Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 ALLIANCES, JVs & REGULATORY HURDLES IN AVIATION INDUSTRY KOCHHAR & CO. Indo-US Resurgence Summit, IACC December 2013.

Similar presentations


Presentation on theme: "1 ALLIANCES, JVs & REGULATORY HURDLES IN AVIATION INDUSTRY KOCHHAR & CO. Indo-US Resurgence Summit, IACC December 2013."— Presentation transcript:

1 1 ALLIANCES, JVs & REGULATORY HURDLES IN AVIATION INDUSTRY KOCHHAR & CO. Indo-US Resurgence Summit, IACC December 2013

2 2 The Indian Perspective

3 3 3 Hurdles Infrastructure Infrastructure Bureaucracy / red-tapism Bureaucracy / red-tapism Weak State-owned airline Weak State-owned airline Kingfisher debacle (confidence of investors has taken a tumble) Kingfisher debacle (confidence of investors has taken a tumble) Taxation Taxation Fuel Prices Fuel Prices Airport Charges Airport Charges

4 4 4 Sector-specific Legislative Framework Archaic set of laws Archaic set of laws Aircraft Act, 1934 Aircraft Act, 1934 Aircraft Rules, 1937 Aircraft Rules, 1937 Civil Aviation Requirements & Aeronautical Information Circulars Civil Aviation Requirements & Aeronautical Information Circulars Bilateral Treaties Bilateral Treaties

5 5 5 Upside Untapped potential - currently, under 5% of Indias 1.2 billion people travel by air (IATA) Untapped potential - currently, under 5% of Indias 1.2 billion people travel by air (IATA) Open Sky Open Sky 49% FDI permissible in airlines by international airlines 49% FDI permissible in airlines by international airlines Proposed reduction in ATF cost and review of tax structure Proposed reduction in ATF cost and review of tax structure 100% FDI permissible in existing airports (approval required for FDI beyond 74%) 100% FDI permissible in existing airports (approval required for FDI beyond 74%) 100% FDI under automatic route for Greenfield airports 100% FDI under automatic route for Greenfield airports 100% tax exemption for airport projects for 10 years 100% tax exemption for airport projects for 10 years Proposed multimodal connectivity to facilitate air transportation Proposed multimodal connectivity to facilitate air transportation Regional connectivity – Tier II and Tier III cities Regional connectivity – Tier II and Tier III cities Encouragement for development of MRO hub Encouragement for development of MRO hub

6 6 And thus, emanating from the upside, we have…

7 7 7 Alliances & JVs Galore Airlines Airlines SQ / Tata SQ / Tata Air Asia / Tata Air Asia / Tata Ethiad / Jet Ethiad / Jet SpiceJet … SpiceJet … Airports Airports Delhi Airport – JV b/w GMR, Malaysia Airports Holding & Fraport Delhi Airport – JV b/w GMR, Malaysia Airports Holding & Fraport Hyderabad Airport – JV with Malaysia Airports Holding Hyderabad Airport – JV with Malaysia Airports Holding Bangalore Airport – Siemens Project Ventures, Germany Bangalore Airport – Siemens Project Ventures, Germany MRO MRO Airbus / NACIL – MRO facility in Delhi Airbus / NACIL – MRO facility in Delhi Boeing - JVs with Boeing - JVs with Air India MRO facility - Nagpur Air India MRO facility - Nagpur Tata for manufacture of floor beams for Dreamliner Tata for manufacture of floor beams for Dreamliner IISc and IT firms for development of aerospace-related apps IISc and IT firms for development of aerospace-related apps

8 8 Looking within the region…

9 9 9 Asian perspective … Traditionally export oriented…increasingly becoming reliant on neighbourly trade and tourism Traditionally export oriented…increasingly becoming reliant on neighbourly trade and tourism Growth in China and India largely on back of respective domestic consumption Growth in China and India largely on back of respective domestic consumption Apart from China and India, countries in the South East Asian region (Malaysia, Thailand, Indonesia, Vietnam, Cambodia and the Philippines) are also surging towards greater economic strength Apart from China and India, countries in the South East Asian region (Malaysia, Thailand, Indonesia, Vietnam, Cambodia and the Philippines) are also surging towards greater economic strength

10 10 Asias Growth Potential * Thailand, Vietnam, Cambodia, Philippines & Malaysia Source: World Economic Outlook, January 2013 Country GDP Growth in 2012 (in %) Predicted Growth in GDP for 2013 (in %) China: India: ASEAN – 5*: USA: EU:

11 11 Effect on aviation industry Extraordinary growth in Asia, has a profound effect on global trade and on the aviation industry in particular Extraordinary growth in Asia, has a profound effect on global trade and on the aviation industry in particular To sustain the growth and profitability, the regions carriers are vying for the largest order books with aircraft manufacturers To sustain the growth and profitability, the regions carriers are vying for the largest order books with aircraft manufacturers

12 12 Innovative Measures, JVs and Alliances In addition to large aircraft orders, Asian carriers have introduced certain innovative measures to sustain growth: In addition to large aircraft orders, Asian carriers have introduced certain innovative measures to sustain growth: Economically sustainable long-haul low-cost operations Economically sustainable long-haul low-cost operations Independent cross-border JV LCCs Independent cross-border JV LCCs Undermines foreign ownership constraints Undermines foreign ownership constraints Flattens regulatory barriers Flattens regulatory barriers Circumvents bilateral proscription against right of establishment Circumvents bilateral proscription against right of establishment Establishing low-cost subsidiaries of FSCs Establishing low-cost subsidiaries of FSCs

13 13 The way ahead The innovative JVs and alliances in the aviation industry in Asia are disrupting the global status quo

14 14 Thank you! Kochhar & Co. Piyush Gupta (T): (E):


Download ppt "1 ALLIANCES, JVs & REGULATORY HURDLES IN AVIATION INDUSTRY KOCHHAR & CO. Indo-US Resurgence Summit, IACC December 2013."

Similar presentations


Ads by Google