A way out of the aviation turbulence
30 March 2012
If the government had not taken over Air India from the Tatas, maybe the airline would have been one of the best in the world now and New Delhi or Mumbai would have been the world's fastest growing aviation hub. Maybe, it is still not outrageously naive to hope for two or three healthy and friendly airline companies in our skies, if the government can muster up some resolve. By Shivshanker Verma
For any reasonably established entrepreneur or business group with access to capital and preferably some past experience in a services business, there is a sector that holds amazing promise. It is an essential service that will only grow with our economy. While the business itself is hardly new, market penetration is very low.
Even after volumes expanded six times over the last decade, market penetration in this sector is the lowest in India among the big emerging countries. India is now the fastest growing market in this sector globally, and is still expected to expand at an average of 10 per cent annually over the next decade.
By the end of this decade, India will be one of the top three markets in this sector globally in terms of business volume, if not total revenues.
Entry barriers are not too steep. New equipment is somewhat difficult to buy as the major equipment suppliers have a huge backlog of orders. But you can lease equipment with relative ease, even the latest models.
If you do not have prior experience in the business, two of the largest equipment suppliers have programmes that will guide you step by step. If that is not enough, there are enough consultancies around.
Staffing is not a problem as there are enough experienced professionals. In terms of regulatory requirements, the Indian government insists on minimum capital, but that is not too prohibitive.