India Struggles To Fulfill its Air Transport Potential

 - March 26, 2012, 3:50 PM
Russia’s Irkut displayed a full-scale interior mockup of its single-aisle MC-21 at this month's India Aviation show in Hyderabad. (Photo: Neelam Mathews)

India could emerge as the third largest aviation market by 2029, from a ranking of 12th in 2010, according to a new report from the Airports Council International (ACI) at the recent India Aviation show in Hyderabad. But the country needs a regulatory framework to encourage investment, promote safety and facilitate the development of tourism, according to Rafael Echevarne, the ACI’s director for economics and program development. With budget carriers now selling more than 70 percent of airline seats in India, the country needs more investment in no-frills airports for smaller cities with a growing passenger base, added consultant KPMG during a conference at the show. Indian civil aviation minister Ajit Singh acknowledged his concern that 2012 will prove a challenging year in which “[the government should] encourage the private sector to participate.” But Indian civil aviation policy has languished in indecision for the last four years and, without indicating a timeline for change, Singh would say no more to AIN than, “discussions are ongoing.”

Evidence that the private sector will drive Indian growth emerged with the launch of the new MAS GMR Aero Technic maintenance, repair and overhaul organization, a 50-50 joint-venture partnership between Malaysian Aerospace Engineering and GMR at Hyderabad International Airport. The facility initially will perform engineering and maintenance on single-aisle aircraft. Meanwhile, Airbus has moved to boost training capacity in India by signing an agreement in Hyderabad with CAE Simulator Training, a joint venture between InterGlobe and CAE, to establish a second Indian pilot and maintenance crew training center near Delhi.

Russia’s Irkut also has designs on the Indian market, where it expects to log orders for its new single-aisle MC-21, due to enter service in 2017. A mockup at the show attracted substantial interest in its cockpit, wide fuselage, spacious interior and electronically controlled luggage bins. Irkut vice president Kyrill Budaev said he expects to book orders for at least 100 of the jetliners in India by 2025. But International Air Transport Association director general Tony Tyler expressed less optimism about the outlook for Indian carriers, which have collectively amassed more than $2 billion of debt in just the past year. “Fuel taxes are sucking the lifeblood from the Indian aviation sector,” he said, adding that infrastructure in the country not only lags behind world standards, but cannot keep up with demand in many locations.