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REPORT

ON
AVIATION AND DEFENSE
SECTOR

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INDIAN AVIATION SECTOR


INTRODUCTION
A countrys transportation sector plays an integral role in the growth and development of an
economy. According to the Indian Aerospace Industry Analysis, in terms of passenger traffic,
India is currently the ninth largest aviation market in the world. With regards to air cargo
tonnage, India leads the South Asian region -consisting of Afghanistan, Bangladesh, Bhutan,
India, the Maldives, Nepal, Pakistan and Sri Lanka. Currently, India has 128 airports - including
15 international airports.
Over the past ten years the Indian civil aviation sector grew by 14.2% in terms of domestic
passengers and 7.8% in terms of air cargo (in CAGR - compound annual growth rate).In 2010-11
six major Indian carriers with around 400 aircraft catered to 143 million passengers, including 38
million passengers that originated abroad. In 2010-11, Indian airlines carried approximately 1.6
million tons of air cargo. Further growth of the aviation sector between 2011- 2013 is estimated
at 15%.The current state of the civil aviation sector in India indicates that air traffic has increased
considerably in the past few years and removing historic barriers to entry would infuse
competition into the sector and expand the provision of air carrier services as recommended by
Naresh Chandra in his "Competition Issues in Civil Aviation Sector Report. India's domestic
passenger air traffic demand in November 2015 grew 25.1%, the fastest in the world. The
country was followed by the US at 9.1% and China at 8.4%.

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India has the potential to become the third largest aviation market by 2020 and the largest
by 2030. Eyeing big orders from Indian airlines, world's leading aircraft maker Airbus has
said that India's aviation market will grow at over 10 per cent annually in next ten years,
which would be double the average global growth rate.There is large untapped potential for
growth due to the fact that access to aviation is still a dream for nearly 99.5 per cent of its
population, indicates the FICCI-KPMG 'Indian Aviation 2014' report.
The report notes that the next generation of aviation growth in India will be triggered by
regional airports. At present, there are around 450 used/un-used/abandoned airports and airstrips
spread all over the country. Many Indian states, especially in Eastern India, have started taking
pro-active measures to promote air connectivity. These initiatives include reduction in Sales Tax
on ATF, development of no-frills airports, promotion of aviation academies and supportive
policies for airlines and tourism. West Bengal deserves a special mention as it is the first large
state in the country to declare zero per cent Sales Tax on ATF at its regional airports and 15 per
cent Sales Tax on ATF used by additional flights started at its metro airport in Kolkata.
A lot more needs to be done, as several Tier 2/3 cities are still unconnected or underserved. These
involve relaxation on regulations, revising the security requirements, allowing domestic code
sharing, providing free or discounted utilities and connecting infrastructure. The proposed
Essential Air Services Fund (EASF) by Ministry of Civil Aviation (MoCA) needs to be set up
immediately. All this will have a multiplier effect in terms of higher growth of local economic
activities, tourism and employment. The most significant development in the Indian domestic
market is the growing dominance of the low-cost carrier model, which in FY 2013 accounted for
almost 70 percent of the domestic capacity. LCCs have driven the growth in aviation and tourism
through low fares, introduction of regional routes and periodic discount offers. Full service
carriers plan to shift more seats to their low cost offerings in line with market trends. Indian
carriers plan to double their fleet size by 2020 to around 800 aircraft.
NEW ENTRANTS AND THEIR MODE OF ENTRY:
Hero Motors plans to produce light aircrafts at its 300 acre aerospace park in Madhya
Pradesh, in partnership with an unidentified European manufacturer.
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The Tata group is keen to move into full-scale aircraft assembly and production in both
the civil and defence markets. The group sought approval to set up an aerospace
manufacturing facility on the outskirts of Hyderabad. The company has already signed
deals with several International companies, including one to manufacture components for
Boeing. It has assumed a one-third stake in Italys Piaggio Aero, while Israel Aerospace
Industries and the Tata group signed a memorandum of understanding to establish a new
company to develop, manufacture and support a wide range of defence and aerospace
products, including missiles, Unmanned Aerial Vehicles (UAVs), radars, electronic
warfare systems and homeland security systems.
Mahindra & Mahindra has signed deals with BAE Systems and is jointly developing a
five-seat light aircraft with the National Aerospace Laboratories.
Larsen and Toubro is in the process of forming a joint venture with the European EADS
to develop high-tech defence electronics in Pune. This venture will focus on developing
electronic warfare, radar, defence avionics and mobile systems for defence.
Aircraft manufacturing major, Boeing, is in the process of setting up a USD 100 million
MRO facilities in Delhi. The MRO is primarily being set up to take care of the
maintenance needs of the 27 Boeing 787 and 23 Boeing 777 aircrafts ordered by Air
India.
GE Aviation and Air India will jointly invest USD 90 million to set up a MRO facility in
Mumbai.
Indocopters Private Ltd, distributor for Eurocopter helicopters in India, is planning to set
up a helicopter MRO facility in Bhubaneswar, the companys fourth service centre in the
country.
Bharat Electronics long-planned venture to make missile seekers in India with an Israeli
partner may be signed this year. Ashwani Kumar Datt, Chairman and Managing Director,
BEL said We are trying to re-do the business plan and finalize (the details of the
proposed joint venture), The venture, when finalized , may involve technology transfer,
manufacturing at any of BELs nine facilities, as also co-development of seekers for other
missiles. Apart from meeting the needs of the two countries, the MoU of February 2008
also had a provision for exports.
GROWTH DRIVERS :-

Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have been
completed successfully under Public Private Partnership (PPP) mode.
Greenfield airport at Navi Mumbai, Mopa (Goa) and some brownfield airports of
Airports Authority of India (AAI) and 50 airports under the low-cost model are to be
developed all over the country, including under PPP.
Indian aviation is experiencing dramatic growth across the board, from the emergence of
LCC/new carriers to a growing middle-class ready to travel by air as well as growth in
business and leisure travel.
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Indias middle-income population is expected to increase from 160 Million in 2011 to


267 Million by 2016.
Greater focus on infrastructure development; increasing liberalization Open Sky Policy;
AAI driving modernization of airports, Air and Navigation Systems.
Growth in aviation accentuating demand for MRO (maintenance, repair and overhaul)
facilities.
Large scale collaborations/M&A deals Etihad Airways & Jet Airways; Tata Group &
Singapore Airlines, Tata Group & Air Asia.
India plans to increase the number of operational airports to 250 by the year 2030.

CHALLENGES:
Most global tourists bypass India for places such as Bali, Phuket and Genting primarily
because of reasons such as poor connectivity, visa hassles, safety issues and poor
marketing. In 2014, Indias foreign tourist arrival count stood at an abysmal 7.4 million
per annum, as compared to Singapore (12 million), Thailand (25 million), Malaysia (27
million) and China (56 million).
The infamous, oligopolistic 5/20 Rule of 2004 prevents new Indian airlines from flying
abroad till they complete five years and have 20 aircraft. Its abolition is long overdue. A
simpler approach of 1 year/5 aircraft or 2 years/10 aircraft may be adopted, if its outright
abolition is politically risky. Linking it to the complicated domestic flying credit system
should be avoided.
As India embarks on a high-growth phase, safety and security would be key. December
2015 saw a landing aircraft being hit by wild boars in Jabalpur, an engineer getting
sucked into a jet engine in Mumbai, a BSF aircraft crashing in New Delhi, and a bus
ramming into an aircraft in Kolkata all in a space of one month. Heads must roll, starting
from the top.
The Route Dispersal Guidelines (RDG) is an outdated rule that forces Indian carriers to
fly to unviable routes. Other key imperatives for 2016 include the long-pending hive-off
of Air Navigation Services from the Airports Authority of India (AAI); market listing of
AAI; fast-tracking of the second airports in Mumbai, Goa, Chennai and Pune; convincing
leading states to pro-actively reduce the high VAT on ATF; launch of the Regional
Connectivity Scheme; support to helicopters and private jets; and engaging with global
aerospace majors to enhance their contribution to the Make-in-India initiative.
Exceptions apart, a majority of the players in the passenger transport industry are
understood to be incurring significant losses. Other commercial operations in the
aviation space such as cargo transport, maintenance, repair and overhaul (MRO) and the
aircraft manufacturing industry are still at a nascent stage. For instance, the draft National
Civil Aviation Policy 2015 indicates that the present spend by domestic carriers on the
MRO of their fleet is approximately Rs 5,000 crore with a majority of such spending
being done in countries like Sri Lanka, Malaysia and UAE due to lack of adequate
infrastructure in India.
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It would not be an overstatement to say that the cascading and multi-tiered system of
applicable indirect taxes in India copiously contributes to derailing the aviation industry
off its high-growth path. Despite the efforts made by the central government, various
factors under indirect taxes continue to obstruct the growth of the aviation sector and are
yet to be rectified. One such factor is high tax costs on the procurement of Aviation
Turbine Fuel (ATF). The fuel accounts for nearly 40 percent of the operating costs of a
domestic carrier. With an apparent fear of loss of revenue, ATF was excluded from the
purview of Goods and Services Tax (GST) in the initial years of implementation under
the draft 100th Constitutional Amendment Bill, 2015. Levy of service tax on airport
levies such as Passenger Service Fee and other similar levies, service tax on MRO
activities undertaken for foreign airlines etc., swell the costs for airline operations.

INITIATIVES TAKEN BY THE GOVERNMENT:


The Airports Authority of India (AAI) plans to revive and operationalise around 50
airports in India over the next 10 years to improve regional and remote air connectivity.
Gujarat is expected to get a second international airport at Dholera. The
state
government has formed Dholera International Airport Co. Ltd. and is obtaining approvals
from the union government.
The Directorate General of Civil Aviation (DGCA) has given its approval to Air Indias
maintenance, repair and overhaul (MRO) unit.
The Government of India approved a proposal to set up a second airport in the National
Capital Region.
The Government of India expects to finalize the new aviation policy and revised
international flying norms for domestic carriers soon; the government may remove the
5/20 norms for domestic airlines in this new policy.

GOVERNMENT POLICIES/INTERVENTIONS:
Positive developments:
Jet fuel prices continued to be benign due to global softening of crude
Why the Indian government has been reluctant to help airlines become viable can be easily
understood by a simple truism:
India has always seen flying as a luxury, never really coming around to the point that
in today's times flying has become a necessity.
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Another matter of concern is the lack of emphasis of this government on creating


aviation infrastructure. Though the policy speaks of enhanced regional connectivity, it
has no firm plans for augmenting airport and other related infrastructure to support
regional flying.
Visa-on-arrival expands to more countries, but still forms less than half a percent of
tourism arrivals.
India is geographically perfectly positioned to hub a passenger from Sydney to
London, from Frankfurt to Bali, Beijing to Nairobi and Jakarta to Jeddah. Delhi and
Mumbai have swank new terminal
ATF (Aviation Turbine Fuel)accounts for about 40 percent of an airlines operational
costs.
State governments throw up their hands often in this matter, saying they will lose
revenue if ATF taxation is brought down. In the end, airlines continue to pile losses
despite a good business environment the only exceptions to this being IndiGo and
GoAir.
The Civil Aviation Policy is widely expected to also recommend that all airlines not
only participate in the ambitious regional connectivity scheme but also increase
domestic connectivity
Need to get more remote locations on the countrys aviation map but the move is
fraught with litigation and opposition from airlines since they already deploy a certain
specified capacity on non-viable domestic routes.

PROPOSED CHANGES IN RULES AND POLICIES:


The government has proposed a new domestic flying credits (DFCs) rule to decide
whether a local airline is eligible to fly on overseas routes, replacing the so-called 5/20
regulation, which put onerous obligations on new airlines seeking to operate international
flights.
The new rule aims to encourage airlines to fly to remote destinations within India such as
those in the North-east and Andaman Islands to enhance regional connectivity and
thereby enabling smaller airports to feed into bigger Indian airports. Airlines can earn
more credits by flying to tier II and tier III airports. Airlines can earn five times more
credit if they are flying to unused airports, according to the government proposal. Once
they have accumulated a certain level of DFCs, they will be permitted to fly abroad.
Under the existing 5/20 rule, Indian airlines had to wait for five years and have a fleet of
20 aircraft before they could fly abroad. With the new guidelines, the aviation ministry
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hopes to transform the countrys six metro airports into international hubs and reverse the
trend of local airlines using hubs in West Asia and South-east Asia for international
operations.
The ministry has also mooted the idea of credits trading, under which 25-30% of such
DFCs can be purchased from regional airlines. These criteria will apply to new airlines
while existing airlines such as Jet Airways and Air India will have to earn more DFCs to
get new international routes. Under the proposed rule, an airline desiring to fly on
international routes must have earned a minimum of 200 DFCs. Also, it should have a
minimum of five airplanes to fly international, against the 20 needed currently.
The government has mooted a waiver of parking and landing charges at all airports for
flights with less than 80 seats to promote regional connectivity.
The government has also mooted a proposal restricting new airlines from flying overseas
destinations of less than six hours in the initial phase, putting West Asian and Singapore
airports out of the scope.

GROWTH OPPORTUNITIES:
Passenger and air cargo growth are among the key indicators of the well-being of a nation
and Indias passenger growth story has been exceptional, despite the vicissitudes of
airlines. During the last 10 years, the compounded annual growth rate of passenger traffic
has been about 15 per cent. As regards air cargo, which undoubtedly is languishing, there
lies enormous untapped potential. In 2011, the total air-cargo volume handled was 2.3
million tonnes by all Indian airports which was far less than that handled by individual
airports like Hong Kong, Memphis, Shanghai, Incheon, Anchorage and Paris. The
Ministry of Civil Aviation has forecast that the total cargo throughput at Indian airports is
expected to grow 7.6 times in the next 20 years (compounded annual growth rate
[CAGR] of 11.2 per cent).
As per estimates, domestic air traffic will touch 160-180 million passengers per annum in
the next 10 years and the international traffic will exceed 80 million passengers per
annum from the current level of 60 million domestic and 40 million international
passengers respectively. According to International Air Transport Associations (IATA)
Airline Industry Forecast 2012-16, Indias domestic air travel market would be among the
top five globally, experiencing the second highest growth rate.
Domestic air traffic that would be carried by scheduled carriers in India in 2020-21, is set
to cross 164 million passengers as against 54 million in 2010-11, suggesting a growth of
three times the present traffic in ten years. International passengers to and from India by
2020-21 will be 92 million, implying a growth of about 2.4 times the traffic of 38 million
in 2010-11. Forecast for 2030-31 reveals that domestic air passengers to be carried in
India will be 438 million and that of international passengers will be 217 million.
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Sales of air transport infrastructure services companies such as Airports Authority of


India and Delhi International Airport is expected to rise by 11-13 per cent in 2015-16. We
expect passenger traffic at Indian airports to grow by 8.9 per cent during this period,
which is likely to augur well for these companies. In FY11, an investment of Rs 26.53 bn
was planned in ports and Rs 6.63 bn in airports infrastructure. These will be further aided
by substantial investments in development of airports in tier-II cities as well as
improvement of infrastructure in existing airports.

MROs:
Some of the positive measures taken by the government over the past few years:
Extension of time period for consumption/installation of parts, and testing equipment
imported for Maintenance, Repairs and Overhaul (MRO) of aircraft by MRO units from 3
months to one year.
MRO industry for the first time is allowed to go in for ECB.
The Royalty charged by the AAI, from MRO, reduced from 36.3% to 13%.
Testing equipment can now be imported duty-free by the MROs.
It is expected that IAF would spend around USD 18.79 billion for MRO and related
activities by 2025 and, at present, the work is getting overburdened on HAL alone in the
civil MRO market. The Indian civil aviation MRO market is estimated to grow at a
CAGR of about 14-15 percent to USD 4.33 billion by 2025.
The latest entry of Reliance Defence and Aerospace (RDA) into the defence and
aerospace sector has provoked an understanding and confidence in the industry also,
fuelled by the Make in India policy.RDA has proudly announced themselves as military
helicopter manufacturer and integrator with a plan to develop a USD 1 billion Dhirubhai
Ambani Aerospace Park (DAAP).The group is also planning to explore other
opportunities is in the naval platforms, air mobility, avionics and Network Centric
Welfare (NCW). The group is eyeing on closing potential projects worth USD 22.8
billion in the defence sector.
The Indian air cargo industry will also benefit from evolving MRO industry as it will
directly contribute to heavy machinery and spare parts import demand and save high cost
incurred when aircraft MRO work is outsourced aboard. In-house servicing facility
means faster recovery of aircraft domestically and reduced dwell-time adding to cargo
throughput. With international players setting up their MRO facilities in India, this will
benefit in more foreign earnings driving more international and domestic airlines into the
country.
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On a global average, it is recently estimated that the Indian MRO industry will have a
potential of USD 30 billion by 2020.

MRO FACILITIES:-

HANGARS:-

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Air Works has three major facilities in India with hangars at its base in Mumbai and
Delhi dedicated to GA. A third facility at Hosur, near Bengaluru, handles commercial
airline MRO, carrying out C-checks on B737s, A320s and ATR turboprops. The
company also has line maintenance centres at nine other locations around the country.
Air Works plans to acquire at least two more hangars in India for GA and may look at
an opportunity to gain a toehold in the Middle East. Along with this strategy, Air Works
is likely to continue to pursue commercial aviation through its narrow body hangars and
a wide body hangar currently being built at Hosur. Last year, the company also took
over the British firm, Air Livery, Europes largest aircraft painting business. A new
wide body paint shop is being built at Hosur. It will be the only such facility in the
Asia-Pacific outside of China.
Another big project is the JV between Malaysia Airlines, GMR Hyderabad International
Airport and local carrier, Jet Airways. MAS-GMR Aerospace, as it is known, has
already signed a 10-year deal with Jet to provide heavy maintenance for the carriers
entire fleet. The facility initially will offer C- and D-checks for A320s and B737s
before moving onto long-haul types.
Dassault Aviation, a part of French aerospace company Groupe Dassault, has drawn up
an ambitious map for expansion in the Indian market. The company, with a majority
share in the Indian business jet market, is looking at setting up an MRO centre next
year. Its business jets are sold under the Falcon brand name.
INVESTMENT OPPORTUNITIES :-

300 business jets, 300 small aircraft and 250 helicopters are expected to be added to the
current fleet in the next five years.
Growth in aviation is accentuating demand for MRO facilities.
Greenfield airports under PPP at Navi Mumbai and Mopa (Goa).
The development of new airports the AAI aims to bring around 250 airports under
operation across the country by 2020.
The North-east region the AAI plans to develop Guwahati as an inter-regional hub and
Agartala, Imphal and Dibrugarh as intra-regional hubs.
The AAI plans to spend USD 1.3 Billion on non-metro projects between 2013 and 2017,
focusing on the modernisation and up-gradation of airports.
Indian airports are emulating the SEZ Aerotropolis model to enhance revenues, focus on
revenues from retail, advertising and vehicle parking, security equipment and services.
According to data released by the Department of Industrial Policy and Promotion (DIPP),
FDI inflows in air transport (including air freight) between April 2000 and June 2015
stood at US$ 573.12 million.
Key investments and developments in Indias aviation industry include:
The Ministry of Civil Aviation has signed Memorandum of Understanding (MoU) with
Finland, Kazakhstan, Kenya, Sweden, Norway, Denmark, Oman and Ethiopia for
increased co-operation between the countries in terms of additional seats, sharing of
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airlines codes, increased frequencies and additional points of call, during the International
Civil Aviation Negotiations (ICAN),2015 held in Antalya, Turkey.
Tata Advanced Systems (TASL) has signed a joint venture with American aircraft
manufacturing major, Boeing, to establish a centre of excellence for manufacturing
aerostructures for Apache helicopter initially and collaborate on integrated systems
development opportunities in India in the long term.
US-based aircraft manufacturer Boeing plans to assemble one of its two helicopters
namely, Chinook (heavy-lift) or Apache (attack type) in India, thus becoming yet another
global company to invest in India encouraged by the Make in India campaign.
Airbus SAS, one of the top two aircraft manufacturers in the world, plans to open aircraft
maintenance and repair overhaul (MRO) facility in India.
Airbus, the worlds leading aircraft maker, expects Indias aviation industry to grow at
over 10 per cent annually in the next decade, almost double the average growth rate of
the global aviation industry.
Eyeing large orders from Indian airlines, Airbus has committed to source products worth
US$ 2 billion cumulatively over the next five years from India; the company plans to
provide customised maintenance and other services closer to the base for all its airline
customers in India.
French drone-maker LH Aviation signed a Memorandum of Understanding (MoU) with
Indias OIS Advanced Technologies on June 19, 2015 to manufacture tactical drones in
India through an industrial license.
Mahindra Group expanded its partnership with GE Aviation by signing an agreement to
manufacture aero structures at the Groups new aerospace facility in Bengaluru.
SpiceJet plans to enter a deal with Boeing Co. and Airbus Group SE to buy 80-120 jet
airplanes which would help to expand their fleet and rebuild its business.

FOREIGN INVESTORS :

Airbus (France)
Boeing International Corporation (USA)
AirAsia (Malaysia)
Rolls Royce (UK)
Frankfurt Airport Services Worldwide (Germany)
Honeywell Aerospace (USA)
Malaysia Airports Holdings Berhad (Malaysia)
GE Aviation (USA)
Airports Company South Africa Global (South Africa)
Alcoa Fastening Systems Aerospace (USA)

VAROUS SYSTEMS REQUIRING AIR-CONDITIONING IN PLANE:

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Aircraft are equipped with several systems that process and accommodate air through all
usages needed aboard. Among those systems are to be found in particular:
Engine bleed air
Air conditioning
Cabin pressure control
Ventilation control
Wing and nacelle anti-ice
Additional cooling of avionics, galleys and hydraulics
Humidification and dryer
Integrated air management systems consist of several hundreds of parts located all across
the aircraft (engine, nacelle, pylon, wing, belly fairing, fuselage, cockpit, cabin, tail core)
that process all air circulation within the aircraft from the engine bleed port to the cabin.
ALLIED INDUSTRIES
Aircraft leathers: aviation interiors.
Aircraft finish
Custom aircraft cabinetry, floor plan modifications, and aero medical conversions
Ambulance installation for fixed wing aircraft and helicopters
Cab services
Eating joints in airports/lounges
Air Hostess training institutes
Perishable Air Cargo

PERISHABLE AIR CARGO:


Air cargo is used mostly for shipping goods that are highly valuable, time-sensitive and
perishable. Globally, more than one third of the value of goods traded internationally is
transported by air and therefore air cargo industry is considered as a barometer of global
economic health.
Perishable goods (such as fruits, flowers and vegetables) were among the first
commodities carried by air. This kind of items deteriorates with time or exposition to
adverse temperature and humidity.
With years of operating experience, airlines have developed effective handling techniques
for chilled and frozen products, providing shippers with optimum, cost-efficient
packaging methods.

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The cargo that requires refrigeration and freezing during transport for whole-course
temperature control, this is especially applicable for the foods, drugs, reagent, biological
products, human organs, frozen embryos and others which are sensitive to temperature
and humidity change or to time limit of transport and prone to deterioration.
A new air cargo hub for perishable goods is to be based at Sardar Vallabhbhai Patel
International Airport. Gujarat Agro Industries, a government enterprise, is behind the
project aimed at capitalizing on the huge amount of perishables, including vegetables,
fruits and exotic flowers.
What is important is to enable the growth of this trade by facilitating appropriate
infrastructure for handling, storage and faster movement of these goods for exports in the
cargo terminals. Cool chain processes effectively safeguard product quality and maximize
shelf life, thereby enhancing profitability.

Cold chain facilities


The composition of trade in fresh agro-food products is shifting towards horticultural products,
fruits and vegetables, fish, and spices which have led to an increase in demand for airfreight to
meet the delivery times. The quality of logistics is an essential element of competitive advantage.
Cost is equally important and provides an advantage for countries that already have welldeveloped air freight routes, whether through scheduled freighters or space on passenger flights.
Non-Resident Indian population living in Middle-East and in other parts of the world continues
to source a large part of their food stuff requirements including native grown vegetables from
India. Belly space available from the passenger aircrafts flying to these destinations provides an
ideal opportunity for exporters of such items to supply the perishable items of food at
competitive prices. However, what is important is to enable the growth of this trade by
facilitating appropriate infrastructure for handling, storage and faster movement of these goods
for exports in the cargo terminals. Cool chain processes effectively safeguard product quality and
maximize shelf life, thereby enhancing profitability.

Facilities for special cargo handling in other countries


Nairobi has a pair of on-airport refrigerated storage facilities operated by the ground-handling
subsidiary of Kenya Airways, as well as a stand-alone cold storage operated by DHL on the
airport and Swiss port off the airport. These are highly automated.
Possibly the most advanced cold storage is the Dubai Flower Center, a multi-storey facility
located next to the Dubai Cargo Village. It is designed for the storage and processing of flowers
imported primarily from Africa for both the local market and for distribution to the region. The
initial phase on this center is designed for an annual throughout of up to 180,000 tons of flowers.
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The perishable handling area in Dubai Cargo Mega Terminal is about 4623 square metres floor
space, with 3927 square metres of 218 individual cells of temperature zones.
The 9,000 m perishable centre, for instance in Cargo City, Frankfurt Airport, offers 20 different
climate zones.
Changi air freight terminals offer Dedicated/specialized perishable handling facility that is
temperature monitored and humidity controlled to cater to different types of requirements and a
wide range of commodities
Source: World Bank Report on Air Freight Study, 2009

Air Cargo Logistics in India


Benchmarked against these best practices in the world, it is observed in most Indian airports
there is need to focus more on these areas so that handling of e.g. agricultural and other
perishables/pharmaceuticals for which India has potential is done in the best possible manner to
boost their trade. MIAL has claimed there will be no shortage or paucity of space for special
handling of cold storage cargo with two dedicated facilities said to be in operation one each by
MIAL and Air India for export perishable and Pharma. India should aim to benefit from the
benefits of cold chain logistics for air cargo operations like other countries. Ministry of
Commerce has set an export target of US$ 42 Billion for 2016-17 for pharmaceutical sector
alone.28 This suggests a huge potential for air cargo business in this segment.
WAREHOUSE FACILITIES AT AIRPORTS: To better facilitate the shipment of temperature-sensitive goods and pharmaceutical
products, Cathay Pacific Cargo has signed a master agreement with DoKaSch
temperature solutions for renting the latest-technology active containers, the RKN and
RAP Opticooler . The service will be rolled out across the airlines network in the first
quarter of 2015.
The Northeast region of the country is expected to get a dedicated air cargo service soon
to cater to the business community's needs for fast movement of goods to and from the
region. Mumbai-based Sovika Aviation Services said that it would launch a dedicated
cargo airline service to cater to all major airports of the north-eastern states from
February 2015.

COMPETITORS IN AVIATION INDUSTRY:


ZECO

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Established in 1989, in New Delhi, India, ZECO today has come a long way to become
world class manufacturer of air management system, delivering reliable and superior
quality products. With incredible expertise in design and selection of air management
system, the company is serving the customers according to the application with
innovative technology, high quality and cost effective solutions. The company is
continuously meeting the demands of the changing and challenging market environment
around the globe.
CARRIER
Established in 1986,Carrier is the world's leader in high technology heating, airconditioning and refrigeration solutions. Carrier experts provide sustainable solutions,
integrating energy efficient products, building controls, and energy services for
residential, commercial, retail, transport and food service customers. Founded by the
inventor of modern air conditioning, Carrier improves the world around us through
engineered innovation and environmental stewardship.
DAIKIN
Airports present an array of air conditioning challenges with large atriums and
concourses connected to the smaller enclosures of terminal gates and administrative
offices. As a comprehensive air conditioning manufacturer, Daikin offers an integrated
approach that delivers customized solutions for energy savings and comfortable interior
spaces in providing precise air control of multiple zones. Leveraging our experience in
large-scale projects, Daikin can provide the appropriate solution to all air conditioning
needs.

COMPETITORS IN DEFENSE SECTOR:


1. WEISS - MOBILE AIR-CONDITIONING SYSTEMS FOR THE DEFENCE MARKET
Mobile air conditioning systems
Weiss' mobile air conditioning systems are essential military and disaster prevention equipment.
Compact, indestructible, reliable and simple to operate, our air conditioning units are particularly
useful in situations where it is necessary to combat extreme climatic conditions.
The systems and their individual parts are furnished with NATO stock numbers (NSN) and in
many cases have special technical documentation.
Military tent air conditioning units
Weiss' tent air conditioning units suitable for military use include type ZKB 10/6 MFA and the
15/10 MFA (split AC system). The systems are available in a condenser and evaporator module
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and can be installed as a complete system (all modules outside the tent) or a split-system
(evaporator module inside the tent). The units can operate sufficiently as an air recirculation
system for use in harsh environments.
Our units are easily transportable with a compact construction and integrated frames for military
camps that are always on the move. They are easy to maintain and have easily removable covers
to access the system. The system integrates a fully hermetic refrigerant circuit with a scroll
compressor and an airflow section with filter, cooler and supply fan.
The units have a cooling / heating (electrical) option. There is a separate heating module
available, which can be used as a fuel heater (diesel) with a complete water-glycol circuit and
pump.
Compact air conditioning system
Weiss has expanded its proven series to include a new model, distinguished by two innovative
features: even better air conditioning performance / capacity and optional use with integrated
fuel heater.
Special features include:
Compact design with transport frame
Operation as an air recirculation system
Electric heater optional with fuel heater available
Tested to military standards
2. LLOYD ELECTRIC AND ENGINEERING - HEATING, VENTILATION AND AIR
CONDITIONING FOR THE RAILROAD INDUSTRY
Air conditioning systems for defence applications
Lloyd has extended its capability to design, develop and manufacture defence application ACs,
from 2TR to 4TR capacity with a rugged design that is suitable for cross-country terrains (-20C
to 60C).
Lloyd's defence application ACs comply with JSS 55555 environmental specifications, while
being made from lightweight aluminium alloy with chemical agent resistive coating (CRCA).
The product is eco-friendly, R134A refrigerant, part of the safety group A1 and has a zero ozone
depletion potential (ODP) level.

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3. SIGMA
SIGMA is a world leader for over 30 years in the design, manufacture, supply and service of
specialized air conditioning equipment suitable for the transportation rail, mining, industrial and
defence industries, where high ambient temperatures, severe vibration, dense particulate and
corrosive environments prevail.
SIGMA have developed a comprehensive range of air conditioning and filtration equipment now
manufactured for the transportation, industrial, mining, and defence markets on a global basis.
The innovative and unique SIGMA designed equipment has attracted worldwide interest and
acceptance, and many enquiries have been received from major industries throughout the world.
SIGMA is a leading global company in the development of Transport and Heavy Duty HVAC
Systems for the Rail, Mining, Industrial and the demanding Defence markets.
The World of SIGMA truly covers the Globe across several market groups. The products are
produced with over 30 years of broad experience in the air conditioning markets.
SIGMA provides a "whole of life" outlook for its products and provides tailored system solutions
that deliver true value to our customers.
SIGMA is a Quality Assured company to ISO9001 at all its operations and has extensive
Research and Development facilities to ensure SIGMA's equipment delivers maximum
performance, value and reliability with minimum overall life cycle cost to our customers.

4. DC AIRCO
Military Air Conditioning
Standard or custom made Air conditioners for Military and Defence

DC Airco is supplying standard and custom made products to defence companies in


the
EU
and
USA
to
cool
equipment
and
/
or
people.
Several defence contractors have selected DC Airco as their supplier for cooling solar/diesel
powered equipment shelters (DC 12500HA 24-48 VDC) and radar trucks (DC 9300HA 24-48
VDC) in remote areas.

For unmanned border patrol the DC12500 telecom unit is mainly used in 24 or 48 VDC in desert
areas.
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For vehicles also the DC9300 split unit is used (same unit as in mining refuge shelters)
The DC 9300 split unit is developed in 2007 to cool fuel cell powered telecom sites and is later
used for railway projects, mining and defence. A larger version of the DC 9300 is called DC
17000.

The benefits of DC AIRCO products:

DC Airco's products operate trouble free in hard environments ranging from hot and dirty mining
applications to hot and dusty deserts. These DC powered direct current air conditioners are
robust and reliable, ideal for use on vibrating vehicles.

TRENDS IN AVIATION TO WATCH OUT FOR IN 2016:


Air Asia: The sudden slowdown in Air Asias growth plans seems fairly mysterious. The excuse
they are clutching on towaiting for a change the 5/20 ruledoesnt hold water as the plans for
growth were based on the domestic market. It points to a cash crunch with the parent company in
Malaysia, as is evidenced by deferred aircraft deliveries and lower profit. Air Asia should also
get rid of its stubbornness and start operating flights into the financial capital. Once Air Asia gets
rid of its stubbornness and its confusion in its strategy in India, as well as its financial issues, it
should get into the growth path in the Indian market. Further, flying international is not going to
be the elixir for Air Asia. India is not yet a market for international low-cost travel, as is seen by
the small proportion of international low-cost capacity versus the full-service hub-and-spoke
model.
Vistara: Watch out for the downsizing or the scrapping of the premium economy class, a misfit
in a domestic market that is hungry for low fares and is used to a seat being commoditized rather
than marketed. Vistaras pricing is hurting its load factors, but its measured growth strategy,
waiting for the five-year sentence to end to fly international, will help cut its losses.
The others:
IndiGo: It has 97 operational aircraft, 180 more already ordered for which deliveries begin later
this year and then these 250 aircraft which start coming in by 2018. Till 2026 or roughly in the
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next decade, some of the total 530 odd aircraft would be used as replacements. How many that
will be we know not but it is fair to assume that within the next 10 years, IndiGo's fleet alone
may well be the size of the combined fleet size of all airlines operating in India at present.
SpiceJet: The second largest airline by passengers, has a fleet of 18 Boeing 737s and 14 Q400
aircraft as per information available on the airline's own website. It has 42 Boeing 737Max
planes on order and claims to have begun negotiations for another 100 aircraft with both, Airbus
and Boeing. Clearly, even if this 100 aircraft order is finalized and deliveries begin over the next
few years, SpiceJet's fleet plans are nowhere near IndiGo's ambitious ones.
GoAir: It has 72 Airbus 320neos on order which begin coming in by 2016 and continue till
2020. Its present fleet is just 19 aircraft. So even after the deliveries of the 72 aircraft are
completed, Go Air is unlikely to be a serious threat to IndiGo in the near future.

International carriers: They will continue with their organic growth into India, with secondary
cities such as Amritsar, Jaipur and Tiruchirappalli coming into focus.

SOURCES:
http://www.ibef.org/industry/indian-aviation.aspx
http://www.daikin.com/products/ac/applications/modals/17_airport/index.html

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http://www.cmie.com/kommon/bin/sr.php?
kall=wclrdhtm&nvdt=20150515093314850&nvpc=099000000000&nvtype=ANALYSIS+
%26+OUTLOOK&ver=pf
http://www.livemint.com/Industry/vaocwLAx5EvO6o3aOpeSlM/The-irony-of-the-Indianaviation-industry.html
https://www.crisilresearch.com/CuttingEdge/Content/Economy/HeadLinePDF/Airlines.pdf
http://www.sps-aviation.com/story_issue.asp?Article=1131
http://www.financialexpress.com/article/fe-columnist/right-policy-push-can-help-aviation-grow20-pct/188823/
http://forbesindia.com/blog/economy-policy/is-the-indian-aviation-industry-finally-airborne/
http://www.firstpost.com/business/for-the-aviation-sector-to-grow-in-india-it-needs-handholdingby-the-policy-makers-2561934.html
http://www.businessair.com/aviation-business-directory/aircraft%20related%20industries
civilaviation.gov.in/sites/default/files/moca_001669.pdf
http://aviationspaceindia.com/content/aviation-mro-india-opportunities-and-challenges
http://www.stattimes.com/index.php/make-in-india-mro-makes-it-happen/
https://www.pwc.in/assets/pdfs/industries/general-aviation-070312.pdf

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