. The Cana­dian trans­porta­tion com­pany, Bom­bardier, has an Engi­neer­ing Ser­vice Of­fice in Ben­galuru which sup­ports Bom­bardier Aero­space’s in-pro­duc­tion and in-de­vel­op­ment air­craft pro­grammes by pro­vid­ing as­sis­tance to both the com­pany and the more than 400 engi­neers at its part­ners’ of­fices in the ar­eas of com­plex engi­neer­ing struc­ture de­sign, ad­vanced stress anal­y­sis and project man­age­ment ser­vices.

Bom­bardier pre­dicts that over the next 20 years, a to­tal of 1,330 busi­ness jet de­liv­er­ies are des­tined for In­dia, and that the Asia-Pa­cific re­gion (in­clud­ing China) will take de­liv­ery of ap­prox­i­mately 4,000 air­craft in the 20- to 149-seat com­mer­cial air­craft cat­e­gory. In re­cent years, Bom­bardier has de­vel­oped a solid base of cus­tomers in the re­gion, and many of its in­dus­try-lead­ing prod­ucts, in­clud­ing Lear­jet, Chal­lenger and Global busi­ness jets, CRJ700 re­gional jets and Q400 NextGen tur­bo­props, are al­ready in ser­vice in In­dia.

Bom­bardier Com­mer­cial Air­craft and Tech Mahin­dra re­cently signed an agree­ment un­der which the lat­ter will de­velop the Air­craft Ground Sup­port Sys­tem (AGSS) for Bom­bardier’s Air­craft Health Man­age­ment Sys­tem (AHMS) for the CSeries fam­ily of air­craft. HONEY­WELL EX­PANDS SER­VICES. Honey­well Aero­space has been se­lected by Jet Air­ways to pro­vide main­te­nance ser­vices for Aux­il­iary Power Units (APU) on board its fleet of 10 Boe­ing 777 air­planes. The five-year agree­ment will help Jet Air­ways bet­ter pre­dict and man­age main­te­nance cy­cles, al­low­ing the In­dia-based air­line to re­duced un­sched­uled down­time and im­prove re­li­a­bil­ity of its fleets.

“We recog­nise that un­planned main­te­nance is an es­sen­tial yet some­times costly pro­ce­dure,” said Ari­jit Ghosh, Pres­i­dent, Honey­well Aero­space In­dia. “Our APU main­te­nance pro­gramme cou­pled with Pre­dic­tive Trend Mon­i­tor­ing Di­ag­nos­tic ser­vice pro­vides Jet Air­ways the tools to sim­plify bud­get plan­ning and mit­i­gate un­ex­pected costs that may arise due to un­sched­uled re­movals, as well as speed up turn­around for its B777 fleet.” GULF­STREAM HOP­ING FOR MAR­KET TO OPEN UP. Sa­van­nah-based Gulf­stream had brought two air­craft— G150 and G650. Gulf­stream’s ser­vice cen­tre in Dal­las was autho­rised by In­dia’s Di­rec­torate Gen­eral of Civil Avi­a­tion (DGCA) to per­form main­te­nance on all DGCA-reg­is­tered Gulf­stream air­craft. The US-based busi­ness jet man­u­fac­turer is hope­ful that the gov­ern­ment poli­cies would give the right push to gen­eral avi­a­tion in gen­eral and busi­ness avi­a­tion in par­tic­u­lar. TEX­TRON TO MAKE BELL COPTERS IN IN­DIA. Tex­tron Inc is likely to build its sin­gle largest sell­ing he­li­copter – Bell 407 – in part­ner­ship with In­dian firms for the ecosys­tem and that in­cludes avion­ics, ro­tors, gear­box, etc. The com­pany has un­der­taken a mar­ket fea­si­bil­ity study.

Tex­tron has a de­vel­op­ment cen­tre in Ben­galuru, em­ploy­ing 500 aero­nau­ti­cal engi­neers. The com­pany has a tie-up with Dy­na­matic Ltd to man­u­fac­ture the Bell 407 cab­ins in Ben­galuru, to cater to the ex­port mar­kets, es­pe­cially the US and Canada. The Ben­galuru unit can man­u­fac­ture four 407 cab­ins a month. The com­pany is look­ing at mar­ket­ing re­con­nais­sance and sur­veil­lance he­li­copters to the armed forces. PAWAN HANS VER­TI­CAL GROWTH. The state-owned Pawan Hans Ltd, In­dia’s largest he­li­copter oper­at­ing com­pany, has drawn up mas­sive ex­pan­sion plans to in­crease the num­ber of he­li­copters from the present 43 to 100 by 2025 and also to de­velop four heli hubs across the coun­try. The com­pany is plan­ning to go for an ini­tial pub­lic of­fer­ing (IPO) in 2017. “We need at least

` 5,000 crore to im­ple­ment our ac­qui­si­tion plan. We are go­ing for IPO and pro­cure­ment on lease ba­sis,” said the Man­ag­ing Di­rec­tor of Pawan Hans Dr B.P. Sharma.

The com­pany is plan­ning to de­velop four heli hubs in the coun­try at Delhi, Mum­bai, Guwa­hati and an­other one in Andhra Pradesh. “The heli hubs of­fer com­plete so­lu­tions which in­clude ter­mi­nals for pas­sen­gers, MRO fa­cil­i­ties and skill de­vel­op­ment cen­ters for train­ing of pi­lots and engi­neers.

Pawan Hans is also talk­ing with Air­bus He­li­copters to set up an MRO unit in Juhu air­port in Mum­bai. In­dia cur­rently has about 300 civil­ian he­li­copters. Pawan Hans has flown over 5,00,000 hours with more than 19 lakh land­ings. TE­LAN­GANA’S SKILL DE­VEL­OP­MENT CEN­TRE. The Te­lan­gana Gov­ern­ment signed an MoU with Aero Cam­pus Aquitaine of Bordeaux Metropole of France to set up In­dia’s first train­ing cen­tre for skill de­vel­op­ment in aero­space in­dus­try. The academy will come up at Begum­pet Air­port in Hy­der­abad. Aero Cam­pus Aquitaine has pres­ence in Turkey, Malaysia and many other coun­tries and they are world lead­ers in their area.

All in all, the In­dia Avi­a­tion event has gained a place on the in­ter­na­tional events map, but it has a long way to go be­fore it be­comes a ‘ must at­tend’ for global play­ers. Right now, the show seems stretched by five days.

Pranab Mukherjee, Pres­i­dent of In­dia, in­au­gu­rated the show for the first time. Also seen here are Union Min­is­ter of Civil Avi­a­tion P. Ashok Ga­jap­athi Raju and Chief Min­is­ter of Te­lan­gana K. Chan­drashekar Rao.

(Top) IndiGo at the launch of the first A320­neo pow­ered by PurePower en­gine by Pratt & Whit­ney; (above) Em­braer Phenom 100E.

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