The Aviation Industry India

The Aviation Industry

By Ambika Vij

History

The beginning of aviation in India was made when Henri Piquet carried 6500 mails in a biplane between Allahabad and Naini. This is also considered as the world’s first airmail service^[1].

Thereafter in December 1912, the first domestic air route opened between Karachi and Delhi. The Indian Air Services in collaboration with the UK based Imperial Airways opened this as an extension of the London-Karachi flight of the Imperial Airways.^[2]

Tata Sons Ltd started the first Indian airline three years later in 1915. It was an airmail service between Karachi and Madras, but it received a significant appreciation since the government did not back it up. Thereafter the first Indian to qualify as a pilot (Tata), started the country's first airline with the famous flight from Karachi to Mumbai on October 15, 1932^[3].

During independence nine-air transport companies were operating within the Indian Territory, carrying both air cargo and passengers. In order to further expand and strengthen the industry, Air India International was formed as a joint sector company between Air India and the Indian government in the year 1948^[4].

Later in the year 1953, the aviation industry was nationalized and brought under the preview of the government; as a result the Indian Airlines enjoyed monopoly in the air space till the 1990’s^[5]. This was bought to an end during the liberalization time, when the government adopted the open sky policy^[6]. It even allowed 100% FDI under automatic route^[7] for Greenfield projects^[8] and 49% FDI for foreign carriers^[9].  Ever since Indian Airlines has been facing a tough competition with the private players such as Jet Airways, Indigo, etc. entering the fray and the competition seems to get tougher day by day.

PRESENT

Today, the aviation industry is one of the high growth segments in our economy.

It is among the top ten globally with a size of around US$ 16 billion and supports about 0.5 percent of the India’s GDP. This sector caters to about 150 million passengers daily, with the potential to grow further^[10]. To cater to this demand, India currently has over 450 airports and 1091 registered aircrafts. With an annual growth rate of the industry at 18% and anticipated traffic to reach 450 million by 2020^[11], this will continue to increase at a very fast rate.