India Aviation - Firming up Alliances

The five-day event, supported by DGCA, AAI, Air India and Pawan Hans Ltd, India Aviation 2012, served as a platform for new deals and joint ventures between Indian and foreign companies

Drawing inspiration from the response by the Indian civil aviation industry during India Aviation 2008 and 2010, the Indian Ministry of Civil Aviation (MoCA) jointly with the Federation of Indian Chambers of Commerce and Industry (FICCI), organised the third edition of India Aviation 2012 from March 14 to 18, 2012, at Begumpet Airport, Hyderabad. The five-day-long event, supported by the Directorate General of Civil Aviation (DGCA), Airports Authority of India (AAI), Air India and Pawan Hans Ltd, was an international exhibition and conference on civil aviation. It consisted of an indoor exhibition spread over 6,000 square metres, static display of 22 aircraft, a mix of fixed and rotary wing machines, a day-long conference on civil aviation, a CEO Forum, business meetings and media briefings. The UK, France, US, Russia, Belgium, New Zealand, Canada and several other countries and leading business and commercial aircraft manufacturers set up pavilions at the show. India Aviation 2012 served as a platform for new deals and joint ventures between Indian and foreign companies.

Inauguration Ceremony

India Aviation 2012 was presided over by the Minister of Civil Aviation, Ajit Singh. Accompanying him on the dais were N. Kiran Kumar Reddy, the Chief Minister of Andhra Pradesh as the Chief Guest; Jaipal Reddy, Union Minister for Petroleum and Natural Gas; Peter Burleigh, Chargé d’Affaires, Embassy of the United States to India; Elisabeth Dallo, Head-International Cooperation, DGAC France and R.V. Kanoria, President, FICCI. The welcome address was delivered by Dinesh Keskar, Chairman of FICCI Civil Aviation Committee and President, Boeing India.

In his opening remarks, Dinesh Keskar stated that the third edition of India Aviation was being organised jointly by MoCA and FICCI with UK as the ‘partner country’, France as the ‘focus country’ and US as the ‘guest country’. Stating that the Indian civil aviation industry was amongst the top ten in the world, he added that it offered immense investment opportunities and went on to say that India Aviation was the largest civil aviation air show in the region and that this year, the strength of companies participating was 200, up from the previous edition two years ago by 20 per cent.

Peter Burleigh, the American Chargé d’Affaires to India, expressed optimism about the future of the civil aviation industry in India and said that his country was prepared to assist India meet the emerging challenges in this sector. In his address, the Union Minister for Petroleum and Natural Gas, Jaipal Reddy said that the future for the civil aviation industry in India was bright and that the government would do everything to help this sector. He hoped that India would soon be among the top five nations of the world in the regime of civil aviation. Chief Guest N. Kiran Kumar Reddy pointed out that over a period of time, there have been profound changes driven by new technologies and today, thanks to the growth of the civil aviation industry and the prevailing competitive environment, air travel is now within the reach of the common man. Elisabeth Dallo, Head of International Cooperation, DGAC France, in her message said that she was willing to renew the commitment of France to join hands with India to spur the growth of the Indian civil aviation industry.

Delivering his address, the Minister of Civil Aviation, Ajit Singh stated that 2011 had been a bad year due to global economic turmoil. However, the year, which was also the centenary of civil aviation, has passed and India needed to look ahead. The Minister stated that the centre of gravity of the global civil aviation industry appeared to be shifting to the Asia-Pacific region. He also stated that a number of policy changes which would help the Indian civil aviation industry to grow were under consideration by the government. The Air Cargo Promotion Policy was under formulation to provide the much-needed impetus under consideration by the government to the air cargo sector. The AAI was gearing up to meet the new challenges of air traffic management, air navigation and airport infrastructure. The GPS aided geo augmented navigation (GAGAN) project, undertaken by AAI in collaboration with ISRO, is expected to be completed soon. Steps were also under way to reform the regulatory framework. Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation, delivered the vote of thanks. At the end, the Minister of Civil Aviation formally declared open India Aviation 2012, digitally!

The Participants

Aimed at showcasing and sharing growth opportunities in the Indian civil aviation industry, the underlying theme of India Aviation this year was “India: The Emerging Aviation Hub”. However, somewhat ironically, the event was held at a time when the civil aviation industry in India, burdened with a variety of problems, is struggling to remain afloat. Most of the Indian carriers have been reeling under heavy cumulative losses and some overwhelmed by their interminable woes, are even teetering on the verge of collapse. The national budget presented in the Parliament halfway through the show has also not provided any significant relief to the civil aviation industry as a whole. In fact, the proposal to permit investment of up to 49 per cent into Indian carriers by foreign airlines has been indicated in the budget to be “under active consideration” by the government, whatever that means.

The show, however, had a pronounced bias in favour of business aviation with as many as 16 business jets and four helicopters on static and flying display. There were only three airliners on the tarmac, all new offerings by the different original equipment manufacturers (OEM). Among the exhibitors were the leading business and commercial aircraft manufactures including Airbus, ATR, Boeing, Bombardier, Dassault, Embraer, EADS, GE Aviation, Gulfstream,Hawker Beechcraft, Jet Airways, Piaggio Aero Industries, Rolls-Royce and UAC-Sukhoi. The Russian aerospace major Irkut made its maiden appearance in India at the India Aviation 2012. Major helicopter OEMs such as AugustaWestland, Bell of Textron group, Eurocopter-EADS and UTC Sikorsky were also present.

Conference on Civil Aviation

At the conference on civil aviation held at the venue on March 15, Dr Nasim Zaidi, Secretary, Ministry of Civil Aviation, emphasised that the unprecedented growth in air traffic presented formidable challenges that would call for massive investment in infrastructure, development of skills and technological innovation to make the sector more efficient.

Maneesh Jaikrishna, Country Director, India and Subcontinent SITA, stated, “India is poised to emerge as the world's third largest aviation market by 2020 and that the growing demand of the industry can only be addressed through innovation. This level of growth is inevitably accompanied by significant challenges and innovation will play an important part in addressing these to support the growing demands of India's aviation industry. Sita has been a catalyst for innovation in the Indian air transport community for over 60 years. We have been instrumental in bringing new technology to India and today, we are involved in all aspects of air transport in the country. We are once again proud to be working with the Centre for Asia Pacific Aviation (CAPA) to produce this valuable report on the state of the industry. As the world’s leading specialist in air transport communications and IT solutions, we look forward to continuing to work with the Indian aviation community and the government to drive innovation during this exciting period of transformation and change.”

Addressing the conference, Tony Tyler, Director General and Chief Executive of International Air Transport Association (IATA), said that there were serious problems being faced by the Indian aviation sector. The need to address the problems was urgent and as the situation was beyond the control of the airlines, solutions had to come from the government. As per Tyler, the agenda to rebuild competitiveness in Indian aviation rested on four pillars; taxes, infrastructure, costs and investment policies. He called for evolving a four-pillar strategy for reinvigorating the airline industry and assured support for developing such a policy. However, such a strategy cannot be formulated in isolation by the Ministry of Civil Aviation but would need the support of the Ministries of Tourism, Finance, Environment and Petroleum as also the Competition Commission. On the decision by the government to allow foreign airlines to invest in Indian carriers, he said this was not a panacea. “Without addressing the other three pillars, costs, taxes and infrastructure, 49 per cent FDI may only be a theoretical exercise because under current conditions, the odds are stacked against any investor making a positive return on investment in the Indian aviation sector. No one is likely to come forward unless they see themselves making a profit,” Tyler said.

The Airline Industry

The high point of the event was the arrival of the Boeing 787 Dreamliner showcased in Air India livery for the first time in India. According to Boeing, India is one of the fastest growing commercial aviation markets in the world, growing at a rate of eight per cent. Prospects for business in the Indian market, therefore, were bright. As per estimates by the company, over the next two decades, India will need 1,320 commercial aircraft valued at $150 billion ( Rs. 8,25,000 crore). Boeing is setting up a maintenance, research and overhaul (MRO) facility in Nagpur to be commissioned by the year end. Airbus, that had its corporate jet on static display, has assessed the demand for commercial aircraft in the Indian market over the next two decades at 1,043 passenger and cargo airliners valued at $145 billion ( Rs. 7,97,500 crore). On the opening day of the show, Airbus signed an agreement with CAE to set up a second pilot and maintenance crew training centre. This facility to be located in Noida, National Capital Region (NCR), is expected to be operational by 2013 and will train 5,000 pilots and maintenance crew annually.

The two other airliners on display were the Bombardier Q400 regional turboprop aircraft, the latest to join SpiceJet and the Sukhoi SuperJet 100 regional jet from United Aircraft Corporation of Russia sporting engines from PowerJet. The Q400 is expected to compete with the ATR that currently has a dominant presence in the Indian skies. The Russian aviation company, Irkut, had on display a life-size mock-up of the cockpit and cabin of its MC-21 airliner for the first time in India. The company claims to have already bagged orders for 235 of the 180-seat airliner that is in an advanced stage of development and is expected to be certified by 2017.