In my earlier blog I had written about the opportunity for investors in Indian aviation. The rapid growth in the number of air travel - has caught the attention of the civil aviation ministry. Privatization of airports, creation of SEZ (Special Economic Zones) dedicated for civil aviation sector and liberalization of foreign investment policies - all points towards the growing opportunities.
This message has been seriously taken by the global leaders in civil aviation. Boeing and Airbus Industries are establishing Maintenance, Repair and Overhaul (MRO) facilities in India. Boeing is setting up a center in Nagpur, while Airbus is setting up a MRO in Nasik. Both the companies are negotiating with HAL for setting up manufacturing/assembly facility in Bangalore. The state government has announced a creation of SEZ in Bangalore - which has an exclusive focus on aviation. GE Aircraft Engines, Pratt & Witney, Bell Helicopters, ATR will be setting up manufacturing facilities, R&D centers, and maintenance centers in India - probably in Bangalore.
The rapid growth in Indian civil aviation has created huge opportunities for support services. Indian Airlines is planning to offer ground handling and engineering services to other private airlines as well. Kingfisher Airlines has outsourced its ground handling and engineering services to Indian Airlines for a period of two years. This implies that other service providers in USA and Europe etc., can invest in India to tap into this service segment - and offer MRO services to all other airlines in the South Asian region - from Singapore, Indonesia, Malaysia, Sri Lanka to Kazakhstan. This market potential is huge.
The growth in air travel has now created a huge demand for other forms are air travel and business: Charter planes, Charter helicopters, sea planes, Cargo operations, etc. Government of India is in the process of changing the rules which will encourage foreign investors to enter into the other aviation business of charter services, part ownership of private planes, aviation training centers etc. With the growth in American and European air travel being stagnant (or negative), Foreign companies are eagerly looking into Indian skies. Lufthansa has already announced an aggressive investment plan in India - and wants to expand its range of services in India. British Airways and Virgin are also actively looking at ways to expand the range of services that they can offer in India.
Closing Thoughts
The world’s interest in Indian aviation can be gauged by the number of companies coming to India for "Aero 2007". This trade event is the biggest air show in Asia, and the second largest air show in the world! If the air show grows in popularity at the same rate, Aero 2009 will be the world’s largest aviation trade fair in the world - and by then India would have truly emerged as a global power in the world of aviation.
Also See:
Why Invest in India - Power Generation Infrastructure
Why Invest in India: Innovation & Creativity
The Great Indian Renaissance. Written by Dr Manmohan Singh
Why Invest in India: Resurgent Economic Growth in 2007
Why Invest in India - Banking
Why Invest in India: Booming Air Travel Industry
Why Invest in India?
Tuesday, January 30, 2007
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