- Number of passengers travelling by air increased by 20 percent in 2015.
- 70 million Indians fly domestically per year.
- Indigo has ordered 250 new aircraft for $26.6 billion.
- Jet Airways is buying 75 Boeing 737 aircraft for $8 billion.
- India is set to become the third largest aviation market by 2020.
- What is the 5/20 rule?
- Fake pilot licenses.
- Shortage of pilots.
Lightson Ngashangva still remembers the long train journeys followed by interminable bus rides each summer when he went home from New Delhi to his village in India’s remote northeast.
Now, when the 26-year-old biotechnology student visits his home in Manipur, his nearly three-day-long journey by train and bus has been reduced to a four-hour flight.
A fast-growing economy and an expanding middle class have made India the world’s fastest-growing air travel market. The number of passengers grew 20 percent last year and airlines are announcing flights to new destinations almost every week.
And yet, Indian airlines are in distress. Experts say the explosion in air travel over the past decade has happened despite major hurdles in the form of high jet fuel prices, lack of aircraft maintenance infrastructure, choked airports working beyond their capacities and fierce fare wars that have many carriers in the red.
Though the problems appear to be huge, the size and potential of the Indian market continues to draw new players and several foreign airlines have also entered the market.
Out of a population of 1.2 billion, only about 70 million Indians fly on domestic routes in a year, just a quarter of the size of air travel in China which has a similar population.
Air travel in India is “showing double digit growth and will continue to grow at double digits for the next 10 to 15 years,” said Kapil Kaul, regional head of the Centre for Asia Pacific Aviation.
Indigo, India’s biggest and most profitable airline, ordered 250 new A320neo aircraft from Airbus in August in a whopping $26.6 billion deal. At the Dubai Airshow in November, US plane maker Boeing announced that Jet Airways had agreed to an $8 billion deal to buy 75 Boeing 737 aircraft. Jet Airways, part-owned by Etihad Airways, will start taking delivery of the planes from mid-2018.
The purchases are in line with Boeing’s forecast released in August, that it expects a demand for 1,740 planes in India over the next 20 years, at an estimated price of $240 billion. Most of these planes will be for fleet expansion and the rest to replace older aircraft.
The industry’s rapid growth is helping millions of Indians who need to travel long distances to their country’s far northeast or deep south. Budget airline Indigo was the first private carrier to fly to the northeast, starting flights in 2006 to an area that was otherwise an epic train and bus journey.
More and more airlines have started flights to my hometown. Also, the competition between airlines means tickets are getting cheaper.Lightson Ngashangva
Aviation experts say that in the past, socialist-leaning politicians viewed traveling by plane as a luxury and not as an enabler of business and economic growth. The luxury tag ensured punitive taxes on jet fuel, making it nearly 60 percent more expensive than in Singapore or Dubai, both home to busy international airports.
India is forecast to become the third largest aviation market by 2020. Domestic air passengers are expected to jump from the current 70 million to 300 million by 2022, and to 500 million by 2027.
In an attempt to minimize the industry’s growing pains, the government in October announced a draft aviation policy. It proposes the development of no-frills airports at more than 400 airstrips across the country. Some of the airstrips date back to British colonial days and have fallen into disuse and disrepair. The government announced it would spend up to 500 million rupees on each site to make it usable as an airport.
Some problems remain, however. Aviation experts say the policy remains unclear on an existing condition imposed on airlines in India known as the “5/20 rule”. According to the rule, the government does not allow new airlines to fly internationally until they have completed five years of operation and have at least 20 aircraft.
The draft policy’s silence on the future of the country’s much-subsidized national carrier, Air India, has also been disappointing, aviation experts said.
The government’s ownership of the national carrier negatively influences policy decisions and has cost the Indian taxpayer $3 billion in recent years. Air India needs to be privatised, or at least, be prepared for privatization.Kapil Kaul, aviation analyst
As Indian airlines expand their operations, linking more second tier cities, another major problem facing them is the severe shortage of experienced pilots and technicians. As newer airlines entered the business, the hiring standards for pilots, including their hours of flying experience before taking command of an aircraft, were weakened.
High demand for pilots with adequate flying hours has led to corrupt practices.
A few years ago, civil aviation authorities detected fake pilot licenses, an unlicensed ‘flying school’ supplying certificates and touts who helped unqualified candidates obtain licenses for a price.
A government crackdown on those issuing fake certificates and tighter scrutiny of airlines’ hiring practices has curbed the problem. But the shortage of pilots persists.
Last week, more than 250 passengers of a Jet Airways flight to Toronto were stranded for about nine hours as no pilot was available after a technical fault held up the flight.
This shortage has given enormous power to the pilots, leading to a lack of discipline when it comes to flight schedules. Pilot unions often fight efforts by budget-strapped airlines to get them to work longer hours.
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