The Indian Aviation Industry - Case Study Example

As a means of transport, air carriers in the form of airplanes make the transport of goods and labor easier and faster in comparison to most of the other forms of transport. In addition to the above, air transport is more convenient in comparison to other equally fast forms of travel like electric trains.

This is due to the fact that airplanes use airways while electric trains would have to run on defined rails. This does not in any way imply that planes do not have defined paths that they follow, but the airway is a more flexible route in comparison to a fixed railroad. Air travel is a lot more convenient mode of travel for most passengers who’d like to travel overseas. As the fastest inter-continental mode of travel, it is preferred over the other modes of transport as it is the best for transporting perishable goods like fruits and flowers.

Expatriates also prefer this mode of travel as it is more convenient. Therefore, we can conclusively say that air transport beats many other modes of transport when it comes to overseas travel. Not only do producers of perishable goods find it more convenient, but expatriates also prefer it above the rest. Virgin Atlantic Airlines came up with a faster mode of transport by air, Virgin Galactic, which is basically a plane with faster propulsion through space. Having considered the nature of air travel, it is prudent to note that air safety is essential.

There are basic rules that apply to any entity that is registered as a player in the aviation industry. These rules are made so that air safety is guaranteed for all users. For instance, planes are supposed to be frequently serviced, while those of a certain age are discarded to avoid mishaps that may endanger passengers. Airports also need to observe certain minimum rules, which regulate their capacities for traffic among other considerations. India’s aviation industry handles in excess of 2 billion passengers and over 40 million tonnes of cargo annually.

This, by all standards, ranks among the highest traffic anywhere in the whole world. The above-mentioned statistics rank India’s aviation industry among the ten biggest aviation markets worldwide. India Brand Equity Foundation (2012) places the number of foreign airlines that operate in India at 87. The Indian-owned ones are a paltry five. At 27000 aircraft, the number of planes that are used in India is way above that used in many other countries. With such statistics, it is expected that the only trend would be an exponential growth curve.

One way or the other, this expectation is not what has been there for a while now. First off, the overhead needed in starting an airline company in India is quite prohibitive. The amount paid in taxes leads the way in factors leading to high business start-up costs. As a result, many airlines resort to passing the costs to customers through high airfares. The ripple effect is that the higher the airfares, the lower the number of passengers who prefer airlines to other modes of travel. Over a period when passenger numbers do not appreciate, airlines continue experiencing losses.

Consequently, a number of them are put out of business. However, the policies introduced by India’s government in 2003 created a situation where foreign companies could operate airlines. As a government-run airline, Air India has had an upper hand due to subsidies bequeath to it by the government. Other companies suffered due to their comparatively low fares.