Civil Aviation & Airline Industry - An Overview

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This is an updated version of my previous presentation posted on this subject.

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Presentation Transcript

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An Introduction To Civil Aviation & Airline Industry A Presentation by Rajiv Bajaj

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Part I: Aviation

Categories of Aviation:

Categories of Aviation Two broad categories…

1. Military Aviation:

1. Military Aviation Use of aircraft & other flying machines for the purposes of conducting or enabling warfare. Also to provide logistical support & supplies to armed forces.

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Wide variety of military aircraft includes: Bombers Fighters Fighter bombers Transports Trainers Reconnaissance Aircraft.

2. Civil Aviation:

2. Civil Aviation Category of flying representing all non-military aviation, both private and commercial.

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Most countries are members of ICAO & IATA. Work together to establish common standards & recommended practices for civil aviation through these agencies.

I C A O:

I C A O International Civil Aviation Organisation

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A permanent aeronautical organisation of the United Nations. Set up by the Chicago Convention, December 1944.

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A Provisional International Civil Aviation Organization (P.I.C.A.O.) functioned from 6 June, 1945. Formally established on the April 4th, 1947.

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Membership of over 185 governments. Joined for the common purpose of promoting civil aviation on a global scale.

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Headquarter – Montreal, Canada. Regional Offices – Mexico City, Lima, Paris, Dakar, Cairo & Bangkok.

Objectives of ICAO:

To develop principles & techniques of international air navigation; And to promote planning & development of air transport with a view to: 1. Ensure safe & orderly growth of international civil aviation worldwide. 2. Encourage the arts of the aircraft design and operation for the peaceful purposes. Objectives of ICAO

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3. Encourage development of the airways, airports and navigation facilities for international civil aviation. 4. Meet needs of the people of the world for safe regular, efficient and economical air transport. 5. Prevent economic waste caused by unreasonable competition.

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6. Ensure that the rights of the contracting countries are fully respected; and that every contracting country has a fair opportunity to operate international airlines. 7. Avoid discrimination between contracting countries.

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8. Promote safety of flight in international air navigation. 9. Promote generally the development of all aspects of international civil aeronautics. In addition, there several other functions are also carried out by ICAO, which are …

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Reduction of the customs, immigration, public health & other formalities to facilitate easier air transportation through various proposals. Providing technical assistance to states for developing civil aviation programmes as part of UNDP.

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Development of regional plans for ground facilities & services needed for international flying. Dissemination of air transport statistics and studies on aviation economics. Promoting the development of the air law conventions.

ICAO – Freedoms of the Air:

ICAO – Freedoms of the Air A set of commercial aviation rights granting a country's airline (s) the privilege to enter and land in another country's airspace / territory in respect of scheduled international air services. Established at the Chicago Convention. Exchanged at the state level either on bilateral or multilateral basis.

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First Freedom The right to overfly a country without landing. Grants the privilege to fly over the territory of a treaty country without landing. E.g. Air India flight from Delhi to London will have to pass through airspace of several Asian, Middle Eastern & European Countries.

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Second Freedom The right to stop in a country for refueling or maintenance on the way to another, without transferring passengers or cargo (making a technical halt only) These rights are not commonly exercised by most passenger carriers today. However, widely used by air cargo carriers, and are more or less universal between countries.

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Third Freedom It was the First Commercial Freedom. The right to carry passengers or cargo from one's own country to another. E.g. Air India carrying passengers, cargo & mail from Delhi to London.

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Fourth Freedom The right to carry passengers or cargo from another country to one's own. E.g. Air India carrying passengers, cargo & mail between London & Delhi. Third and fourth freedom rights are almost always granted simultaneously in bilateral agreements between countries.

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Fifth Freedom The right to carry passengers or cargo from one's own country to a second country, and from that country to a third country. E.g. Air India carrying passengers, cargo & mail from Delhi to London, and also uplifting traffic from London to New York.

I A T A:

I A T A International Air Transport Association

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Founded in Havana, Cuba, in 1945. It is an association of airlines providing scheduled International services. It brings together approximately 265 airlines, including the worlds largest ones. Flights by these airlines comprise 94 percent of all international scheduled air traffic.

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Provides a forum where interline agreements, other commercial agreements, as well as tariffs are agreed upon. Makes continual efforts to ensure that people, freight & mail can move around the vast global airline network seamlessly - as easily as if they were on a single airline in a single country.

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Membership is open to any airline operating scheduled air transport services. Two broad levels of membership – Active members – who operate international routes; and Associate members - who operate domestic routes only.

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Members' involvement is by way of: Trade Association: Participation is mandatory and embraces all non-commercial aspects of civil aviation, like Technical, Legal, Security, etc. Tariff Coordination: Participation, which is optional and involves negotiations of international fares and rates.

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Basic source of authority is the Annual General Meeting in which all active members have an equal vote. Year-round policy direction is provided by an elected Executive Committee. Actual work is carried out by its financial, legal, technical and traffic committees.

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Coordination of Fares and Rates agreements are entrusted to the IATA Tariff Coordination Conference, with separate meetings considering passenger and cargo matters. Day to day administration of IATA is carried out in a nine member Executive Management Board, headed by a Director General. Has two main offices, one in Montreal, Canada, and the other in Geneva, Switzerland.

Articles of Association:

Articles of Association 1. To promote safe regular economical air transport for benefit of the people of the world, to foster air commerce, and to study problems connected therewith; 2. To provide means for collaboration among air transport enterprises engaged directly or indirectly in international air transport services; 3. To cooperate with ICAO and other international bodies.

Services for Airlines:

Provides platform for finding joint solutions to problems beyond the resources of any single company. The means by which airlines knit their individual routes and traffic handling practices into a worldwide public service system - despite the differences between language, currency & laws etc. Services for Airlines

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Vast pool of experience and information, and the administrator of many common services and enterprises. Acts as a clearing house. Provides training to airlines & travel agency employees.

Services for Governments:

Services for Governments Acts as the medium for coordinating international rates and fares. Provides the only practicable way of drawing upon the experience and expertise of the airlines. Helps to carry out fast & economical transport of international mail. To make certain the needs of commerce and the safety and convenience of the public are served at all the times.

Services for Public:

Services for Public Ensures high standard of operations every where. Ensures proper business practices by the airlines and their agents at the lowest possible fares and the rates consistent with the sound economy. Screens & approves Travel Agents. Stipulates minimum standards to be followed by them.

Civil Aviation Categories:

Includes two major categories… Civil Aviation Categories

1. Scheduled Air Transport:

1. Scheduled Air Transport Includes all passenger & cargo flights operating on regular routes as per a published schedule.

2. General Aviation:

2. General Aviation Includes all other civil flights, private or commercial, which do not operate as per a published schedule.

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Scheduled Air Transport

Airline:

Airline An enterprise that provides air transport services for passengers or freight; Generally holds a recognized operating certificate or license.

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May lease or own their aircraft for providing these services. May form partnerships or alliances with other airlines for mutual benefit.

Scheduled Carriers:

Scheduled Carriers Air transport enterprise offering or operating regular air service / services; For the general public; Between various points; and

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Operate according to a published timetable. May include Legacy or Full Service Carriers or LCC / No-Frills / Budget Carriers.

Legacy / Full Service Carriers:

Legacy / Full Service Carriers Legacy - Something handed down from an ancestor or a predecessor or from the past. A legacy carrier is an established airline that functions as per the older systems of airline operation.

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Follow traditional business models. Typically follow standard airline infrastructure and hierarchy.

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This includes different classes, frequent flier programs, meals & snacks service, etc. May belong to an alliance or partnership. E.g – Air India, Jet Airways etc.

Short-Haul / Regional Operators:

Short-Haul / Regional Operators Airlines operating scheduled services on sectors that have a shorter duration of flying; Flights usually of less than two hours.

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Mostly operate in a specific region; Do not offer services outside the region. E.g. Paramount Airways

Low-Cost / Budget / No-Frills Carriers:

Low-Cost / Budget / No-Frills Carriers Airlines that offer generally low fares. Eliminate many traditional passenger services to keep costs low. Flights with quick turn-around time to maximise aircraft utilisation .

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Provide basic single-class services. Meals generally not served. May be available on extra payment. E.g. Kingfisher Red / Spicejet / Indigo / Go Air

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General Aviation

Non-Scheduled Operators:

Non-Scheduled Operators Air transport enterprise offering air transport services to the public. However, flights are not operated according to a regular or published schedule. Note: Both scheduled and non-scheduled airlines can offer non-scheduled services.

Air Charter Operators:

Air Charter Operators An Air Charter is the business of renting out an entire aircraft. Do not sell individual aircraft seats, whereas airlines specialize in selling transportation by the seat. E.g. TajAir, Raymond, Trans-Bharat

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Focus on individual private aircraft and itineraries; Urgent or time-sensitive freight / cargo; Air ambulance and any other form of ad hoc air transportation.

Fractional Ownership:

Fractional Ownership Fractional ownership of aircraft. Allows corporates and individuals to fly when and where they want to, in the comfort of a private aircraft. Offer members guaranteed annual flying time. E.g. Club One Air

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Members required to share the monthly management cost. Also pay for direct operating cost as and when they fly. No ownership responsibilities or liabilities on members.

Helicopter Services:

Helicopter Services Often used in congested or isolated areas where fixed-wing aircraft cannot take off or land. Can be operated by companies on both, scheduled and non-scheduled basis, as well as on charter basis.

Cargo Carriers:

Cargo Carriers Companies engaged in operating air services exclusively for the purpose of carrying freight (cargo & mail).

Airlines Registered in India:

Airlines Registered in India 1. NACIL (Air India + Indian Airlines) 2. Air India Express 3. Alliance Air 4. Jet Airways 5. Jet Lite 6. Kingfisher 7. Spicejet Paramount Airways Go Air Indigo Kingfisher Red MDLR Jagson Airways Blue Dart (Cargo) Deccan Cargo & Logistics (Cargo) Scheduled Carriers Non-Scheduled Carriers Total 119 Non-Scheduled Operators are registered in India.

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Contemporary Issues In Civil Aviation

Infrastructure:

Infrastructure Ageing infrastructure. Congested Airport terminals. Lack of Aircraft parking Bays & ATM.

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Planned - 500 Airports by 2020. Includes ongoing redevelopment of unused or little used airports; and Construction of new Greenfield and Cargo airports

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Only 80 functional airports equipped to handle scheduled commercial, charter & defence operations. Additionally, another 368 landing strips functioning as makeshift airports. 156 belong to Defence / Semi-Defence sector & various state Govts., while 63 owned by Private sector.

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Peculiar situation – Air Traffic concentrated at few key airports Includes 16 International Airports; and Another 8 that connect Domestic Sectors to International. These 24 Airports account for a whopping 94% of total traffic. Balance spread over 36 smaller or regional airports.

ATF Prices:

ATF Prices Highly fluctuating Aviation Turbine Fuel Prices directly impact airline costs. A steep rise in prices makes lower airfares unviable. Higher airfares affect passenger loads.

Security Concerns:

Security Concerns Aviation is a soft target for terrorists. Increased security concerns post 9/11. High expenditure on aviation security, and hence higher cost of operations.

Economic Downturn:

Economic Downturn Depressed economy pushing airlines into heavy losses. Many airlines have curtailed operations. Mass retrenchment of staff in the industry.

High Operating Costs:

High Operating Costs High taxation on aviation facilities. High Landing charges - 60% higher than neighboring countries. User Development Fees (UDF Charges) adding to ticket costs.

Changing Business Models:

Changing Business Models Current scenario forcing legacy carriers to cut costs & rethink their business models. Many launching all-economy, low-fare services to attract passengers. Cut-throat competition.

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Year 2010 The changed face Of New Delhi The New International Terminal At Delhi

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Delhi Airport T3 – A Reality Now

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End of Part I

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Civil Aviation Organisation in India

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Ministry of Civil Aviation of India is the nodal Ministry. Responsible for: 1.Formulation of national policies / programmes for development & regulation of Civil Aviation 2. Devising & implementing schemes for orderly growth and expansion of civil air transport 3. Overseeing airport facilities, air traffic services and carriage of passengers and goods by air

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Organisations under its purview : 1. Attached / Autonomous Organisations Directorate General of Civil Aviation Bureau of Civil Aviation Security Commission of Railway Safety Indira Gandhi Rashtriya Uran Akademi 2. Air Carriers NACIL (Air India Ltd.+ Indian Airlines Ltd.) / Pawan Hans Helicopters Ltd. 3. Airports - Airports Authority of India

Organisational Structure:

Organisational Structure Secretary - Head of the Ministry 1 Additional Secretary & Financial Adviser 3 Joint Secretaries 7 officers of the level of Director / Deputy Secretary / Financial Controller 10 officers of the level of Under Secretary Functions of the Ministry are distributed under 16 Sections and 1 Pay & Account Office

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Office of the Director General of Civil Aviation Vision “Endeavour to promote safe and efficient Air Transportation through regulation and proactive safety oversight system”

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Policy matters, framing of laws & bilateral agreements are handled at the MCA level The implementation as well as enforcement of such laws & bilateral agreements is handled by the DGCA

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Other functions include : Registration of civil aircraft Formulation of standards of airworthiness for civil aircraft registered in India Grant of certificates of airworthiness

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Licensing of Pilots, Aircraft Maintenance Engineers and Flight Engineers, and conducting examinations and checks for that purpose Licensing of air traffic controllers Certification of aerodromes and ATM facilities Proficiency check of flight crew, and also of other operational personnel such as flight dispatchers and cabin crew

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Granting of Air Operator’s Certificates to Indian carriers Regulation of air transport services operating to / from / within / over India by Indian and foreign operators Clearance of scheduled and non-scheduled flights of such operators

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Conducting accident / incident investigations Taking accident prevention measures Formulation & implementation of Safety Aviation Management Programmes Carrying out amendments to the Aircraft Act, the Aircraft Rules and the Civil Aviation Requirements for complying with the amendments to ICAO Annexes.

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Initiating proposals for amendment to any other Act; or For passing a new Act in order to give effect to an international Convention or amendment to an existing Convention Coordination of ICAO matters with all agencies Taking all necessary action arising out of the Universal Safety Oversight Audit Programme (USOAP) of ICAO

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Supervision of institutes engaged in flying training including simulator training, AME training or any other training related with aviation Objective is to ensure high quality of training Granting approval to aircraft maintenance, repair and manufacturing organisations and their continued monitoring

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To act as a nodal agency for implementing ICAO Annex 9 provisions in India Coordinating facilitation matters at Indian airports including holding meetings of the National Facilitation Committee Coordination at national level for flexi-use of air space by civil and military air traffic agencies Interaction with ICAO for provision of more air routes for civil use through Indian air space

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Advising the Government on: Matters relating to air transport including bilateral air services agreements ICAO matters; and Generally on all technical matters relating to civil aviation; and To act as an overall regulatory and developmental body for civil aviation in the country.

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Keeping a check on aircraft noise and engine emissions in accordance with ICAO Annex 16 and collaborating with the environmental authorities in this matter, if required Promoting indigenous design and manufacture of aircraft and aircraft components by acting as a catalytic agent Approving training programmes of operators for carriage of dangerous goods, issuing authorizations for carriage of dangerous goods, etc.

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Bureau of Civil Aviation Security

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Initially  set up as a Cell in the DGCA in January 1978 on recommendation of Pande Committee constituted after the hijacking  of the Indian Airlines  flight on 10th September,1976   Role - To coordinate, monitor, inspect and train personnel in Civil Aviation Security matters    

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Reorganized into an independent  department on 1st April,1987 under MCA after the Kanishka Tragedy in June  1985. Main responsibility - To lay down standards and measures in  respect of security of  civil flights at International  and  Domestic airports in India BCAS is the regulatory authority for Civil Aviation Security in India

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Headed by an officer of the rank of Director General of Police designated  as Commissioner of Security (Civil Aviation) - COSCA Appropriate authority for implementation of Annexure 17 to Chicago convention of ICAO Also responsible for development, implementation and maintenance of the National Civil Aviation Security Programme (NCASP)

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Laying down Aviation Security Standards in accordance with Annex 17 to Chicago Convention of ICAO for – Airport operators; Airlines operators; and Their security agencies responsible for implementing AVSEC measures

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Monitoring implementation of security rules & regulations, carrying out survey of security needs Ensuring that the persons implementing security controls are appropriately trained and possess all competencies required to perform their duties Planning and coordination of Aviation security matters

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Monitoring implementation of security rules & regulations Carrying out survey / audit of security needs Ensuring that persons implementing security controls are appropriately trained and possess all competencies required to perform their duties Planning and coordination of Aviation security matters

Commission of Railway Safety:

Commission of Railway Safety Under administrative control of the MCA Deals with matters pertaining to safety of rail travel and train operation Entrusted with certain statutory functions as laid down in Railways Act (1989), which are of an inspectorial, investigatory & advisory nature

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Most important duty – To ensure that any new Railway line to be opened for passenger traffic should conform to the standards and specifications prescribed by the Ministry of Railways and the new line is safe in all respects for carrying of passenger traffic Also conducts investigations into railway accidents

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