Page 215 - Technology Roadmap Transportation

INTERNATIONAL 2.6 13.4 4.7 12.6 7.8 10.9 12.2 9.4 12.9 11.7 IN MMT TECHNOLOGY ROADMAP: TRANSPORTATION

2.4.3 Viability of Airline Industry: It is very crucial 2.4.4 Congestion: Air Transport System capacity
for sustaining growth and investments across constraints: The ever-growing demand for air
the value chain of air transport. The airline transport has already lead to congestion in
the air transport system at the major airports.
industry in the last decade saw a phenomenal
IN MILLIONS traffic growth albeit without much of profits. Airspace and airport congestion not only
The airline industry is under huge debt to
lead to economic losses but raises many
fund this growth, and there is a further capital
congested system is throwing up challenges for
requirement for aircraft acquisition in future. issues related to environment and safety. The
FIG 2.3 GROWTH FORECAST IN CARGO OPERATIONS 12.9 12.3 10.7 9.2 12.5 11.3 Such high level of debt and high interest cost meeting the aspirations reflected in the traffic
make things really difficult for the industry
growth forecast. These capacity constraints in air
during the downward economic cycle.The
to opportunity cost; increased transportation
competitive landscape for airline industry transport system leads to economic losses due
has transformed radically in last decade with
costs; increased transportation delays;
TOTAL 3.5 TOTAL 6.2 TOTAL 10.3 TOTAL 15.9 COMPOUNDED ANNUAL GROWTH RATE (%) entry of low cost carriers, and now the foreign unproductive fuel burnt; and environmental
losses due to avoidable emissions.The primary
airlines being permitted to invest upto 49% in
Indian carriers.The operating environment for
reason for the congestion is the increasing
AIR TRAFFIC FORECAST FOR INDIAN AVIATION
the airlines besides the fierce competition and
gap between demand and supply of key
excess capacity is characterized by the following
aviation infrastructure; Airspace and Airports.
complement each other and therefore need to
DOMESTIC 0.9 11.8 1.6 11.3 2.5 9.9 3.7 8.4 11.4 10.4 challenges: The airspace capacity and airports capacity
• Demand side challenges:
be handled in an integrated and coordinated
manner by the airport operator and the air
- Cyclicality as it is highly correlated with
state of national and global economy.
- Short-term seasonal variations. navigation service provider.
12 TH PLAN (2016-17) 13 TH PLAN (2021-22) 14 TH PLAN (2026-27) 15 TH PLAN (2031-32) 2010 - 2011 2020 - 2021 2010 - 2011 2031 - 2032 • Supply side on the contrary is fairly rigid 2.4.5 Shortage of skilled workforce; across all
- Perishable nature of the service/product.
the areas of aviation is another challenge for the
industry, airlines are forced to hire foreign pilots
and regulated which makes it impossible due to lack of sufficiently experienced pilots
required for airline operations.
to adjust supply to match the fluctuating
DOMESTIC 102.4 177.8 291.3 447.7 demand particularly in the short run.
10.4
10.6
11.4
11.7
11.7
• The cost structure for the industry is quite
9
rigid. Aviation Turbine Fuel (ATF) is the
single most cost factor which is about 40-
50% of the total operating cost. The sector
has got big relief in form of lower crude
prices recently.
TOTAL 171.8 TOTAL 282.7 TOTAL 452.1 TOTAL 696.4 • With cascading central and state taxes, the
The traffic growth forecast upto year 2031-32 from Ministry of Civil Aviation [8] • The airline industry is also affected severely
prices of ATF are very high as compared
ATF prices makes the management of input
FIG 2.2 GROWTH FORECAST IN PASSENGER CARRIED BY SCHEDULED AIRLINES 11.1 10.5 9.8 9 10.7 10.1 to global averages. Also the volatility in the
costs even more difficult.

by the exchange rate risks, as almost all the
cost elements including fuel, insurance and
freight, maintenance, repair and operation
expenses (MRO) and aircraft lease rentals
are in dollar terms, where as the earnings
are in rupees. Therefore, any sharp
unfavourable currency movement makes
INTERNATIONAL 69.4 10.1 104.9 8.6 160.8 8.9 248.8 9.1 9.5 9.3 the operating environment extremely
challenging.

AIRWAYS 213