Taking flight: Aviation sector to offer new job opportunities

Once a recession struck sector, the Aviation industry is on a roll currently, with enormous job opportunities on the cards…

The Demand Scenario

India is one the fastest growing aviation markets and currently the ninth largest civil aviation market in the world, according to the India’s Civil Aviation statistics. The industry reported an average increase of 4 per cent in demand during the beginning of 2014, according to the TimesJobs.com data. It clocked an average growth of 1 per cent during the Jan-Mar ‘14 quarter.

Performing Regions 

Metros, including Delhi NCR, Mumbai and Bangalore accounted for over 50 per cent of the jobs in the Aviation sector, during Mar-Apr ’14, revealed the TimesJobs.com data. Chennai, Pune and Hyderabad emerged as other key job hubs offering immense job opportunities in the sector.

Flourishing Functions 

Engineers are most sought after in the sector, for obvious reasons. According to TimesJobs.com data, over 25 per cent of the total demand is for engineers. Sales, accounting & finance and administrative profiles are also in demand. IT/Telecom professionals account for 7 per cent of the total demand across functions in the sector.

With new developments on the cards, career opportunities have increased manifold in the sector. New airports require designers, construction engineers, managers, technicians for ramp handling. Candidates with training in passenger handling, airport management and airport security are also in demand.

Shrutidhar Paliwal, vice president and head, Corporate Communications and Media Relations, Aptech Ltd said, “New emerging/developing airport and airlines, government funding and initiatives to revamp small airports, foreign airlines penetrating Indian markets, joint ventures such as Tata Sons and Air Asia has brought about a whole range of career opportunities in this field.”

He highlighted that retail has an become integral part of new developing airports. Currently, there is huge demand for ground staff, cabin crew and candidates who can work in the retail outlets present at the airport.

Road ahead

The potential of the Indian aviation industry is enormous. According to a report by the India Brand Equity Foundation, the sector is projected to be the third largest aviation market globally by 2020. The market already has about 150 million travelers passing through its airports, with capacity set to grow further.

By 2020, traffic at Indian airports is projected to touch 450 million, according to the report. Furthermore, India’s aviation industry supports about 0.5 per cent of the Indian GDP and close to 1.7 million high productivity jobs. According to industry experts, the annual value added by an employee in air transport services in the country is nearly ten times greater than the Indian average.

With new development in the offing, opportunities for young aspirants in the Aviation industry will only increase. Increase in jobs is also expected to intensify the competition. Paliwal suggests that besides strong academic background a candidate must work on brushing up his/her communication and behavioral skills. He added that strong communication, pleasing personality and composed demeanor are a prerequisite for this field.

5 reasons for hope

Why the beleaguered Indian aviation industry may get a breather from 2014

These are strange times for aviation in India. In February 2013, salt-to-software conglomerate Tata Group tied up with Malaysian budget airline AirAsia. A few months later, the Foreign Investment Promotion Board swiftly cleared the group's partnership venture with Singapore International Airlines (SIA) to start a full-service airline in India by mid-2014. But these events stood out against a gloomy backdrop. The clearance for the SIA deal came just two days after the country's second largest private airline, Jet Airways, announced its biggest ever quarter loss (Rs 891 crore) for the second quarter of 2013/14. Consultancy Centre for Asia Pacific Aviation (CAPA) estimates that Indian airlines collectively lost more than Rs 3,000 crore in that quarter.

Between 2007 and 2013, they lost Rs 53,648 crore, and losses for 2012/13 are pegged at Rs 10,429 crore. But Kapil Kaul, CEO of aviation consultancy CAPA (India and the Middle East), says the tide will turn in 12 to 18 months. "Post 2014/15, the industry will see a better operating environment and will return to sustainable growth," he says.

That may seem hard to believe when the industry is grappling with high aviation turbine fuel (ATF) prices - oil prices have hovered around their peak of $110 a barrel - as also slack demand and rupee depreciation. The last is especially painful for a business in which 75 per cent of costs are dollar-denominated. All these issues have led to softening of yields per seat, an important measure of an airline's health. For Jet, yields for the second quarter dropped 11 per cent to Rs 7,376 from Rs 8,335 in the corresponding quarter of the previous year.

India’s New Budget Frustrates Airlines

Indian Minister of Finance Arun Jaitley disappointed the country's aviation industry by failing to address its multiple concerns in his new budget.

With India’s airlines still mired in losses, the country’s new budget, announced on July 11, did little to address some of the aviation industry’s most pressing concerns. It offered nothing on reforms in taxation on aviation fuel and maintenance, repair and overhaul—long issues of contention the aviation industry hoped India’s new government would address. In fact, the finance minister’s budget speech did not once allude to aviation, raising concern that the new government will be as ineffectual in removing obstacles to industry growth as its predecessor.

The entry of domestic startups—AirAsia India and soon-to-be-launched Tata SIA—appears likely to exacerbate the situation as they released more seats in a market where supply already exceeds demand. The only good news in the budget seemed to be acknowledgement that with “air connectivity out of reach for a large number of aspirational Indians,” a plan for development of new airports in Tier 1 and Tier 2 cities should proceed through the Airports Authority of India or private-public partnerships.

Before the budget release, industry officials expressed high hopes for the aviation sector. “India’s new government will provide opportunity for the aviation industry,”IATA CEO and director general Tony Tyler had told AIN in anticipation of the budget. “Problems in India are onerous as taxes and regulation are holding back [the sector]…The new team India approach will provide an opportunity to drive the agenda for aviation that will make life better for all players,” Tyler had said.

Aviation fuel taxes of up to 35 percent and a depreciated rupee have made operating costs prohibitive for struggling carriers. “With no tax reduction, no kick up in volumes will take place for airlines as they cannot cut fares any lower or improve profitability,” an Indian airline official told AIN.

High taxes on MROs have driven domestic airlines to international shops. “India will continue to lose foreign exchange it could have earned by providing MRO services for neighboring countries,” said an MRO provider.

Regional carriers with smaller fleets such as Air Costa appear likely to benefit from a focus on regional low-cost airports and a boost to tourism circuits in the budget. Recently, two new regional airlines, Air Carnival in southern India and Kolkata-based Zav Airways, won No Objection Certificates and now await their licenses to fly.

Despite the budget’s failure to directly address aviation’s concerns, optimism still prevails in certain quarters. “The budget is an interactive process. There is no reason to be disappointed,” Air India chairman and managing director Rohit Nandan told AIN. Of course, Nandan has cause to celebrate. The latest tranche of an equity infusion in Air India, which finally joined the Star Alliance on July 11, totals  $1.2 billion in the current fiscal year through March 31, 2015.

Considering tourism market, aviation industry in India is small: Tony Fernandes

Group Chief Executive officer Tony Fernandes today said considering the population and potential tourism market India has, the aviation industry in the country is very small.

"For the size of the population and for the size of the potential tourist market, the aviation industry is very small. There is huge scope for fourth airline, I would tell my competitors this is not about one airline or two airline or three airline- that all of us should work together in making it more affordable for Indians to fly, to help lot of Indians to fly overseas for business and also to bring people to this wonderful country," Fernandes told reporters here.

Speaking at the press conference to celebrate the launch of AirAsia India that was attended by Ratan Tata and S Ramadorai (he said "for the size of Indian population it is very small."

While Tata is the Chief Advisor to Airasia India, Ramadorai is the Chairman of the Board of the airline.

Thanking the Centre for its help in launching Air Asia India, he said "obviously we want to reduce cost as much as possible and transfer that to growth....; we hope that the government of India, and the state governments in the country will look at ATF, will look at developing low cost infrastructure going forward."

Breaking into Indian domestic aviation space, AirAsia India on June 12 had launched its operation with a flight from here to Goa in a foray that is expected to intensify the fare war among the no-frill airlines in the loss-hit sector.

The country's fourth budget carrier has also announced the addition of Kochi to its existing network from July 20.

Over Rs 5,840 loss for Indian airline industry in 2012-13:Govt

Losses to Air India as well as the private carriers have shown a declining trend since 2009-10 till 2012-13

The Indian airline industry suffered a total operating loss of over Rs 5,840 crore, including over Rs 3,159 crore of Air India, in 2012-13, Rajya Sabha was informed today.

However, the losses to Air India as well as the private carriers have shown a declining trend since 2009-10 till 2012-13.

IndiGo was the only airline to have reported profits during this period, barring 2011-12 when it made a loss of about Rs 88 crore, Minister of State for Civil Aviation G M Siddeshwara said in reply to questions.

Air India's operating loss was Rs 3,373 crore in 2009-10, Rs 4,087 crore in 2010-11, Rs 5,537 crore in 2011-12 and Rs 3,159 crore in 2012-13.

The private carriers -- Jet Airways, Jet-lite, Spice-jet, Go-air, Indigo and now-defunct Kingfisher Airlines -- reported a total loss of Rs 3,733 crore in 2009-10, Rs 2,902 crore in 2010-11, shot up to Rs 7,272 crore in 2011-12 and again slided to Rs 2,682 crore in 2012-13.

Asked whether the entry of new airlines would put additional financial stress on the existing carriers' earnings, he said it was "too early" to asses the impact of new carriers joining the industry.

He said the government had taken corrective measures including allowing external commercial borrowings for working capital for a period of one year, with a total ceiling of USD one billion. It had also allowed investment by foreign airlines in Indian carriers.

While trying to persuade states to reduce value added tax on jet fuel, the Centre was also considering tax concessions for aircraft parts, testing equipment for MRO (maintenance, repair and overhaul) industry, he said.

Can India accommodate more domestic airlines?

 

The old debate on whether India has an appetite for more domestic airlines has again got a lease of life after GM Siddeshwara, the Minister of State for Civil Aviation, told the Lok Sabha that during the last three-four years, six companies applied for scheduled and regional scheduled operator permits.

Of these, four – Air Asia (India), Quickjet Cargo Airlines, Ligare Aviation and LEPL Projects (Air Costa) — have been given air operator permits after they completed the process for starting new airlines.

Air Asia (India) and Air Costa have already started operations.

Technically speaking, getting an air operator’s permit is the second and final step in starting an airline in India. A new start-up airline first has to approach the Ministry of Civil Aviation and seek a no-objection certificate (NOC). At this stage, the Ministry seeks clearances from various Government agencies, including the Home Ministry, which checks the background of individuals that the airline wants to induct on its board. With the Ministry’s NoC, the airline approaches the Directorate General of Civil Aviation for clearances to fly. These clearances are given after the regulator examines all the manuals of the airline and conducts route proving flights, after which the airline can take to the skies. However, just completing all the formalities is a long drawn-up process.

Changing dynamics

For instance, while AirAsia India, a joint venture between India’s Tata Group and Malaysia-based low-cost carrier AirAsia, was able to complete the entire process in about seven months, there have been cases of other airlines taking years to complete the formalities.

Even otherwise, just taking off in the Indian skies is not reason enough to celebrate. Kapil Kaul, CEO of aviation consultancy Center for Asia Pacific Aviation (CAPA), cautions that giving permission to new airlines will mean a lot of capacity being added by the next fiscal.

“Tata-SIA (Tata’s joint venture with Singapore Airlines) and AirAsia India will have increased the size of their operations in FY2015 which means the competitive dynamics will change,” Kapil points out. CAPA feels that without addressing key issues that impact the viability of running airlines, getting additional capacity will further deteriorate industry financials and hurt the entire system.

CAPA may have a point as at the moment the industry is burdened with high taxes.

Add to that the frequent low fare sales which too, are not helping its cause.

The aviation industry in India reported a total operating loss of over ₹5,840 crore, including over ₹3,159 crore of Air India’s losses, in 2012-13, Siddeshwara, recently told the Rajya Sabha.

The other side of the argument is equally forceful. For instance, Amber Dubey, Partner and India Head, Aerospace and Defence, KPMG, says decision to grant licences indicates the new Government’s intention to focus on larger issues. “Industry dynamics are best left to market forces. Some of the new airlines may prove to be trailblazers, others may simply fold up or get acquired by larger players,” Amber points out.

Increasing traffic

Then traffic is going to increase in the years to come which will be able to accommodate more airlines.

A study conducted by the state-owned Airports Authority of India estimates that over the next five years, traffic at all Indian airports will shoot up by 5.3 per cent in terms of passengers carried and 4.3 per cent in terms of aircraft movements.

Further, the gap between the potential and current air travel penetration is huge in India.

The country’s air trips per capita a year ratio is 0.04, which is far behind developed countries such as the US and Australia (more than two air trips per capita) and emerging economies like China and Brazil (0.3 air trips).

The low ratio in India suggests a huge potential for air traffic growth.

JET Airways and Etihad Airways:

JET Airways and Etihad Airways: 

Committed to grow India's aviation industry

                  Jet Airways, India’s premier international airline, and Etihad Airways, the national airline of the United Arab Emirates, have outlined plans to reinforce their long-term commitment to the growth of India’s economy and aviation industry, including a major new turnaround strategy for Jet Airways to return to profitability in three years.

The two airlines have been code share partners since 2008 and their relationship was strengthened in November 2013, after Etihad Airways received approvals to acquire a 24 per cent stake in Jet Airways, marking it the first investment by a foreign carrier in India’s airline industry.

The wide-ranging partnership has numerous advantages for travelers, including enhanced connections across the world through an expanded code share agreement, and reciprocal ‘earn and burn’ rights and tier level recognition on the Jet Privilege and Etihad Guest frequent flyer programs.

Jet Airways and Etihad Airways also stand to benefit from cost savings and synergies in areas such as fleet acquisition, maintenance, product development and training, and continue to explore collaborative purchasing opportunities for fuel, spare parts, insurance and technology support.

                       Focus areas for international operations will include network developments, including new services to markets such as Europe, China, Australia and Southeast Asia, expanded frequencies to existing routes and additional code shares. Jet Airways’ two and three class aircraft product will also be enhanced and the seat count optimized on wide-body Boeing 777 and Airbus A330 aircraft.

In addition, the domestic business model will improve connectivity across India and worldwide, while removing complexity in product and fleet, including the standardization and reconfiguration of the Boeing 737 fleet.

To initiate the three-year turnaround plan, the Jet Airways Board and management team have already worked with auditors to clean up its balance sheet and write down overvalued non-cash assets.

Jet Airways has announced a new team at the helm with Cramer Ball as its new Chief Executive Officer and Subodh Karnik as the Chief Operating Officer pending regulatory approval. Mr Ball 46, an Australian national, is a certified accountant and an accomplished airline executive with extensive experience in the aviation industry. Mr. Karnik brings with him rich experience in the aviation sector leading and assisting airlines in fleet and network planning, global alliances, joint ventures and improving overall efficiencies at international airlines.

The two airlines will commence a new marketing campaign tomorrow, with the tag line ‘Flying India Forward’, which highlights their collaborative offering for Indian travellers. Together, Jet Airways and Etihad Airways operate more international flights from India than any other airline, and provide unrestricted opportunities to earn and redeem miles on their integrated frequent flyer programs. The campaign will feature in newspapers, magazines, radio, online, and also airport displays in India.