Civil Aviation

The Indian aviation sector has come a long way in the last 75 years and with its vast growth opportunities, sky will truly be the limit for the sector in India’s Amrutkaal. By Ajay Sawhney On August 15, 2022, India will complete 75 years of its independence and enter into an Amrutkaal – a 25-year long period leading up to the 100th anniversary of Indian independence. From being completely controlled by the Government of India (GoI) for nearly 40 years after independence to being liberalised in the 1990s to the subsequent introduction of public private partnership (PPP) model for the development of airports, the Indian aviation sector has undergone several structural reforms in the last 75 years.With the introduction of low cost carriers and the regional connectivity scheme of the GoI, the Indian aviation sector, which was once accessible only to a limited few, has been democratised in the last few decades and is now available to the majority of masses. The increasing demand for air travel has also translated into the number of airports growing at an extraordinary pace and this momentum is expected to get further accelerated as the GoI plans to increase the number of operational airports from 131 in 2022 to 200 by 2025. The ascending growth of the Indian aviation sector has led to India boasting one of the largest aircraft order books in the world with pending deliveries of over 1,000 aircrafts. The high purchasing cost of an aircraft makes leasing an efficient tool for the airline operators to manage their operational costs;however, owing to the lack of a home-grown aircraft leasing industry, the Indian airline operators have had to depend entirely on foreign lessors to acquire aircrafts. In a bid to create an Atmanirbhar aircraft leasing industry, the GoI, in October 2020, permitted entities operating in the IFSC to undertake aircraft leasing and financing activities. This was followed by the issuance of a Framework for Aircraft Operating Lease by the IFSCA and the announcement of several tax exemptions for aircraft leasing and financing entities in the Union Budget 2021-22. These initiatives are indicative of the GoI’s continued commitment to support the aviation sector and its resolve to make India a global hub for aircraft leasing and financing activities. With passenger traffic expected to surpass pre-pandemic levels by the end of this year, the recovery of the Indian aviation sector is a testament to its remarkable resilience and robustness. The ‘new normal’ ushered by the pandemic impelled the airport operators to revamp their modus operandi and give serious consideration to technologies that had earlier been overlooked to re-build the trust of the passengers. This translated into automation being integrated in operations via biometrics and facial recognition technology to create a touchless airport experience. The Ministry of Civil Aviation (MoCA) also introduced ‘DigiYatra’ for digital processing of passengers at the airports and eGCA (an e-governance platform) to automate the functioning of Directorate General of Civil Aviation. This digital flight of India’s aviation sector is expected to get further accelerated with the integration of 5G technology in the aviation ecosystem which will not only enhance the passenger experience but also augment the efficiency of airport operations. To realise India’s commitments under the Paris Climate Agreement, the GoI should now consider giving a policy push for the uptake of sustainable aviation fuel (SAF) in aircraft operations. The SAF industry is expected to become a multi-billion dollar industry by 2028 and, with the abundant availability of SAF feedstock, India is well placed to dominate the SAF supply chain. The Indian aviation sector has achieved several key milestones in the last 75 years and has grown exponentially to become the third largest domestic passenger market in the world. The efficiency displayed by the Ministry of Civil Aviation (MoCA) in the strategic transfer of Air India to a private player has set a benchmark, and the privatisation of airports at Delhi, Mumbai, Hyderabad and Bengaluru have set an example for the most successful PPP models for airports across the globe. The policy initiatives introduced in recent years, such as Nabh Nirman (the airport capacity augmentation scheme) and PM Gati Shakti (the multi-modal infrastructure connectivity scheme) have set the foundation for making Amrutkaal a defining period for the Indian aviation sector. With the combination of carefully crafted policies by the GoI and the synergies created through PPP, the Indian aviation sector will be a key driver of the Indian economy and a frontrunner to become a global hub for all aviation activities. (This piece was authored by Ajay Sawhney, Partner, and Mayank Udhwani, Associate, Cyril Amarchand Mangaldas.)

New Delhi, 22nd July 2022: Some 200 new 737 BMAX aircraft will soon join the Vietjet fleet of planes after the airline carrier reaffirmed its commitment with Boeing during the 2022 Franborough International AirShow recently, one of the world’s biggest aerospace events. Both companies have reached an agreement on the 200 aircraft order and will soon execute a flexible aircraft delivery schedule in a bid to support and meet Vietjet’s growth plans.With more new routes launched by Vietjet this year alone to keep up with the growing demand of air travel as it continues to recover and pick up speed, this aircraft order is indeed a timely one. As a start, the first 50 aircrafts will be delivered to Thai Vietjet – the affiliate company of Vietjet in Thailand. Thai Vietjet is currently one of the leading domestic airlines in Thailand and is one that is favoured among the Thai people. In the order agreement that was signed between the two companies, Boeing will also be providing and supporting Vietjet with maintenance, technical support, training to ensure lasting and sustainable growth with the highest levels of efficiency, reliability and affordability. “This agreement is a milestone in the long-standing and trusting relationship between Vietjet and Boeing, as well as the Vietnam – U.S trade economy. Taking into account the recent aviation infrastructure contraints in Vietnam, the first 50 aircrafts will be delivered to Thai Vietjet and it will be embedded with Vietjet’s signature livery. These Boeing aircrafts will soon take off into the Thai skies with investment from international finance resources,” said Dinh Viet Phuong, managing director of Vietjet. This aircraft deal has been a long-standing one, with the first order for 100 B737 Max aircrafts announced back in 2016, and then increased to 200 aircrafts in 2019, marking a record-breaking deal for Boeing. However, due to the challenges and impacts of the unprecedented Covid-19 pandemic, Boeing’s global supply chain was affected and this resulted in an interruption of the aircraft delivery. Despite all the challenges faced by both Boeing and Vietjet, both companies weathered the storm and were able to show excellent operation and finance capabilities that will only continue to grow in the future. The fact that Vietjet and Boeing still followed through with this agreement now is a testament of its remarkable and trusting relationship between the two companies. “We are honored to continue our partnership with Vietjet to drive affordable passenger service in one of the world’s fastest-growing aviation regions. The B737 Max, with its efficiency, flexibility, and capability, will support Vietjet’s goal to grow its route network in Asia and beyond,” said John Bruns, vice president of India & Southeast Asia Sales and Marketing, Boeing Commercial Airplanes. In addition, this huge order is also expected to attract investment into Vietnam’s aviation industry and could see hundreds of thousands of jobs created for the country, including new openings in airports, air traffic control, technical services, training centres, research centres and so on. The airlines has recently announced new regional hubs at Ahmedabad, Bengaluru, and Hyderabad, adding 11 new direct flights to key Vietnamese cities, and totaling its India-Vietnam flight network to 17 routes from September onwards.

The UAE’s national airline leading the world in sustainable aviation, ahead of COP 28 next year Abu Dhabi, United Arab Emirates – Etihad Airways, the national airline of the UAE, has been named ‘Environmental Airline of the Year 2022’ in the annual Airline Ratings awards. The ranking recognises Etihad’s industry-leading strategy to improve aviation sustainability for both the airline itself and the entire industry. The UN Framework Convention on Climate Change chose the UAE as host for COP 28 which will take place in 2023. Etihad’s achievement is fully aligned with Abu Dhabi and the UAE’s own commitment to work with the international community to accelerate global efforts to address climate change and environmental protection and create a more sustainable economic future. The airline recently published the Etihad Airways Sustainability Report which Airline Ratings deemed as a benchmark for the industry, demonstrating the potential advancements to be made in sustainable aviation by a wide range of initiatives. Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group, said: “Our ambition to become a leader in aviation sustainability has taken us on a journey to reduce the impact of aviation on the environment, not just for Etihad, but for the entire industry. “We continue to explore and test all possible ways to decarbonise – from research into sustainable aviation fuels and contrail avoidance to offsets and reforestation through the Etihad Mangroves. The Sustainability Report we published earlier this year is a culmination of our efforts demonstrating the work we have done and what we have learned so far and I would encourage everyone to read it.” Etihad’s sustainability initiatives began with a focus on creating operational efficiencies. The airline quickly went on to unite industry leaders and build the most comprehensive, cross organisational aviation sustainability initiative ever undertaken. This umbrella programme, now in its third year, includes partnerships with Boeing, GE, Airbus and Rolls Royce, as well as a wide range of collaborations with pioneering new-technology organisations, academic researchers, smaller businesses and start-ups. Etihad’s flagship sustainability programmes include the Greenliner programme using the airline’s fleet of Boeing 787 Dreamliners as flying test-beds, as well as the Sustainable50 A350-1000 launched earlier this year. Mr Douglas continues: “We are grateful to our partners from the major manufacturers to academics and small start-ups who have partnered with us on this mission, in particular through the Greenliner and Sustainable50 programmes. And we’re appreciative of our guests and corporate clients who have signed up to our green loyalty programme Conscious Choices or played their part by bringing a little less luggage or choosing to offset their flights. “This accolade is testament to our efforts over the past few years to be the greenest airline in the sky and we’re proud to be awarded the Environmental Airline of the Year 2022. We are tremendously proud of this achievement but will not rest on our laurels as we have ambitious, industry-changing and climate critical action to continue to build on.” Airlineratings.com Editor-in-Chief Geoffrey Thomas said “Etihad Airways has shown its clear leadership in the push for sustainable flight with its Greenliner Boeing 787 programme and this year with its Sustainability50, A350 aircraft. “At every touchpoint, Etihad Airways staff and management are committed to reducing the airline’s CO2 footprint and it shows. The mantra at Etihad Airways is a million things count in reducing emissions and thus the focus is all-consuming.” Mr Thomas added that “the airline’s Sustainability Report 2020-2021 demonstrates the potential advancements to be made in sustainable aviation by a wide range of initiatives, coordinated to achieve a 20% reduction in emissions intensity in its passenger fleet by 2025, cut 2019 net emissions by 50% by 2035, and reach net-zero emissions by 2050.” Over the past three years, the airline has conducted a vast number of research eco-flights demonstrating potential carbon emission savings of up to 72% on a single flight. Etihad has also tested and implemented world-first operational efficiencies and technology solutions including Jeppesen Flite Deck Advisor, SATAVIA contrail avoidance, GE Engine Foam Wash, eTech logs and lightweight Unit Load Devices In addition to the airline’s comprehensive testing and innovation programme, Etihad became the first airline to secure commercial finance based on verified compliance with the Sustainable Development Goals of the United Nations (UN SDGs). The Etihad Mangroves Forest project was launched with plans to establish carbon-absorbing forests in countries where the airline operates. In an initiative to involve its guests and corporate clients, Etihad offers the Conscious Choices programme with rewards for customers who take environmentally positive action such as offsetting their flights. Corporate clients can benefit from accredited solutions to reduce their Scope 3 emissions. ( Report based on Etihad Media Release)

New Delhi, 10th June 2022: The Ministry of Civil Aviation, Government of India in collaboration with Government of Bihar and Federation of Indian Chambers of Commerce and Industry organised a Conference for promotion Civil Aviation Sector in the state of Bihar. The conference brought together experts from Indian Aviation Sector for strengthening the state’s opportunities in Airports infrastructure, Heli services, agro-business, and tourist destinations, increase regional connectivity, attract investment, and identify business. The conference was moderated by Smt. Usha Padhee, Joint Secretary, Ministry of Civil Aviation. Presentations on the promotion of Civil Aviation in the state of Bihar was done by Dr S Sidharth, Principal Secretary to Chief Minister of Bihar and Shri Sandeep Pondrik, Principal Secretary, Government of Bihar. Shri Prashant Ranjan, Director, Ministry of Tourism, Shri Manoj Mehta, Director, FICCI, Palka Sahni, Resident Commissioner, Government of Bihar and Shri Ajay Yadav, Private Secretary to Minister of Civil Aviation were also present in the meeting. A presentation on Industry perspective was done by Capt. Dhruv Rebbapragada, Regional Director, Safety, and member management board of Airbus India & South Asia. Civil Aviation is a key infrastructure sector that facilitates the growth of the business, and seamless flow of investment, trade, and tourism, with significant multiplier effects across the economy. Over a third of world trade by value is delivered by air and about half of international tourism is facilitated by air links. Bihar is one of the progressive states in India and it has immense growth potential. In recent years states civil aviation sector has seen exponential growth in terms of air passengers, Airport Infrastructure etc and holds the key to link the state to the other states of the country while it also taking ahead state’s Tourism, trade, and commerce with the rest of the world. The state has benefited immensely through regular commercial operation of air services from Darbhanga airport since 2020. Darbhanga airport has direct flight connectivity with Delhi, Mumbai, Kolkata, Hyderabad, and Bangalore while Patna is now connected to Amritsar, Varanasi and Prayagraj under UDAN-2.0 scheme.

New Delhi, May 30, 2022: Vietjet Aviation Joint Stock Company on May 28, 2022, held the 2022 Annual General Shareholders’ Meeting to review its resilient business performance against the pandemic, the last five-year term of the Board of Directors, and to vote on the 2021 audited financial statements and the development plan for 2022.The global aviation industry has faced the most unprecedented and challenging time in its long history. Vietjet, though, has emerged from the pandemic with its pioneering spirit, patience, and robust inner strength. Vietjet was reported to gain a consolidated revenue of VND12,875 billion (approx. US$555 million) in 2021 with the after-tax profit of VND80 billion (approx. US$3.4 million). As of December 31, 2021, Vietjet’s assets totaled nearly VND51,654 billion (approx. US$2.22 billion). Its debt-to-equity ratio stayed at 0.9 while the liquidity ratio was at 1.6 – all were considered good indicators in the aviation industry. In 2021, Vietjet has bounced back and expanded its flight network, offering everyone more opportunities to fly and joined hands with localities contributing to the country’s economic recovery. The airline last year operated 40,000 flights, transporting more than 5.4 million passengers across over 50 domestic and international routes. It has also airlifted more than 63,000 tons of cargo, reporting a revenue growth of 200% YOY. The airline has operated several flights to airlift doctors, police officers and soldiers to pandemic-stricken localities; delivered millions of Covid-19 vaccine doses and joined hands of strategic partners in Sovico Group to grant medical utilities including ambulances, breathing machines, testing kits, and hospital beds to many localities. By the end of 2021, Vietjet has a fleet of 76 aircraft flying to 44 domestic and 95 international destinations. To prepare for the post-pandemic recovery, Vietjet has signed a strategic partnership agreement with Airbus on the deliveries of aircraft orders and cooperation to develop the airline’s wide-body fleet in addition to further support post-pandemic. Vietjet has invested in a wide-body fleet of Airbus A330-300 following the low-cost model, beginning a new era of longer-range flight routes. Both sides recently have also reached an agreement to continue their order contract with long-term cooperation programs aiming to make Vietnam a regional and global aviation center. Shareholders at the meeting have passed a resolution on business plan for 2022, in which Vietjet eyes to expand its fleet to 82 aircraft, operating 100,000 flights and transporting 18 million passengers. The shareholders have also voted to pass a resolution to pay a 20% stock dividend from accumulated undistributed profits from the years before the pandemic. The airline this year plans to earn more than VND22,300 billion (approx. US$959 million) in air transport revenue and make a profit. Vietjet, since its first flight in 2011, has pioneered in using e-tickets to replace paper ones and the implementation of e-commerce. In 2022, the airline is set to keep broadening its application of advanced technology, automation and innovation; bolstering the digital business sector in air transport, cargo and logistics; and growing and expanding air services including ground handling, training, financing, project investment and other services. Vietjet has rolled out the SFC02 including solutions to optimize the fuel consumption in aircraft operation, reducing environmental pollution. In the coming time, the airline will continue the program to monitor and manage the fuel consumption and CO2 emission of civil aircraft, aiming towards emission reduction and climate change prevention. Recognizing 2021 was a challenging year for the aviation industry, Vietnam Deputy Minister of Transport Le Anh Tuan, representing Vietnam government, however hailed that Vietjet had resiliently overcome it and demonstrated its efforts and business success. Le said that Vietjet has actively resumed its domestic and international routes after the pandemic was put under control, even opening new routes to Japan, South Korea and India. He hoped that Vietjet’s newly added wide-body Airbus A330 fleet preparing to fly to Australia and Europe would bring more success to the airline. Civil Aviation Authority of Vietnam Deputy Director Dinh Viet Son acknowledged Vietjet’s contributions to the country’s aviation safety and service quality. He highly regarded Vietjet as a model for flexibility and adaptability to hold firm throughout the pandemic while seeking new opportunities to develop air transport. “Following the scheme of ‘Flying in the digital era’, Vietjet has found the right way that is in line with the government’s (digital) orientation especially in the aviation sector, which demands highest safety and cutting-edge technology, and is also the current trend of the world,” said Dinh Viet Son. Vietjet’s executive board have recognized the orientation of Transport Ministry leaders and contributing ideas from the shareholders. The meeting also approved the profit distribution plan in 2021 and the dividend payment plan in 2022; bond issuance plan; plan to increase charter capital; and elected members of the Board of Directors for 2022 – 2027 term with independent members who are experienced experts in the fields of insurance and aviation.

*The consultation, also involving other government departments and private players, was to identify the pain points, narrow down key focus points of the proposed policy, and finalise proposed incentives. *The consultation was very productive with all stakeholders coming up with excellent inputs and suggestions for the proposed policy. Gandhinagar: The Gujarat State Aviation Infrastructure Company Limited (GUJSAIL), the nodal agency for the development of aviation and related infrastructure in Gujarat, held a stakeholder consultation as a part of the preparation of the Gujarat Aviation Policy. Stakeholder consultation is an important part of any policy preparation to identify and address the pain points faced by stakeholders, narrow down the key focus points of the proposed policy, discuss financial implications, and finalise proposed incentives. GUJSAIL has identified seven themes as a part of the proposed aviation policy, which include enhancing airport and allied infrastructure, air cargo, supporting maintenance, repair and operations (MRO) and industrial ecosystem, developing aero sports, improving regional connectivity, boosting R&D, training, &startups, and aircraft financing and leasing. “The Gujarat government is committed to the growth of the aviation sector and coming out with the best policy that can play the role of a catalyst in the further growth of aviation. We discussed if any specific focus areas or incentives or reforms are needed to be included in the policy to attract more participation from private players, generate employment, and bring more investment to the state. The consultation was very productive with all stakeholders coming up with excellent inputs and suggestions. There is a lot more clarity about what the stakeholders expect from the proposed policy, and will have more such consultations if the need arises,” said Captain Ajay Chauhan, CEO, GUJSAIL, and Director, Civil Aviation Department. GUJSAIL, which won the award for the “Best State with a Dedicated Outlook for the (Aviation) Sector” at the recent WINGS India 2022, Asia’s largest event on civil aviation, has launched or announced several initiatives in recent times. To bring smaller cities on the air map, the state has introduced a regional air connectivity scheme, under which four routes are already operational and another route is planned to be operationalised in the coming weeks. GUJSAIL has launched a pilot project of Helicopter Joyride at Sabarmati Riverfront in Ahmedabad to boost both aviation and tourism sectors and has also launched the first state-specific air ambulance service for medical emergencies. “The growth of aviation is directly linked with tourism, which also has a multiplier effect on the economy. GUJSAIL is committed to the growth of aviation infrastructure in the state. Three state-owned airstrips are being developed at Mehsana, Amreli, and Mandvi. Similarly, new airstrips are being developed at Ankleshwar, Morbi, Rajpipla, and Dwarka, besides water aerodromes at Sabarmati Riverfront and Statue of Unity,” said Captain Chauhan. The stakeholder consultation was attended by senior officials from the Department of Science & Technology, Tourism Corporation of Gujarat Limited, and Gujarat Infrastructure Development Board, along with various private players connected with the aviation industry, and moderated by Deloitte.