Through the Looking Glass

Financial Express Aviation is amongst the worst-hit industries in Covid-19: what might change? Akhilesh Tilotia and Sunil Bhaskaran Before Covid-19 pandemic hit India and its aviation industry, airline traffic had been growing smartly for last many years: indeed, the industry had celebrated fifty consecutive months of double-digit growth in December 2018. Airlines in India had started transporting more people annually (~140 million) than the AC coaches of Indian Railways (~130 million) over longer distances and at comparable or lower prices. The UDAN scheme helped move the number of India’s operational airports to more than 100. When India hosted its first Global Aviation Summit in January 2019, the local industry was expected to continue growing smartly to a target of a billion trips a year in the forecast-able future. Given these expectations, tens of billions of dollars of aircraft were expected to come to India – plans for setting up a lease finance industry in ...

The Financial Express The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at the Global Aviation Summit in Mumbai in January earlier this year. The Finance Minister, in her maiden budget, laid the foundation of building an important component of the aviation sector: “As the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores. This is critical to the development of a self-reliant aviation industry, creating aspirational jobs in aviation finance, besides leveraging the business opportunities available in India’s financial Special Economic Zones (SEZs), namely, International Financial Services Centre (IFSC). Government will implement the essential elements of the regulatory roadmap for making India a hub for such activities.” The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at...

Business Standard The economic multiplier effect of airport construction is estimated to be around six times the capital invested in an airport Jayant Sinha & Akhilesh Tilotia In the previous century, Jawaharlal Nehru proclaimed dams and factories as the ‘temples of modern India’. As the Indian economy becomes more service intensive and rapidly globalises to become a major player in goods and services, trade and foreign investments, connectivity is of paramount importance. In this century airports can be said to be the ‘temples of New India’ welcoming trade, ideas and investments. India is expanding the reach of its Ude Desh Ka Aam Naagrik (UDAN) scheme which brings airline services closer to many cities. Air travel is becoming cheaper as fuel prices remain low and operating costs are brought down through industry-friendly policies, airlines are significantly expanding capacity bringing many new passengers to the aviation network. A sophisticated analysis done by Google (u...

The Economic Times By Jayant Sinha & Akhilesh Tilotia Providing regional air connectivity is an important policy goal for the government. Such services deliver a host of benefits by fulfilling latent consumer demand for convenient travel, making businesses and trade more efficient, unlocking India’s tourism potential, enabling fast medical service and promoting national integration. Moreover, building connections to tier-2 and tier-3 cities also generates powerful network effects with many regional passengers transferring on to the national aviation network between tier-1cities. The Udan (Ude Desh ka Aam Naagrik) programme is designed to jump start the regional aviation market by improving the profitability of under-developed regional routes. Udan is a market-based policy intervention that builds on similar programmes in the US, Canada and Australia. It is also consistent with universal service approaches established for other network-based services such as railways and te...

Business Standard As the aviation market in India deepens, the creation of hubs for regional connectivity, international travel, mega- tourist destinations and freight connectivity will ensure the flow of more foreign Jayant Sinha & Akhilesh Tilotia Airports and airlines share a symbiotic relationship. Large airlines make big airports their hubs: The airport gets a dedicated anchor bringing in passenger footfalls and the airline builds out a full “hub-and-spoke” model centred around this airport. Typically, large airlines operate out of hubs: Such airports are among the largest in the world. Flag carriers like Emirates (244 planes in the sky in calendar year 2015), Etihad (121 planes) and Singapore Airlines (117 planes) have made their home city of Dubai (which handled 78 million passengers in CY2015), Abu Dhabi (23 million) and Singapore (55 million) their hubs. Large commercial airlines such as American (1,064 planes) or Delta (891 planes) hub at Dallas (66 million) and ...

The Times of India Jayant Sinha and Akhilesh Tilotia India’s aviation sector is being rapidly transformed and air travel is becoming indispensable for the general public. India is now the fastest growing major aviation market – the number of air passengers has been growing more than 20% year-on-year. In the past 12 months, more than 9 crore passengers flew domestically and another 5 crores or so flew internationally. In the next few years, India will likely become the third largest aviation market in the world after the US and China. The new National Civil Aviation Policy (NCAP), particularly the Regional Connectivity Scheme, will further accelerate this transformation. Spurred by supportive government policies and the NCAP announced in June 2016, the aviation sector has taken off. Along with plunging oil prices and lower interest rates, air travel has become much more affordable and accessible. In fact, air travel is approaching “rail parity” in terms of AC fares and passengers...