IATA estimates investment in air industry at $90 billion by 2030

BY A CORRESPONDENT
June 24, 2006

An International Air Transport Association (IATA) report has pegged investment in India's aviation industry at $90 billion up till the year 2030, if it is to match the demand for flights in tandem with India's economic growth rate as well as rise in disposable income. Rise in demand is expected to reach 300 million per year, in tandem with economic growth. According to the report, a major roadblock to increase in investment lies in current regulation.

IATA Chief Economist Brian Pearce said, "If India doesn't reform its regulation, investors will shy away from the air industry with a knock-on effect to industrial growth," and added, "We could get to the point where demand from passengers is outstripping supply of aircraft and infrastructure."

Further pointing out that it was mostly ``market hype about the future of Indian low- fare aviation, based on the success of exceptional companies such as Ryanair,'' he stressed that growth was being stifled by high airport charges and the inability of foreign investors to enter the Indian aviation industry.

Profitability hasn't been at its best - Deccan Aviation Ltd. shares failed to take off successfully despite Air Deccan being India's biggest low-fare carrier. Worry over the growing competitiveness of low budget airlines, shares plunged by 33 per cent on the initial day of trading.

The 261 member association representing 94 per cent of the scheduled air traffic has dipped in profitability since 2000, the year they earned $3.7 billion. According to IATA estimates, between 2001 and 2005, they lost $43.6 billion. The downhill trend set in with the September 11 attacks in the US, and continued with excess capacity and rising fuel prices.

Government toughens anti-hijacking stand, facilitates aircraft access for The National Security Guards (NSG) have now been authorised by the Government to commandeer any available aircraft for engaging in aggressive pursuit of hijackers. The move is a part of the Centre's toughening stand on anti-hijacking, and will allow NSG forces to face "zero time loss'' is rescue operations.

The proposal cleared by the government makes redundant any need for NSG personnel to requisition an aircraft for pursuit purposes. The Directorate General of Civil Aviation (DGCA) can allow NSG troops the first available passenger aircraft in such situations.

The NSG said, "With the government nod for the latest proposal of the security agencies and the civil aviation ministry, it would mean that NSG commandos face zero time loss in looking for a passenger aircraft at the airport for transporting them in a case of a hijack."

Ministry sources added, ""Precious time is lost in requisitioning an aircraft and going through the procedural rigmarole. It happened in the case of the IC-814 hijack during the previous National Democratic Alliance regime when the NSG commandos had to be rushed to Amritsar but the hijacked Indian Airlines aircraft could neither be prevented from taking off from there nor could the commandos reach in time to storm it and rescue the passengers."

They added, "The idea is not to disrupt the flights where passengers have already boarded and cause a disruption, it is to see which aircraft has landed, offloaded the passengers and can take off without any delay. The aircraft can belong to any domestic Indian carrier, private or State-owned. It can be readied for transporting NSG commandos in case of a hijack."

The NSG is a specialised task-oriented force, aimed at counter-hijacking and counter-terrorist operations, and comprises of personnel drawn from the Army and Central and State police forces.