New Challenges of 21st Century

A) An Important Engine For Economic Growth

• In the global and Indian scene there is rapid economic changes.
• In this scenario, Civil Aviation is recognized an important vehicle for economic growth.
• Over 2000 million passengers globally per year use airlines for leisure & business travel.
• Around 40% of the worlds manufactured goods by value are transported by air only.

• Aviation is the main link for boosting of tourism.
• Nearly 98% of outbound travel is by air
• Similarly about 90% tourist arrivals in India by air.
• In the present context with the liberalized open sky policy and introduction of low budget airlines, no frill airlines, domestic tourism has seen a big boom and many new areas have been opened up for tourism activities.
• Domestic air travel increased by more than 25% last year.
• Open Sky Policy has also increased seat capacity and this boosted international tourism arrivals.
• International travel increased by nearly 15% last year. Seat Capacity in the major traffic generating markets during peak season was bottle neck for tourism growth.
• With growth of tourism, it has contributed & boosted India’s GDP.
• It is estimated tourism contributed 5.8% in countries over all GDP.
• Tourism linked with aviation industry can help in increasing foreign exchange earnings, foreign exchange earnings 16% growth ($5 billion in 2005)
• Tourism is the largest sector in the world wide export of good & services.
• At over $560 billion, it is larger than automatic, chemicals, fuels & other sector
• Tertiary/ supplementary benefits of tourism are huge.
• The Satellites accounting figures of world travel & tourism council suggest that $ 11.33 billion travel & tourism Industry in India (2000) supported a $ 23.8 Billion travel & tourism related industry.
• Tourism backed by Civil Aviation can create more employment – Tourism with lower investment generates more jobs than any other industry in the world.
• As per WTTC, the travel & tourism economy in India which includes aviation, Hotel, Entertainment, transport etc. currently account for 17.4 million jobs in India or 5.8% of total employment.
• This has potential rise to 25 million jobs or 6.8% of total employment by 2010.
• Tourism & Aviation links thus bring real economic efficiency.

• India ranks quite behind in terms of global tourist arrivals.
• India receives a meager 0.39% of the world tourist arrivals.
• India receives a mere 0.68% of world tourism receipts.
• India is ranked 140th for contribution of travel & tourism industry to GDP.
• Huge potential for future development if proactive policy is evolved.
• Charter flights needed to plug in demand supply gap. Increased Inbound/outbound
  can solve the imbalance

• Capacity constraints – from many emerging markets (South America, CIE countries).
• Lack of proper aviation infrastructure.
• High Airport charges (landing, Navigation, Parking charges).
• Initiatives to have better route distribution agreement and non utilization of seat capacity which is available due to bi-lateral agreements.
• More Domestic /Private Airlines be permitted to fly internationally to areas like Iran, Turkey, Sweden, Middle East, where we lack of air – connectivity.
• Foreign Nationals when will use those airlines will help in earning more foreign exchange for the country.
• Smaller aircraft & Helicopter services for remote areas operations, point to point service such operations can boost tourism to hinterland areas (specially North East).
• Domestic Hubs & International Hubs concept need to be introduced. Mumbai be converted into International Airline Hub by treating it as Special Economic Zone. Fuel can be provided at international prices.
• This will encourage many international flights to touch down in India.
• This will help increased tourist arrivals & will provide improved connectivity.
• Advantage is now goes to Dubai which is real hub for international airlines, where as India can take this position.
• For domestic sector also airline can have maximum operational efficiency & financial gains through Hub-Spoke (Feeder route). Connectivity concept, Nagpur, Hyderabd, Bhubanewar, Bhopal & especially Nagpur can be considered for this Hub spoke concept. This will improve domestic connectivity.