论文部分内容阅读
【Abstract】This paper details the changing dynamics in the Indian international aviation market by reviewing regulatory changes to India’s air transport market and examining international traffic trends.
【Key Words】India； Middle East airlines； Air India； India–Europe market
【作者簡介】周素萍，中国商飞上海飞机设计研究院。
1. Introduction
India is home to a sixth of the world’s population where over half of its people is under 25 years with more than two-thirds， under the age of 35 years， which indicates that air transport could be a major component of these young lives long into the future （United Nations， 2011）. Despite the economic slowdown in 2008-09， India has managed to remain stable and in post-recession （after 2010） the GDP was growing at 8.2% per annum. In 2011， the Indian economy overtook the Japanese economy by $0.02 trillion and has become the world’s third largest economy in terms of purchasing power parity， after United States and China （IMF， 2012）. O’Connell and Williams （2006） found that the propensity for air travel in India was 0.1 trips per person in 2006， which is a fraction of the global average of 2.0. Airbus （2012） forecasts have indicated that that the propensity for air travel in India will surge by 4.6 times by 2031 from its present position as more of India’s 300 million middle class residents and those who are more economically advantaged will begin to choose air travel over the train service （Forbes， 2007； Airbus， 2012）. Over the last number of years the international market to/from India has changed and evolved considerably and this paper aims to detail these changing dynamics in the Indian international market.
2. Regulatory changes to India’s air transport market
Hooper （1997） noted that the Indian civil aviation industry in its early days was the outcome of World War II excess aircraft， which led to ‘destructive competition’. JRD Tata， the pioneer of India civil aviation industry and founder of Air India， had to relinquish power of Air India， then the largest carrier， to the government when it nationalized the civil aviation assets in 1953. The Air Corporation Act of 1953 eliminated competition in Indian skies by creating two autonomous corporations； firstly Air India， which was initiated to focus on international operations while Indian Airlines （formed by merging eleven private players） created a total monopoly in the domestic sector which remained unchallenged till the beginning of the 1990’s. Sinha （2001） and Williams （2002） repeatedly argued that bureaucracy and regulation hindered India’s air transport market. World monetary bodies pressurised the Indian government to liberalise the aviation market and to allow the domiciled carriers to become privatised. In a crude attempt to revive competition， the government announced an ‘open sky’ regime， where scheduled ‘air taxi’ operators were allowed to compete with the nationalised carriers （Hooper， 1997； Saraswati， 2001）. Six new airlines entered the market thereafter， namely， Air Asiatic， UB Air， India International Airways， Delhi Gulf Airways， City Link Airways and Continental Air， but all ran into financial trouble and ceased operations within a short period – clearly showing that the problems remained ongoing. In the early 1990s， bureaucracy， inefficiency and unproductively were entrenched traits that resided within the governance of Indian aviation as evidenced by events such as the Government grounding of the entire A320 domestic fleet for a year and continuous labour disruptions. These industrial strikes provided opportunities for some additional private operators to enter such as East West， Jet， Damania and Modiluft – these new entrants were operating flights on 54 routes， reducing Indian airlines’domestic market share to around 70% （Williams， 2002）. Hooper （1997） documented that Indian Airlines incurred losses amounting to more than US$220 million from 1990-1994. In addition， the Indian government continuously reversed its aviation policies， which were designed as blueprints of legislative frameworks to shape aviation in India but the continuous changes made it extremely difficult for domiciled carriers to pursue long terms plans. Hooper （1997） highlighted this pattern by citing an incident whereby the government legislated that overseas investors could acquire a 40% equity investment in an Indian carrier， which allowed Jet Airways to receive a 20% infusion from Kuwait Airways and another 20% from Gulf Air in 1993， however due to policy reversals， it was forced to divest this equity by 1997. Tight regulations in the domestic sector continued – the government introduced three different categories of routes which act as guidelines and these categories remain in-situ today as shown in Table 1.
Table 1： Categories of routes in Indian domestic market
Categories Routes
Category 1
Routes connecting directly Mumbai- Bangalore， Mumbai- Calcutta
Mumbai- Delhi， Mumbai- Hyderabad
Mumbai- Madras， Mumbai- Trivandrum
Calcutta- Delhi， Calcutta- Bangalore
Calcutta- Chennai， Delhi- Bangalore
Delhi- Hyderabad， Delhi- Chennai
Category 2 North East region， Jammu and Kashmir
Andaman and Nicobar， Lakshadweep
Category 3 Routes which are not included in
category 1 and 2
Source： Ministry of Civil Aviation， 2011
Airlines operating scheduled air transport service on one or more of the routes under Category I， shall be required to provide such service in Categories II and III as indicated below：
（1） The operator shall deploy on routes in Category II at least 10% of the capacity deployed on routes in Category I and of the capacity thus required to be deployed on Category II routes， at least 10% would be deployed on services or segments thereof operated exclusively within the North-Eastern region.
（2） 50% of the capacity deployed in category 1 routes has to be deployed on category 3 routes.
（3） All scheduled carriers can operate to any destination within India as a subject to route dispersal guidelines.
However， there is no such minimum requirement criteria set for foreign carriers to operate international services into India. Private carriers are also prohibited from entering into international services as the regulation enforces that the carrier must have had 5 years of continuous domestic operations and have a minimum fleet size of 20 aircraft.
Despite the constraints， the domestic passenger market has grown considerably over the last decade as passenger numbers have increased from 13 million in 2001 to just over 61 million by 2010 （DGCA， 2011）. Data computed from IATA’s PaxIS database reveals that low-cost carriers had captured 50% of the domestic market by 2011， up from just 20% some five years earlier – this has been triggered by host of new entrant low cost carriers offering low fares， which created fare wars amongst the domiciled carriers. To highlight the level of ‘fare competition’， IATA （2012） reported that the average Indian ticket price is $95， which is around $11 short of the break-even fare. O’Connell et al （2013） investigated the core underlying problems facing Indian based airlines and found that restrictions on foreign ownership， outdated regulatory policies and overtaxed fuel， which in-turn were overlain by industry wide overcapacity issues were the principle contributing factors for the under-performing carriers. The authors estimated that the net losses over the past several years could have amounted to as much as $20 billion. More recently the Indian rupee has devalued by 25% from 2011 to 2013 and this structural shift has heavily impacted the cost base， as 70% of an Indian airline’s operational costs is dollar-denominated. Meanwhile additional variable costs are being levied as the Airports Economic Regulatory Authority （AERA） of India approved a 346% increase in charges at Delhi Airport， effective from May 2012， while Chennai and Kolkata have proposed a 118% and 242% increase respectively to fund their modernisation programs （The Hindu， 2012）. As a result all of the carriers in India with the exception of IndiGo are loss making. Figure 1 shows the net results of India’s airlines from 2003 to 2011 with the accumulated net loss for 2011 registering $2.4 billion， while only IndiGo recorded a net profit of $117 million in 2011. A whopping $8.3 billion in losses were racked up from 2006 to 2011 – with Air India alone losing $6.1 billion over this time period. This government owned carrier with a workforce of 27，000 transported just 13 million passengers in 2011 and the government aims to continue to protect the ailing carrier long into the future by investing $5.8 billion over the next eight years， with the ambition to return it to profitability by 2018 （Flightglobal， 2012）. Doganis （2013） responded by arguing that Air India typified the ethos of state owned carriers of bygone times as it was over-politicised， over-staffed and it had evident symptoms of low productivity， inefficiency， bureaucratic management， poor service quality， no clear forward looking strategies combined with slow and indecisive making response tactics. Figure 1 Net Results of all Indian home carriers in （US$ million）
Source： Flight Global， 2012
3. International traffic trends to/from India
From an international perspective India has entered into Air Service Agreements （ASA’s） with 108 countries， each with varying degrees of restrictions on capacity entitlements， route schedule and frequency （Ministry of Civil Aviation， 2010）. Traditionally， the ASA’s were highly restrictive and national carriers enjoyed the monopoly of serving international routes. Renegotiations of the Air Service Agreements have taken place over the recent years and some liberalisation has transgressed as the private carriers were allowed to operate on international routes provided they operated on the domestic sector for at least five years. The international landscape was evidently changing and by 2013， there were 85 international airlines operating to/from India together with 5 Indian carriers that were conducting international services to over 40 countries. In April 2005， a landmark agreement was signed between India and the US when the bilateral ASA， which was originally signed in 1956 was replaced with an ‘Open Skies’ agreement. This agreement provided both countries with open access to all points within the two countries and virtual freedom to set fares and capacity. Also， in comparison to the previous agreement， the new agreement removed all restrictions on code-share and fifth freedom traffic rights. However restrictions remain which include： ownership and control； nationality； while access to domestic markets remains forbidden. Table 2 details India’s most important Bilateral Air Service agreements and these countries are responsible for most of the international traffic to and from India.
Table 2. Details of the Air Service Agreements for ten important destinations to and from India as of 2010
Country Permitted route Aircraft type Frequency
（weekly） Capacity
（weekly） Designation clause*
USA Any Any Unlimited Unlimited Multiple
UK Any Any Summer 49
Winter 56 Summer 19，600 seats
Winter 22，400 seats Multiple
Hong Kong Any Any Limited
4 frequencies Limited Multiple
Singapore Prescribed Any Limited Limited Multiple
Malaysia Any Any Limited Limited Multiple
Macau Any Any Limited
2 frequencies Limited to 600 seats Dual
Oman Prescribed Any Limited Limited to 5，381 seats Multiple
Qatar Any Any Limited Limited to 5，372 seats Multiple Saudi
Arabia Any Any Limited
31 frequencies Limited to 8，500 seats Single
UAE
（Dubai） Any Any Limited Limited to 29，100 seats
（Mumbai 7，299 seats； Delhi 4，559； Chennai 3，607； Kolkata 2，000； Kochi 2，785； Hyderabad 2，750； Thiruvananthpuram 2，000； Bengaluru 2，100 and Ahmedabad 2，000） Multiple
*Designation Clause： Number of airlines allowed to operate. Source： DGCA （India）， 2010
Apart from the US， the other listed countries in Table 2 all have restrictions on either capacity or on prescribed routes. In the case of Singapore and Oman， there is a prescribed route for operations. In the case of Macau and Saudi Arabia， there is a dual airline designation for Macau and single airline designation for Saudi Arabia， while all of the other countries have capacity limitations. Through an analysis of the top 20 international Origin and Destination （O
【Key Words】India； Middle East airlines； Air India； India–Europe market
【作者簡介】周素萍，中国商飞上海飞机设计研究院。
1. Introduction
India is home to a sixth of the world’s population where over half of its people is under 25 years with more than two-thirds， under the age of 35 years， which indicates that air transport could be a major component of these young lives long into the future （United Nations， 2011）. Despite the economic slowdown in 2008-09， India has managed to remain stable and in post-recession （after 2010） the GDP was growing at 8.2% per annum. In 2011， the Indian economy overtook the Japanese economy by $0.02 trillion and has become the world’s third largest economy in terms of purchasing power parity， after United States and China （IMF， 2012）. O’Connell and Williams （2006） found that the propensity for air travel in India was 0.1 trips per person in 2006， which is a fraction of the global average of 2.0. Airbus （2012） forecasts have indicated that that the propensity for air travel in India will surge by 4.6 times by 2031 from its present position as more of India’s 300 million middle class residents and those who are more economically advantaged will begin to choose air travel over the train service （Forbes， 2007； Airbus， 2012）. Over the last number of years the international market to/from India has changed and evolved considerably and this paper aims to detail these changing dynamics in the Indian international market.
2. Regulatory changes to India’s air transport market
Hooper （1997） noted that the Indian civil aviation industry in its early days was the outcome of World War II excess aircraft， which led to ‘destructive competition’. JRD Tata， the pioneer of India civil aviation industry and founder of Air India， had to relinquish power of Air India， then the largest carrier， to the government when it nationalized the civil aviation assets in 1953. The Air Corporation Act of 1953 eliminated competition in Indian skies by creating two autonomous corporations； firstly Air India， which was initiated to focus on international operations while Indian Airlines （formed by merging eleven private players） created a total monopoly in the domestic sector which remained unchallenged till the beginning of the 1990’s. Sinha （2001） and Williams （2002） repeatedly argued that bureaucracy and regulation hindered India’s air transport market. World monetary bodies pressurised the Indian government to liberalise the aviation market and to allow the domiciled carriers to become privatised. In a crude attempt to revive competition， the government announced an ‘open sky’ regime， where scheduled ‘air taxi’ operators were allowed to compete with the nationalised carriers （Hooper， 1997； Saraswati， 2001）. Six new airlines entered the market thereafter， namely， Air Asiatic， UB Air， India International Airways， Delhi Gulf Airways， City Link Airways and Continental Air， but all ran into financial trouble and ceased operations within a short period – clearly showing that the problems remained ongoing. In the early 1990s， bureaucracy， inefficiency and unproductively were entrenched traits that resided within the governance of Indian aviation as evidenced by events such as the Government grounding of the entire A320 domestic fleet for a year and continuous labour disruptions. These industrial strikes provided opportunities for some additional private operators to enter such as East West， Jet， Damania and Modiluft – these new entrants were operating flights on 54 routes， reducing Indian airlines’domestic market share to around 70% （Williams， 2002）. Hooper （1997） documented that Indian Airlines incurred losses amounting to more than US$220 million from 1990-1994. In addition， the Indian government continuously reversed its aviation policies， which were designed as blueprints of legislative frameworks to shape aviation in India but the continuous changes made it extremely difficult for domiciled carriers to pursue long terms plans. Hooper （1997） highlighted this pattern by citing an incident whereby the government legislated that overseas investors could acquire a 40% equity investment in an Indian carrier， which allowed Jet Airways to receive a 20% infusion from Kuwait Airways and another 20% from Gulf Air in 1993， however due to policy reversals， it was forced to divest this equity by 1997. Tight regulations in the domestic sector continued – the government introduced three different categories of routes which act as guidelines and these categories remain in-situ today as shown in Table 1.
Table 1： Categories of routes in Indian domestic market
Categories Routes
Category 1
Routes connecting directly Mumbai- Bangalore， Mumbai- Calcutta
Mumbai- Delhi， Mumbai- Hyderabad
Mumbai- Madras， Mumbai- Trivandrum
Calcutta- Delhi， Calcutta- Bangalore
Calcutta- Chennai， Delhi- Bangalore
Delhi- Hyderabad， Delhi- Chennai
Category 2 North East region， Jammu and Kashmir
Andaman and Nicobar， Lakshadweep
Category 3 Routes which are not included in
category 1 and 2
Source： Ministry of Civil Aviation， 2011
Airlines operating scheduled air transport service on one or more of the routes under Category I， shall be required to provide such service in Categories II and III as indicated below：
（1） The operator shall deploy on routes in Category II at least 10% of the capacity deployed on routes in Category I and of the capacity thus required to be deployed on Category II routes， at least 10% would be deployed on services or segments thereof operated exclusively within the North-Eastern region.
（2） 50% of the capacity deployed in category 1 routes has to be deployed on category 3 routes.
（3） All scheduled carriers can operate to any destination within India as a subject to route dispersal guidelines.
However， there is no such minimum requirement criteria set for foreign carriers to operate international services into India. Private carriers are also prohibited from entering into international services as the regulation enforces that the carrier must have had 5 years of continuous domestic operations and have a minimum fleet size of 20 aircraft.
Despite the constraints， the domestic passenger market has grown considerably over the last decade as passenger numbers have increased from 13 million in 2001 to just over 61 million by 2010 （DGCA， 2011）. Data computed from IATA’s PaxIS database reveals that low-cost carriers had captured 50% of the domestic market by 2011， up from just 20% some five years earlier – this has been triggered by host of new entrant low cost carriers offering low fares， which created fare wars amongst the domiciled carriers. To highlight the level of ‘fare competition’， IATA （2012） reported that the average Indian ticket price is $95， which is around $11 short of the break-even fare. O’Connell et al （2013） investigated the core underlying problems facing Indian based airlines and found that restrictions on foreign ownership， outdated regulatory policies and overtaxed fuel， which in-turn were overlain by industry wide overcapacity issues were the principle contributing factors for the under-performing carriers. The authors estimated that the net losses over the past several years could have amounted to as much as $20 billion. More recently the Indian rupee has devalued by 25% from 2011 to 2013 and this structural shift has heavily impacted the cost base， as 70% of an Indian airline’s operational costs is dollar-denominated. Meanwhile additional variable costs are being levied as the Airports Economic Regulatory Authority （AERA） of India approved a 346% increase in charges at Delhi Airport， effective from May 2012， while Chennai and Kolkata have proposed a 118% and 242% increase respectively to fund their modernisation programs （The Hindu， 2012）. As a result all of the carriers in India with the exception of IndiGo are loss making. Figure 1 shows the net results of India’s airlines from 2003 to 2011 with the accumulated net loss for 2011 registering $2.4 billion， while only IndiGo recorded a net profit of $117 million in 2011. A whopping $8.3 billion in losses were racked up from 2006 to 2011 – with Air India alone losing $6.1 billion over this time period. This government owned carrier with a workforce of 27，000 transported just 13 million passengers in 2011 and the government aims to continue to protect the ailing carrier long into the future by investing $5.8 billion over the next eight years， with the ambition to return it to profitability by 2018 （Flightglobal， 2012）. Doganis （2013） responded by arguing that Air India typified the ethos of state owned carriers of bygone times as it was over-politicised， over-staffed and it had evident symptoms of low productivity， inefficiency， bureaucratic management， poor service quality， no clear forward looking strategies combined with slow and indecisive making response tactics. Figure 1 Net Results of all Indian home carriers in （US$ million）
Source： Flight Global， 2012
3. International traffic trends to/from India
From an international perspective India has entered into Air Service Agreements （ASA’s） with 108 countries， each with varying degrees of restrictions on capacity entitlements， route schedule and frequency （Ministry of Civil Aviation， 2010）. Traditionally， the ASA’s were highly restrictive and national carriers enjoyed the monopoly of serving international routes. Renegotiations of the Air Service Agreements have taken place over the recent years and some liberalisation has transgressed as the private carriers were allowed to operate on international routes provided they operated on the domestic sector for at least five years. The international landscape was evidently changing and by 2013， there were 85 international airlines operating to/from India together with 5 Indian carriers that were conducting international services to over 40 countries. In April 2005， a landmark agreement was signed between India and the US when the bilateral ASA， which was originally signed in 1956 was replaced with an ‘Open Skies’ agreement. This agreement provided both countries with open access to all points within the two countries and virtual freedom to set fares and capacity. Also， in comparison to the previous agreement， the new agreement removed all restrictions on code-share and fifth freedom traffic rights. However restrictions remain which include： ownership and control； nationality； while access to domestic markets remains forbidden. Table 2 details India’s most important Bilateral Air Service agreements and these countries are responsible for most of the international traffic to and from India.
Table 2. Details of the Air Service Agreements for ten important destinations to and from India as of 2010
Country Permitted route Aircraft type Frequency
（weekly） Capacity
（weekly） Designation clause*
USA Any Any Unlimited Unlimited Multiple
UK Any Any Summer 49
Winter 56 Summer 19，600 seats
Winter 22，400 seats Multiple
Hong Kong Any Any Limited
4 frequencies Limited Multiple
Singapore Prescribed Any Limited Limited Multiple
Malaysia Any Any Limited Limited Multiple
Macau Any Any Limited
2 frequencies Limited to 600 seats Dual
Oman Prescribed Any Limited Limited to 5，381 seats Multiple
Qatar Any Any Limited Limited to 5，372 seats Multiple Saudi
Arabia Any Any Limited
31 frequencies Limited to 8，500 seats Single
UAE
（Dubai） Any Any Limited Limited to 29，100 seats
（Mumbai 7，299 seats； Delhi 4，559； Chennai 3，607； Kolkata 2，000； Kochi 2，785； Hyderabad 2，750； Thiruvananthpuram 2，000； Bengaluru 2，100 and Ahmedabad 2，000） Multiple
*Designation Clause： Number of airlines allowed to operate. Source： DGCA （India）， 2010
Apart from the US， the other listed countries in Table 2 all have restrictions on either capacity or on prescribed routes. In the case of Singapore and Oman， there is a prescribed route for operations. In the case of Macau and Saudi Arabia， there is a dual airline designation for Macau and single airline designation for Saudi Arabia， while all of the other countries have capacity limitations. Through an analysis of the top 20 international Origin and Destination （O