Wednesday, January 17, 2007

Infrastructure: Aviation Special

Over 70% of our population is 35 years or below.

Aviation, as a sunrise sector has the potential to create at least 2 mn jobs directly, and millions more through tourism and hospitality over the next decade.

There are almost 400 airstrips and airports across the country. But not all of them are operational.

Passenger traffic has recorded a growth of 20% over the last three years as against 6 to 7% in the years before. IN 2006, domestic traffic grew by 48% to 30 mn.

Today there are only 4 domestic air journeys per 100 people. With about 31 mn households earning about $5000 per year, the potential for air travel in the country is about 150 mn.

The number of airline trips in India is currently only 0.02 per capita compared with 0.09 in China and 2.2 in the US.

For Indian aviation sector to reach a level of even a third of the European or US penetration level, we will need 50,000 flights a day as against today’s 1200.

AAI (Airports Authority of India) manages 127 airports in the country. It has undertaken the development and modernization of 35 non-metro airports at an approximate cost of Rs. 5,500 crores.

Non-metro cities can be equipped with low cost airports by investing a mere Rs. 16 crore each. Developing bush/gravel strips in each district headquarter can be done for about Rs. 3 to 5 crore.

Air India Express – the low cost carrier (international), was launched in April, 2005.

India is the second largest producer of fresh fruits and vegetables in the world but about 35% of this produce goes waste because of non-availability of appropriate storage and transportation infrastructure. Fresh produce, moreover, gets handled by about 5 to 6 different intermediaries before they reach the consumers. Elimination of these intermediaries, is estimated to wipe out nearly 40% of the costs from the system.

India has only about 5 freighter aircraft compared to just one company’s (UPS) fleet of 600.

Estimated fuel bill for 2006 is $1.7 bn of which sales tax is $330 mn.

It is estimated that for every $100 spent on air transport produces benefits worth $325 to the economy and 100 additional jobs in the air transport result in 610 new other jobs.

Naresh Chandra committee looked into chalking out a road map for the sector in 2003.

Personalities connected with the Aviation sector:

Mr. Praful Patel: Union Minister of Civil Aviation

Mr. Giovanni Bisignani: Director General & CEO, IATA

Mr. Assad Kotaite, President Emeritus, ICAO

Mr. Jean Claude Baumgarten, President, WTTC (World Travel & Tourism Council)

Mr. K. Ramalingam, Chairman, AAI

Mr. V. Thulasidas, Chiarman and MD, Air India