Thursday, February 9, 2012

Investment News and Commentary from Emerging Markets in Asia - China, India and ASEAN





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2point6billion.com discusses investment news and events from the emerging markets of Asia - including India, China and the ASEAN countries. It is produced by the Asian foreign direct business advisors at Dezan Shira & Associates from their offices across emerging Asia.




Infrastructure & Safety – a concern for India and China’s booming aviation industry

India’s aviation is one of the fastest growing aviation industries in the world. The challenge today for India is to cope up with the growing international and domestic demand. India’s domestic aviation market alone is forecasted to grow at about 20 per cent a year over the next five years.From just four airlines three years back, India today has more than 10 domestic carriers.

The print & the electronic media has always been flooded with the stories like the following:

Boeing has firm orders for more than 140 aircraft from various Indian airlines, including Jet Airways, Air India and Spice Jet.
• Indian carrier IndiGo orders 100 Airbus A320 aircraft
• Air India considering purchase of A380 super jumbos
• Boeing expects various airlines in India to buy 911 new aircrafts in the next 20 years

Indian airline operators are increasingly connecting India to the world by expanding their regional and global presence. It is estimated that the Indian air travel market will grow at an average 12 per cent per year over the next 20 years, compared to the worldwide average of 4.7 per cent.

China’s Beijing Times in October 2003 had published a news story that China was expected to require nearly 2,400 new airplanes over the next 20 years.

Then it was estimated that the predicted growth of China’s Aviation Industry will account for 38 percent of the Asia-Pacific airplane requirements in these 20 years.

In China like India, the media from the beginning of the century has also published stories like:

Chinese Carriers Finalize Orders for 15 Next-Generation 737s
• China orders 60 Boeing Dream Liners
• Boeing receives Chinese order for 150 jets
• Air China orders six Airbus A319s
• China gives Airbus order for 150 jets

China’s passenger and cargo traffic in most recent years has continued to grow at an increasing rate and this year first half has seen a growth of 19.5% faster than the target set by its aviation authorities.

Infrastructure & Safety needs:

The civil aviation traffic in both India & China has been growing by leaps and bounds. For their economic growth, this is a boon to these countries but at the same time it raises new challenges in their air transport safety. Aviation industry in both these countries is expanding too quickly causing congestion in their skies and threatening safety. It is an urgent need that both India & China to improve their infrastructure and enhance air safety standards to be able to tap the full potential of the growth. It is true that the present resources and facilities will not be able to support such a fast growth.

The authorities of both the countries need to urgently examine & remove bottlenecks in the present systems and procedures in areas like general infrastructure, environmental conditions, aircrafts maintenance facilities and flight operations and air traffic controllers training. There is need for periodic assessment of these aspects and update standards, systems, rules, procedures and certification of these by the competent authorities.

Similarly there is an urgent need to raise cabin crews, training standards and establish higher training levels for pilots to ensure safety standards. The flying hours also need to be as per standards laid down to ensure adequate maintenance and air worthy checks.

Will these countries be making these concerns a part of their agenda and allocating additional funds for them is to be seen.

What do you think …. write to me about it.

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