A Century of Indian Aviation: Challenges and opportunities

By Dr. Eugene DSouza, Moodubelle
Bellevision Media Network

18 February 2011: Though the date 18 February does not seem to be reminding of any anniversary of a major noteworthy event,  the date exactly a century ago laid the foundation of the civil aviation in India when  a French pilot Monsignor Henri Piquet undertook the first commercial flight on 18 February 1911 making a journey through air from Allahabad to Naini covering a distance of 10 kilometers just across the Yamuna river carrying world’s first airmail. He carried 6,000 odd letters and postcards, many of which were addressed to celebrities worldwide, including King George V in England. These rare postmarked covers or stamps with the words “First Aerial Post” are considered to be collectors’ delight fetching a handsome fortune if anyone is still in possession of one of these. This aviation feat of Henri Piquet though seemed a short distance across the Yamuna river, opened the entire Indian sub-continent for aviation challenges and future opportunities.

 

Humanity’s desire to fly has been recorded since ancient times. Experiments with gliders laid groundwork to build heavier than air craft, and by the early 20th century advancements in engine technology made controlled, powered flight possible for the first time. Since then, aircraft designers have struggled to make their craft go faster, further, fly higher, and be controlled more easily.

 

Wright Brothers

 

The first sustained flight with a powered, controlled aircraft was made by Wrights brothers-Orville and Wilbur in the United States and created history in general and laid the foundation of the global aviation industry when they made the first sustained, controlled, powered heavier-than-air manned flight at Kill Devil Hills, around eight kilometres south of Kitty Hawk, North Carolina on 17 December 1903. The first flight by Orville Wright of 120 feet in 12 seconds and  Wilbur Wright’s 852 feet in 59 seconds on the same day were the small steps that catapulted the human race to a giant leap in the history of  global aviation. The flights were witnessed by three coastal lifesaving crewmen, a local businessman, and a boy from the village, making these the first public flights and the first well-documented ones.

 

It is quite remarkable that within eight years of the invention of the first flying machine by the Wright brothers, India, though ruled by the British imperial power, witnessed the beginning of  the aviation  era on 18 February 1911. The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of London-Karachi flight of the Imperial Airways.

 

 

The aviation industry in India gathered momentum after three years with the opening of a regular airmail service between Karachi and Madras by the first Indian airline, Tata Sons Limited founded by the ‘Father of Indian Aviation’, JRD Tata. However, this service failed to receive any backing from the Indian Government. JRD Tata joined Tata & Sons as an unpaid apprentice in 1925. He had great interest in flying. On 10 February 1929, JRD Tata became the first Indian to pass the pilot’s examination. With this distinctive honour of being India’s first pilot, he was instrumental in giving wings to India by building Tata Airlines, which ultimately became Air India. His passion for flying was fulfilled with the formation of the Tata Aviation Service in 1932.
For many years since its inception the Indian Aviation Industry was plagued by inappropriate regulatory and operational procedures resulting in either excessive or no competition. At the time of independence nine Air Transport Companies were operational in the Indian Territory. Later the number was reduced to eight when the Orient Airways shifted its base to Pakistan. The then operational airlines were Tata Airlines, Indian National Airways, Air Service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways.

 

 
JRD Tata

 

With an attempt to further strengthen the base of the aviation sector in India, the Government of India together with Air India (earlier Tata Airline) set up a joint sector company, Air India International, in early 1948. With an initial investment of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, Air India started its journey in the Indian aviation sector on 8 June 1948 in Mumbai (Bombay)-London air route. It operated four weekly services between Mumbai-London and two weekly services between Mumbai and Nairobi. The joint venture was headed by JRD. Tata, the visionary who had founded the first India airline in 1932 and had himself piloted its inaugural flight.

 

Walchand Hirachand set up a complex in 1940 that is today the gigantic Hindustan Aeronautics Limited (HAL). It has come to symbolise Indian aviation, both civil and military. With 17 divisions across India, HAL has produced over 5,000 aircraft, both of indigenous design and of licence manufacture, ranging from light trainers to new generation combat aircraft. Its aerospace division is a world class manufacturing centre for space hardware, including Geostationary Satellite Launch Vehicles (GSLV). Supplementing HAL, the National Aerospace Laboratories (NAL) is involved in advanced technologies and the design of civil training and transport aircraft.

 

The soaring prices of aviation fuel, mounting salary bills and disproportionately large fleets took a heavy toll of the then airlines. The financial health of companies declined despite liberal Government patronage, particularly from 1949, and an upward trend in air cargo and passenger traffic. The trend, however, was not in keeping with the expectations of these airlines which had gone on an expansion spree during the post-World War II period, acquiring aircraft ad spares.

 

The Government set up the Air Traffic Enquiry Committee in 1950 to look into the problems of the airline. Though the Committee found no justification for nationalization of airlines, it favoured their voluntary merger. Such a merger, however, was not welcomed by the airlines.

 

 

By the Air Corporations Act of 1953, the Government of India nationalized nine airline companies. This Act established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These government-owned airlines dominated Indian aviation industry till the mid-1990s.

 

Foreign airlines carrying international passenger traffic to and from India existed long before Independence. Their operations are governed by bilateral agreements signed from time to time between the Government of India and the governments of respective countries. In 1980-81, the number of such airlines was 35. It rose to 49 in 1996-97.

 

 

Rajiv Gandhi, himself a pilot, contemplated the ‘open skies’ policy that was put into practice in 1993. By adopting the ‘open skies’ policy the government of India allowed air taxi- operators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. The operators were, however, required to use aircraft with a minimum of 15 seats and conform to the prescribed rules. In 1994, the Indian Government, as part of its ‘open skies’ policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994.

 

With the new Act, private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector. However, no foreign airline could directly or indirectly hold equity in a domestic airline company.

 

By 1995, several private airlines had ventured into the aviation business and accounted for more than 10 percent of the domestic air traffic. In 1996, private air taxi operators carried 49.08 lakh passengers which amounted to a 41.14 per cent share in the domestic air passenger traffic. Seven operators-NEPC Airlines, Skyline NEPC, Jet Air, Archana Airways, Sahara India Airlines, Modiluft and East West Airlines acquired the status of scheduled airlines. Besides this there were 22 non-scheduled private operators and 34 private operators holding no-objection certificate in 1996.

 

 

In the recent past, Indian civil aviation sector has grown manifold. Though some of the private airlines have shut shop and a couple of them have merged with other major airlines, several new players have entered the industry and many more are about to enter the arena thereby providing more choices to the passenger. Today, air travel is no more the monopoly of the rich and the mighty. With the arrival of cheap airline carriers in India, air traveling has become simpler and cheaper. Private players including Kingfisher Red, Spice Jet, Jetlite, Indigo etc. are coming up with attractive rates for their passengers, thereby making civil aviation lucrative.

 

Now, airline has become a common man’s vehicle and revolutionized the way a common Indian traveller used to travel. The airlines are adding more and more cities to their list of destinations covered throughout the country. Therefore, it can be said that the domestic airlines of India have made travelling easier for the masses. More and more people are opting for travelling by air, because they save a lot of time in traveling, as compared to other means of transportation.

 

 

The Air India Express, a low-cost airline which is a subsidiary of Air India started, operating mainly from Indian state of Kerala and later from Mumbai and Mangalore operates services mainly to the Gulf countries. The airline started operations on 29 April 2005 with a flight from Thiruvananthapuram to Abu Dhabi. Today Air India Express operates nearly 100 flights per week, mainly from southern states of India.Airport Authority of India was set up on 1 April 1995 by amalgamating the international Airport Authority of India and the National Airport Authority of India, the Airport Authority of India was to handle all matters relating to infrastructure for civil air traffic and transport at the international and the domestic airports and enclaves in the country.

 

India boasts of a well-developed air travel network. In a vast country like India air-travel is the swiftest mode of transportation to reach from one end to another. There is good air connection to nearly all corners of India. Almost all the states have one or more airports, which are regularly serviced by several airlines. India has more than 20 international airports, which also serve as domestic airports. Others are only domestic airports. India’s airport network efficiently caters to the millions of travellers and tourists coming to visit the country. Due to this India’s travel and tourism industry is booming and benefiting the country’s economy.

 

Delhi Airport

 

The important international airports in India include Indira Gandhi International Airport of New Delhi, Chatrapati Shivaji International Airport of Mumbai, Begumpet Airport of Hyderabad, Calicut International Airport of Calicut, Chennai International Airport of Chennai, Cochin International Airport Limited of Cochin, HAL Airport of Bangalore, Netaji Subhash Chandra Bose International Airport of Kolkata, Raja Sansi International Airport of Amritsar, Sardar Vallabhbhai Patel International Airport of Ahmedabad and Trivandrum International Airport of Trivandrum, Goa International Airport Vasco Da Gama, Goa and Mangalore International Airport, Bajpe.

 

Since the inception of the air travel a century ago, Indian aviation industry though had a modest growth till the independence of the country from the British colonial rule in 1947,  gradually made remarkable progress. Nationalization of the then existing private air lines, though considered to be  the need of the time as India ventured on a mixed economic drive under Pandit Jawaharlal Nehru, the first Prime Minister of independent India, the Indian Airlines (domestic) and Air India (international) had been plagued with a number of problems as any other ill-managed public sector companies.

 

 

However, with the adoption of the policy of liberalisation and the ‘open skies’ policy in 1990s, the Indian government by allowing private companies to operate air-taxis brought about a revolution in the Indian aviation industry. With competition among the private operators the air travel has become more affordable to the common people. While the national carrier, Air India is incurring huge losses and seeking tax payer’s money to run it, it is high time that the government should withdraw from the aviation business and allow the private companies to operate the air travel with  necessary regulations.

 

As the Indian Aviation Industry had faced a number of  challenges and availed many opportunities during the past century, the future seems to be bright with passenger traffic  estimated to grow at a Compound Annual Growth Rate(CAGR) of over 15% in the coming few years. The Ministry of Civil Aviation would handle around 280 million passengers by 2020; and 110 billion US dollars investment is envisaged till 2020 with 80 billion US dollars solely for new aircraft and 30 billion US dollars for developing the airport infrastructure.

 

Thus, the small flight of ten kilometers of Monsignor Piquet on 18 February 1911, exactly a century ago set in motion the Indian Aviation Industry that has been growing in leaps and bounds revolutionizing the modern travel and transport  by which not only the different cities and towns of the country have been linked, but also integrated India into the global village.