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Knowledge Banking Partner
Indian Civil Aviation:Industry Perspective
TITLE Indian Civil Aviation: Industry Perspective
AUTHORS
YEAR
COPYRIGHT
DISCLAIMER
CONTACT ADDRESS
Infrastructure Banking Group, YES BANK
September, 2012
No part of this publication may be reproduced in any form by photo,
photoprint, microfilm or any other means without the written permission of
YES BANK Ltd. and ASSOCHAM.
The information and opinions contained in this document have been compiled
or arrived at from sources believed to be reliable, but no representation or
warranty expressed is made to their accuracy, completeness or correctness.
This document is for information purpose only. The information contained in
this document is published for the assistance of the recipient but is not to be
relied upon as authoritative or taken in substitution for the exercise of
judgment by any recipient. This document is not intended to be a substitute
for professional, technical or legal advice. All opinions expressed in this
document are subject to change without notice.
Neither YES BANK Ltd. nor ASSOCHAM or any other legal entities in the group
to which it belongs, accept any liability whatsoever for any direct or
consequential loss howsoever arising from any use of this document or its
contents or otherwise arising in connection herewith.
YES BANK Ltd.
Registered and Head Office
9th Floor, Nehru Centre,
Dr. Annie Besant Road,
Worli, Mumbai - 400 018, INDIA
Tel : +91 22 6669 9000
Fax : +91 22 2497 4088
Northern Regional Office
48, Nyaya Marg, Chanakyapuri
New Delhi – 110 021
Tel : +91 11 6656 9000
Fax No. : +91 11 4168 0144
E-Mail : [email protected]
The Associated Chambers of Commerce and Industry of India
ASSOCHAM Corporate Office,
1, Community Centre Zamrudpur,
Kailash Colony,
New Delhi – 110 048
Tel : +91 11 4655 0555
Fax : +91 11 4653 6481/82
Email : [email protected]
With increased globalization and ease of long-distance travel, airports of today have become the gateways of
economic growth. India's strategic geographic location along with favourable demographics, strong economic
growth potential and low penetration levels in the aviation sector provides immense growth opportunities.
Over last decade, the country has witnessed an almost 500% increase in passenger traffic, domestic and
international combined, to 162 million passengers in FY12. In the next five years this is further expected to grow to
270 million passengers. With most of the key metro airports already achieving high capacity utilization and airlines
running with Passenger Load Factors in excess of 80%, there is a tremendous opportunity for capacity
augmentation both at airports and airlines. However, it will take well articulated steps coupled with sound strategy
execution to meaningfully achieve the same.
thThe vision for the Indian civil aviation industry under the 12 Five Year Plan is:
“To propel India among the top five civil aviation markets in the world by providing access to safe, secure and
affordable air services to everyone through an appropriate regulatory framework and by developing world class
infrastructure facilities.”
In order to facilitate this vision and achieve this significant growth, India would need active participation of the
private sector, lower financing costs and adequate training facilities to nurture next-generation aviation personnel.
This will be possible if a robust regulatory framework is put in place which provides an investment friendly
environment. In the recent past, the government has taken various steps like allowing direct aviation turbine fuel
imports, removing freeze on international permissions to private carriers and the proposed easing of foreign direct
investment norms in the sector, to allow foreign carriers to invest 49% equity in domestic airlines. The
government's initiative to promote Public-Private-Partnership (PPP) in the airport sector is already witnessing the
creation of world class airport infrastructure, amply equipped to handle even the largest commercial aircraft. In the
current economic scenario, the government has to continuously support the sector and ensure its long term
growth.
I am certain that all these measures will provide a world class airport infrastructure which will be in line with the
aforementioned vision. The aviation industry will open new avenues for private participation, creating several
opportunities for players to successfully participate in this development. The anticipated investment for airport th
development during the 12 Five Year Plan is over INR 675 billion of which INR 500 billion is likely to be contributed
by the private sector.
YES BANK recognizes the enormous growth potential and needs of the growing aviation sector and in its capacity
as a knowledge driven Indian Bank, is committed to spearhead initiatives which can promote the development of
the sector in the long run.
We hope that this white paper will facilitate a better understanding of the sector and will be instrumental in
designing policy interventions to invigorate the aviation sector.
Dr. Rana Kapoor
Founder, Managing Director & CEO
Foreword
TITLE Indian Civil Aviation: Industry Perspective
AUTHORS
YEAR
COPYRIGHT
DISCLAIMER
CONTACT ADDRESS
Infrastructure Banking Group, YES BANK
September, 2012
No part of this publication may be reproduced in any form by photo,
photoprint, microfilm or any other means without the written permission of
YES BANK Ltd. and ASSOCHAM.
The information and opinions contained in this document have been compiled
or arrived at from sources believed to be reliable, but no representation or
warranty expressed is made to their accuracy, completeness or correctness.
This document is for information purpose only. The information contained in
this document is published for the assistance of the recipient but is not to be
relied upon as authoritative or taken in substitution for the exercise of
judgment by any recipient. This document is not intended to be a substitute
for professional, technical or legal advice. All opinions expressed in this
document are subject to change without notice.
Neither YES BANK Ltd. nor ASSOCHAM or any other legal entities in the group
to which it belongs, accept any liability whatsoever for any direct or
consequential loss howsoever arising from any use of this document or its
contents or otherwise arising in connection herewith.
YES BANK Ltd.
Registered and Head Office
9th Floor, Nehru Centre,
Dr. Annie Besant Road,
Worli, Mumbai - 400 018, INDIA
Tel : +91 22 6669 9000
Fax : +91 22 2497 4088
Northern Regional Office
48, Nyaya Marg, Chanakyapuri
New Delhi – 110 021
Tel : +91 11 6656 9000
Fax No. : +91 11 4168 0144
E-Mail : [email protected]
The Associated Chambers of Commerce and Industry of India
ASSOCHAM Corporate Office,
1, Community Centre Zamrudpur,
Kailash Colony,
New Delhi – 110 048
Tel : +91 11 4655 0555
Fax : +91 11 4653 6481/82
Email : [email protected]
With increased globalization and ease of long-distance travel, airports of today have become the gateways of
economic growth. India's strategic geographic location along with favourable demographics, strong economic
growth potential and low penetration levels in the aviation sector provides immense growth opportunities.
Over last decade, the country has witnessed an almost 500% increase in passenger traffic, domestic and
international combined, to 162 million passengers in FY12. In the next five years this is further expected to grow to
270 million passengers. With most of the key metro airports already achieving high capacity utilization and airlines
running with Passenger Load Factors in excess of 80%, there is a tremendous opportunity for capacity
augmentation both at airports and airlines. However, it will take well articulated steps coupled with sound strategy
execution to meaningfully achieve the same.
thThe vision for the Indian civil aviation industry under the 12 Five Year Plan is:
“To propel India among the top five civil aviation markets in the world by providing access to safe, secure and
affordable air services to everyone through an appropriate regulatory framework and by developing world class
infrastructure facilities.”
In order to facilitate this vision and achieve this significant growth, India would need active participation of the
private sector, lower financing costs and adequate training facilities to nurture next-generation aviation personnel.
This will be possible if a robust regulatory framework is put in place which provides an investment friendly
environment. In the recent past, the government has taken various steps like allowing direct aviation turbine fuel
imports, removing freeze on international permissions to private carriers and the proposed easing of foreign direct
investment norms in the sector, to allow foreign carriers to invest 49% equity in domestic airlines. The
government's initiative to promote Public-Private-Partnership (PPP) in the airport sector is already witnessing the
creation of world class airport infrastructure, amply equipped to handle even the largest commercial aircraft. In the
current economic scenario, the government has to continuously support the sector and ensure its long term
growth.
I am certain that all these measures will provide a world class airport infrastructure which will be in line with the
aforementioned vision. The aviation industry will open new avenues for private participation, creating several
opportunities for players to successfully participate in this development. The anticipated investment for airport th
development during the 12 Five Year Plan is over INR 675 billion of which INR 500 billion is likely to be contributed
by the private sector.
YES BANK recognizes the enormous growth potential and needs of the growing aviation sector and in its capacity
as a knowledge driven Indian Bank, is committed to spearhead initiatives which can promote the development of
the sector in the long run.
We hope that this white paper will facilitate a better understanding of the sector and will be instrumental in
designing policy interventions to invigorate the aviation sector.
Dr. Rana Kapoor
Founder, Managing Director & CEO
Foreword
Abbreviations
Abbreviation Full Term
AAI Airport Authority of India
AERA Airport Economic Regulatory Authority
ASA Air Service Agreements
ATF Aviation Turbine Fuel
CAGR Compounded Annual Growth Rate
ECB External Commercial Borrowing
EGoM Empowered Group of Ministers
FDI Foreign Direct Investments
FSC Full Service Carrier
GHAIL GMR Hyderabad International Airport Limited
ICD Inland Container Depot
JV Joint Venture
KFA Kingfisher Airlines
LCC Low Cost Carrier
MAS Malaysian Airlines
MoCA Ministry of Civil Aviation
MRO Maintenance, Repair & Overhaul
OMC Oil Marketing Companies
PPP Public Private Partnership
Abbreviations
Abbreviation Full Term
AAI Airport Authority of India
AERA Airport Economic Regulatory Authority
ASA Air Service Agreements
ATF Aviation Turbine Fuel
CAGR Compounded Annual Growth Rate
ECB External Commercial Borrowing
EGoM Empowered Group of Ministers
FDI Foreign Direct Investments
FSC Full Service Carrier
GHAIL GMR Hyderabad International Airport Limited
ICD Inland Container Depot
JV Joint Venture
KFA Kingfisher Airlines
LCC Low Cost Carrier
MAS Malaysian Airlines
MoCA Ministry of Civil Aviation
MRO Maintenance, Repair & Overhaul
OMC Oil Marketing Companies
PPP Public Private Partnership
1. INDIAN AVIATION SECTOR 1
2. KEY DEVELOPMENTS 5
3. CHALLENGES 7
2.1 Direct ATF Imports 6
2.2 FDI in Domestic Airlines by Foreign Carriers 6
2.3 International Route for Private Airlines 6
2.4 Early Approvals for International Routes 6
2.5 Other Developments 6
3.1 Rising ATF prices and Steep Rupee Depreciation 8
3.2 High Debt Costs 8
3.3 Growing Competition 8
3.4 Growth and Profit Margins 8
3.5 Regulatory Environment 8
3.6 Valuation for FDI 9
3.7 Inadequate Infrastructure 9
Table of Contents
1. INDIAN AVIATION SECTOR 1
2. KEY DEVELOPMENTS 5
3. CHALLENGES 7
2.1 Direct ATF Imports 6
2.2 FDI in Domestic Airlines by Foreign Carriers 6
2.3 International Route for Private Airlines 6
2.4 Early Approvals for International Routes 6
2.5 Other Developments 6
3.1 Rising ATF prices and Steep Rupee Depreciation 8
3.2 High Debt Costs 8
3.3 Growing Competition 8
3.4 Growth and Profit Margins 8
3.5 Regulatory Environment 8
3.6 Valuation for FDI 9
3.7 Inadequate Infrastructure 9
Table of Contents
4. OPPORTUNITIES 11
CONCLUSION 15
Key YBL Transactions 16
4.1 Expansion of Metro Airports 12
4.2 Non-Metro and Green Field airports 12
4.3 Low Cost Airports 12
4.4 Aerotropolis 13
4.5 Maintenance, Repair & Overhaul (MRO) 13
4.6 Cargo Terminals 14
4.7 Fleet Expansion 14
Table of Contents
Indian Aviation Sector
1
CH
AP
TE
R
4. OPPORTUNITIES 11
CONCLUSION 15
Key YBL Transactions 16
4.1 Expansion of Metro Airports 12
4.2 Non-Metro and Green Field airports 12
4.3 Low Cost Airports 12
4.4 Aerotropolis 13
4.5 Maintenance, Repair & Overhaul (MRO) 13
4.6 Cargo Terminals 14
4.7 Fleet Expansion 14
Table of Contents
Indian Aviation Sector
1
CH
AP
TE
R
The Indian aviation sector promises huge growth
potential mainly due to large and growing middle
class population, favorable demographics, high
economic growth, rising disposable incomes and
overall lower penetration levels (less than 3%).
Despite strong growth, air travel penetration in India
remains among the lowest in the world. In fact, air
travel penetration in India is less than half of that in
China where people take 0.2 trips per person per
year, indicating strong long term growth potential.
The Aviation sector, in line with the economy, has
witnessed unprecedented growth in the last decade.
Forecast of air traffic carried out for the 12th Five
Year Plan period suggests that domestic passenger
throughput would grow at an average annual rate of
around 12%. In the last five years, domestic air traffic
has grown from 71.0 million in FY07 to 121.3 million
in FY12 (CAGR of 11.3%) and is expected to touch
around 209.0 million by FY17. In the same period,
international passenger throughput grew from 26.0
million in FY07 to 40.7 million in FY12 (CAGR of 9.4%)
and is estimated to grow at an average annual rate of
8% to reach 60.0 million passengers by FY17. In the
same time period fleet size is expected to double
from current levels. As on date, there are about 150
airports which include 5 international airports
developed under the public-private partnership
(PPP) mode viz. Cochin, Hyderabad and Bengaluru
international airports and the brownfield expansion
of Delhi and Mumbai international airports. The
Airport Authority of India (AAI) is also upgrading and
modernizing 35 non-metro airports in the country
including those at Agra, Ahmedabad, Amritsar,
Bhopal, Chennai, Jaipur, Kolkata, Pune and Goa.
The Indian airlines industry is segmented between
the Full Service Carrier (FSC) and Low Cost Carrier
(LCC). While earlier dominated by the government
owned Air India and Indian Airlines, the sector has
seen the entry of private players like Jet Airways,
Sahara, Air Deccan, Kingfisher, amongst many. The
consolidation of various players in the sector (Air
India- Indian Air l ines, KFA-Air Deccan, Jet
Airways–Sahara) has largely struggled to yield the
expected results. With the entry of LCC players like
Indigo, Spicejet and GoAir, the increased competition
with adequate market positioning has changed that
market share in favour of LCC.
Recently, certain airlines like Religare Aviation and
SpiceJet have set up short haul regional airline
operations to tap into rich and economically vibrant
regions of the country to improve their overall margins
and profitability. This has further pressed the FSC like
Jet Airways and Air India to think differently. Ancillary
revenues (viz. in-flight passenger spend, excess
2
Market share pattern
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY06 FY07 FY08 FY09 FY10 FY11 FY12
LCC FSC
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
FY07 FY08 FY09 FY10 FY11 FY12
Air traffic growth (million pax)
International Domestic
baggage, advertisement etc.) have become vital to
airlines' health and are now under active
consideration. Overall the end-user is benefitting from
better service and constantly improving on-time
performance of airlines.
Despite the growth witnessed over the last decade,
the Indian aviation sector, over the past few years, has
been going through a rough patch owing to the airline
operators facing issues like high fuel prices and
inadequate pricing power. This is primarily due to over
capacity in the industry and periods of subdued
demand growth. In the near term most operators are
likely to face liquidity constraints due to high debt
burden and would therefore require considerable
injection of capital to improve their balance sheets.
The Ministry of Civil Aviation (MoCA) is the nodal
agency responsible for the formulation of national
policies and programmes for development and
regulation of civil aviation and for devising and
implementing schemes for orderly growth and
expansion of civil air transport. The AAI handles all
matters relating to infrastructure for civil air traffic and
transport at the international and domestic airports
and enclaves in the country. Airport Economic
Regulatory Authority (AERA) reviews tariff structure
for aeronautical services and monitors performance
standards at airports.
3
Indian Civil Aviation: Industry Perspective Indian Civil Aviation: Industry Perspective
The Indian aviation sector promises huge growth
potential mainly due to large and growing middle
class population, favorable demographics, high
economic growth, rising disposable incomes and
overall lower penetration levels (less than 3%).
Despite strong growth, air travel penetration in India
remains among the lowest in the world. In fact, air
travel penetration in India is less than half of that in
China where people take 0.2 trips per person per
year, indicating strong long term growth potential.
The Aviation sector, in line with the economy, has
witnessed unprecedented growth in the last decade.
Forecast of air traffic carried out for the 12th Five
Year Plan period suggests that domestic passenger
throughput would grow at an average annual rate of
around 12%. In the last five years, domestic air traffic
has grown from 71.0 million in FY07 to 121.3 million
in FY12 (CAGR of 11.3%) and is expected to touch
around 209.0 million by FY17. In the same period,
international passenger throughput grew from 26.0
million in FY07 to 40.7 million in FY12 (CAGR of 9.4%)
and is estimated to grow at an average annual rate of
8% to reach 60.0 million passengers by FY17. In the
same time period fleet size is expected to double
from current levels. As on date, there are about 150
airports which include 5 international airports
developed under the public-private partnership
(PPP) mode viz. Cochin, Hyderabad and Bengaluru
international airports and the brownfield expansion
of Delhi and Mumbai international airports. The
Airport Authority of India (AAI) is also upgrading and
modernizing 35 non-metro airports in the country
including those at Agra, Ahmedabad, Amritsar,
Bhopal, Chennai, Jaipur, Kolkata, Pune and Goa.
The Indian airlines industry is segmented between
the Full Service Carrier (FSC) and Low Cost Carrier
(LCC). While earlier dominated by the government
owned Air India and Indian Airlines, the sector has
seen the entry of private players like Jet Airways,
Sahara, Air Deccan, Kingfisher, amongst many. The
consolidation of various players in the sector (Air
India- Indian Air l ines, KFA-Air Deccan, Jet
Airways–Sahara) has largely struggled to yield the
expected results. With the entry of LCC players like
Indigo, Spicejet and GoAir, the increased competition
with adequate market positioning has changed that
market share in favour of LCC.
Recently, certain airlines like Religare Aviation and
SpiceJet have set up short haul regional airline
operations to tap into rich and economically vibrant
regions of the country to improve their overall margins
and profitability. This has further pressed the FSC like
Jet Airways and Air India to think differently. Ancillary
revenues (viz. in-flight passenger spend, excess
2
Market share pattern
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY06 FY07 FY08 FY09 FY10 FY11 FY12
LCC FSC
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
FY07 FY08 FY09 FY10 FY11 FY12
Air traffic growth (million pax)
International Domestic
baggage, advertisement etc.) have become vital to
airlines' health and are now under active
consideration. Overall the end-user is benefitting from
better service and constantly improving on-time
performance of airlines.
Despite the growth witnessed over the last decade,
the Indian aviation sector, over the past few years, has
been going through a rough patch owing to the airline
operators facing issues like high fuel prices and
inadequate pricing power. This is primarily due to over
capacity in the industry and periods of subdued
demand growth. In the near term most operators are
likely to face liquidity constraints due to high debt
burden and would therefore require considerable
injection of capital to improve their balance sheets.
The Ministry of Civil Aviation (MoCA) is the nodal
agency responsible for the formulation of national
policies and programmes for development and
regulation of civil aviation and for devising and
implementing schemes for orderly growth and
expansion of civil air transport. The AAI handles all
matters relating to infrastructure for civil air traffic and
transport at the international and domestic airports
and enclaves in the country. Airport Economic
Regulatory Authority (AERA) reviews tariff structure
for aeronautical services and monitors performance
standards at airports.
3
Indian Civil Aviation: Industry Perspective Indian Civil Aviation: Industry Perspective
Key Developments
2
CH
AP
TE
R
Key Developments
2
CH
AP
TE
R
Supported by government initiatives the Indian civil
aviation industry has managed to exhibit resilience in
the face of the recent global economic slowdown.
Both passenger and cargo traffic have shown
moderate growth supported by modernization and
augmentation of capacities at various metro and
non-metro airports.
Some of the key developments in the sector have
been:
The Empowered Group of Ministers (EGoM) have in
February 2012 approved direct import of Aviation
Turbine Fuel (ATF) by the airlines. Considering that
nearly 45% of operating expenditure of airlines
constitutes of ATF, the taxation differential between
the currently applicable sales tax rates and likely
import duty could lead to 10-15% savings on the
operating cost of the airlines.
However, availability of supporting infrastructure is a
key requirement and airlines will have to enter into
infrastructure utilization arrangements with oil
marketing companies (OMCs) to benefit from this
development.
The government has recently allowed up to 49%
equity investment by foreign carriers in domestic
airlines. This development has the potential to shape
the future of Indian aviation as a global hub, with
increased interest from global players who will also
bring in their best practices. Further it may also
trigger interest from new players, who could then
commence operations with the support of strategic
foreign partners with balance sheet strength and
sector expertise to support the airline in difficult
times. More importantly, the development is
expected to ease liquidity constraints of domestic
airlines. Overall, this could increase competition,
offer more alternatives, reduce tariffs and improve
customer service over the medium term.
2.1 Direct ATF Imports
2.2 FDI in Domestic Airlines by Foreign Carriers
2.3 International Route for Private Airlines
2.4 Early Approvals for International Routes
2.5 Other Developments
In another major boost to private airlines, the Civil
Aviation Ministry in March 2012 has taken a
favourable view on their overseas expansions. Lower
utilizations of maximum permissible limits under the
bilateral Air Service Agreements (ASAs) have
prompted the move to allow eligible domestic
airlines (with more than 5 years experience) to
expand their international operations. The move will
benefit the private carriers as international flights
provide better margins owing to the availability of
fuel at international rates, higher auxiliary revenue
through in-flight sales and higher fleet utilization, as
international flight operations can take place during
the otherwise idle night hours.
The Civil Aviation Ministry is considering removing
the minimum eligibility criteria needed for airlines to
fly into international locations. This move will allow
Indian carriers to be on a level playing field with
International players. According to the current
norms, airlines should have domestic flying
experience of at least five years and a fleet of 20
aircraft to be eligible to fly to overseas destinations.
The move will benefit the private carriers as
international flights provide better margins, higher
auxiliary revenue and higher fleet utilization.
In addition to these initiatives, the government in
the Union Budget 2012-13, allowed full exemption
from customs duty and countervailing duty for
aircraft spares, tyres and testing equipment. This
move is expected to have marginal cost benefits for
Indian Maintenance, Repair & Overhaul (MRO)
service providers. Also the reduction in the rate of
withholding tax on interest payments on External
Commercial Borrowings (ECBs) from 20% to 5% is
expected to marginally lower the cost of borrowings
for airport developers.
6
Challenges
3
CH
AP
TE
R
Indian Civil Aviation: Industry Perspective
Supported by government initiatives the Indian civil
aviation industry has managed to exhibit resilience in
the face of the recent global economic slowdown.
Both passenger and cargo traffic have shown
moderate growth supported by modernization and
augmentation of capacities at various metro and
non-metro airports.
Some of the key developments in the sector have
been:
The Empowered Group of Ministers (EGoM) have in
February 2012 approved direct import of Aviation
Turbine Fuel (ATF) by the airlines. Considering that
nearly 45% of operating expenditure of airlines
constitutes of ATF, the taxation differential between
the currently applicable sales tax rates and likely
import duty could lead to 10-15% savings on the
operating cost of the airlines.
However, availability of supporting infrastructure is a
key requirement and airlines will have to enter into
infrastructure utilization arrangements with oil
marketing companies (OMCs) to benefit from this
development.
The government has recently allowed up to 49%
equity investment by foreign carriers in domestic
airlines. This development has the potential to shape
the future of Indian aviation as a global hub, with
increased interest from global players who will also
bring in their best practices. Further it may also
trigger interest from new players, who could then
commence operations with the support of strategic
foreign partners with balance sheet strength and
sector expertise to support the airline in difficult
times. More importantly, the development is
expected to ease liquidity constraints of domestic
airlines. Overall, this could increase competition,
offer more alternatives, reduce tariffs and improve
customer service over the medium term.
2.1 Direct ATF Imports
2.2 FDI in Domestic Airlines by Foreign Carriers
2.3 International Route for Private Airlines
2.4 Early Approvals for International Routes
2.5 Other Developments
In another major boost to private airlines, the Civil
Aviation Ministry in March 2012 has taken a
favourable view on their overseas expansions. Lower
utilizations of maximum permissible limits under the
bilateral Air Service Agreements (ASAs) have
prompted the move to allow eligible domestic
airlines (with more than 5 years experience) to
expand their international operations. The move will
benefit the private carriers as international flights
provide better margins owing to the availability of
fuel at international rates, higher auxiliary revenue
through in-flight sales and higher fleet utilization, as
international flight operations can take place during
the otherwise idle night hours.
The Civil Aviation Ministry is considering removing
the minimum eligibility criteria needed for airlines to
fly into international locations. This move will allow
Indian carriers to be on a level playing field with
International players. According to the current
norms, airlines should have domestic flying
experience of at least five years and a fleet of 20
aircraft to be eligible to fly to overseas destinations.
The move will benefit the private carriers as
international flights provide better margins, higher
auxiliary revenue and higher fleet utilization.
In addition to these initiatives, the government in
the Union Budget 2012-13, allowed full exemption
from customs duty and countervailing duty for
aircraft spares, tyres and testing equipment. This
move is expected to have marginal cost benefits for
Indian Maintenance, Repair & Overhaul (MRO)
service providers. Also the reduction in the rate of
withholding tax on interest payments on External
Commercial Borrowings (ECBs) from 20% to 5% is
expected to marginally lower the cost of borrowings
for airport developers.
6
Challenges
3
CH
AP
TE
RIndian Civil Aviation: Industry Perspective
The performance of the airline sector is highly linked
to the economic scenario which it operates in. With
the recent correction in economic growth, the sector
may witness a period of slower growth. This should
not deter any investment plans for the future as the
economy is expected to have robust growth in the
long term. Thus it is essential to plan investments
with longer horizons to achieve the potential of the
sector. Some of the challenges before the aviation
sector are detailed below:
A major portion of operating expenditure of airlines
constitutes of ATF. For Full Service Carriers it
contributes as much as 40% of the operating cost,
while for Low Cost Carriers it is as high as 55% in
some cases. Domestic ATF prices are linked to
fluctuations in crude oil prices and are also impacted
by currency fluctuations. The ATF prices have
increased by about 65% in the last 18 months. Due
to high central and state levies the ATF prices are
almost 60-65% higher in India compared to the
global average. Considering the weightage of ATF in
overall operating expenditure of airlines, the airlines
industry has been severely impacted by this increase.
B e s i d e s , t h e s t e e p r u p e e d e p r e c i a t i o n
(approximately 20% depreciation in the last 18
months) acts as a double whammy since apart from
fuel costs, substantial portion of other operating
costs like lease rentals, maintenance, expat salaries
and a portion of sales commissions are USD-linked or
USD-denominated.
The Indian aviation sector has significant debt
servicing obligations due to large Brownfield
expansions undertaken by airports and fleet
3.1 Rising ATF prices and Steep Rupee Depreciation
3.2 High Debt Costs
additions done by airline companies in the last 5
years. In the last year we have witnessed an increase
in lending rates which has translated into higher cost
of debt for the industry. Further the airports under
expansion are also affected by cost overruns or
changes in scope. Companies which have met their
funding requirements through foreign currency loans
are also impacted due to rupee depreciation.
Intensity of competitive rivalry is high in India's
aviation sector. Rivalry is increased by the fact that
nearly 70% of the market share is with low-cost
carriers, where the customers are most price
sensitive. Switching costs for buyers are low, which
means that it is easy for them to change to a
competitor. Taking into account the direct and
indirect costs of flying an aeroplane, it is in the best
interests of the airline to fly at maximum passenger
load factors. This sometimes leads to unviable price
fares for the operator.
Due to high correlation between growth in the
aviation sector and the economic scenario, the
sector has witnessed moderate passenger growth in
the last year. This coupled with competitive forces,
rise in ATF prices, rupee depreciation and high
interest costs has impacted the profit margins of the
airline operators.
While the government has been very supportive of
the industry, issues such as fixation of development
fee and availability of land are yet to be addressed.
Greenfield airport development requires huge land
area, acquisition of which is a challenge due to
multiple uses of the subject land. The proposed
3.3 Growing Competition
3.4 Growth and Profit Margins
3.5 Regulatory Environment
8
airport at Navi Mumbai, for instance, is facing
challenges in land acquisition due to price
determination. Any increase in acquisition cost can
severely impact the viability of the project. Thus it is
crucial to start the process of identifying and
allocating land for future airport development across
all Indian states.
While the government has approved 49% FDI in
airlines by foreign carriers, the financial health of the
global airline industry in the current economic
3.6 Valuation for FDI
environment and low market capitalization of
domestic airlines will prove to be deterrent in
attracting foreign carriers at valuations acceptable to
domestic players.
Despite certain improvements, the development of
airport infrastructure has not kept pace with
demand, thereby resulting in delays and higher costs
for airlines. Hence there is substantial scope for
fur ther improvements in a i rport re lated
infrastructure both quantitatively and qualitatively.
3.7 Inadequate Infrastructure
9
Indian Civil Aviation: Industry Perspective Indian Civil Aviation: Industry Perspective
The performance of the airline sector is highly linked
to the economic scenario which it operates in. With
the recent correction in economic growth, the sector
may witness a period of slower growth. This should
not deter any investment plans for the future as the
economy is expected to have robust growth in the
long term. Thus it is essential to plan investments
with longer horizons to achieve the potential of the
sector. Some of the challenges before the aviation
sector are detailed below:
A major portion of operating expenditure of airlines
constitutes of ATF. For Full Service Carriers it
contributes as much as 40% of the operating cost,
while for Low Cost Carriers it is as high as 55% in
some cases. Domestic ATF prices are linked to
fluctuations in crude oil prices and are also impacted
by currency fluctuations. The ATF prices have
increased by about 65% in the last 18 months. Due
to high central and state levies the ATF prices are
almost 60-65% higher in India compared to the
global average. Considering the weightage of ATF in
overall operating expenditure of airlines, the airlines
industry has been severely impacted by this increase.
B e s i d e s , t h e s t e e p r u p e e d e p r e c i a t i o n
(approximately 20% depreciation in the last 18
months) acts as a double whammy since apart from
fuel costs, substantial portion of other operating
costs like lease rentals, maintenance, expat salaries
and a portion of sales commissions are USD-linked or
USD-denominated.
The Indian aviation sector has significant debt
servicing obligations due to large Brownfield
expansions undertaken by airports and fleet
3.1 Rising ATF prices and Steep Rupee Depreciation
3.2 High Debt Costs
additions done by airline companies in the last 5
years. In the last year we have witnessed an increase
in lending rates which has translated into higher cost
of debt for the industry. Further the airports under
expansion are also affected by cost overruns or
changes in scope. Companies which have met their
funding requirements through foreign currency loans
are also impacted due to rupee depreciation.
Intensity of competitive rivalry is high in India's
aviation sector. Rivalry is increased by the fact that
nearly 70% of the market share is with low-cost
carriers, where the customers are most price
sensitive. Switching costs for buyers are low, which
means that it is easy for them to change to a
competitor. Taking into account the direct and
indirect costs of flying an aeroplane, it is in the best
interests of the airline to fly at maximum passenger
load factors. This sometimes leads to unviable price
fares for the operator.
Due to high correlation between growth in the
aviation sector and the economic scenario, the
sector has witnessed moderate passenger growth in
the last year. This coupled with competitive forces,
rise in ATF prices, rupee depreciation and high
interest costs has impacted the profit margins of the
airline operators.
While the government has been very supportive of
the industry, issues such as fixation of development
fee and availability of land are yet to be addressed.
Greenfield airport development requires huge land
area, acquisition of which is a challenge due to
multiple uses of the subject land. The proposed
3.3 Growing Competition
3.4 Growth and Profit Margins
3.5 Regulatory Environment
8
airport at Navi Mumbai, for instance, is facing
challenges in land acquisition due to price
determination. Any increase in acquisition cost can
severely impact the viability of the project. Thus it is
crucial to start the process of identifying and
allocating land for future airport development across
all Indian states.
While the government has approved 49% FDI in
airlines by foreign carriers, the financial health of the
global airline industry in the current economic
3.6 Valuation for FDI
environment and low market capitalization of
domestic airlines will prove to be deterrent in
attracting foreign carriers at valuations acceptable to
domestic players.
Despite certain improvements, the development of
airport infrastructure has not kept pace with
demand, thereby resulting in delays and higher costs
for airlines. Hence there is substantial scope for
fur ther improvements in a i rport re lated
infrastructure both quantitatively and qualitatively.
3.7 Inadequate Infrastructure
9
Indian Civil Aviation: Industry Perspective Indian Civil Aviation: Industry Perspective
Opportunities
4
CH
AP
TE
R
Opportunities
4
CH
AP
TE
R
The creation of modern and efficient infrastructure
at the airports to handle passenger volumes requires
huge investment. The aviation industry in India
currently has signif icant potential as the
d e ve l o p m e nt o f a i r p o r t s a n d ex p a n s i o n
requirements of airline services opens up new
avenues for private participation. Several
opportunities exist for players to successfully
participate in this development. Estimated
investment under the 12th Five Year plan in the
airport sector is set at INR 675.00 billion, of which
almost INR 500.00 billion is expected to be
contributed by the private sector.
In the last decade the expansion of operational
airports in metros has been done under the PPP
mode and was funded through a mix of debt, equity,
development fee and proceeds from real estate
development deposits. More than 70% of the total
air borne traffic is handled from metros namely
Mumbai, Delhi, Bangalore, Hyderabad, Kolkata and
Chennai. Most of these airports are already
operating at more than 80% of their capacity and
there are plans for capacity expansion to meet the
projected requirements.
Investments will have to be made not only to add
new terminals but also to improve the efficiency of
the current operations to handle more movements
per hour. Mumbai's airport is handles about 32
aircraft movements per hour from a single runway
while Delhi's airport can support approximately 55
aircraft movements from three runways. This, when
compared to London's Gatwick airport which handles
60 movements per hour from a single runway, draws
attention to the need and opportunity for
investment in efficiency improvement. Steps are
being taken by respective airports to bridge the gap
which will enable them to support the growing
demand for air travel.
4.1 Expansion of Metro Airports
4.2 Non-Metro and Green Field Airports
4.3 Low Cost Airports
As highlighted in aforementioned point, air traffic is
highly skewed, with metro airports handling most of
the air traffic. With the economic growth witnessed
by India, there is a large and growing middle class
population in non metro cities which needs air travel
connectivity. Currently a large part of this demand is
met through metro airports. To achieve the vision of
providing air services to everyone as well as
connectivity across the country, India would need
Greenfield airports. There is also a need for up-
gradation and modernization of the non-metro
airports to ensure better connectivity. This shall also
provide strong tail wind for investment in regional
airlines. Recently, players like Deecan Shuttles have
started regional services in the state of Gujarat.
The AAI had launched an ambitious project to
upgrade 35 non-metro airports at a cost of INR
100.00 billion and the Civil Aviation Minister
launched modernization projects in 5 non-metro
airports on a single day (February 19th, 2009), which
highlights the government's concern to speedily
move on airports up-gradation.
This would require a significant investment from the
private players with support from government
through viability gap funding, wherever required, to
attract interest from the private sector.
The market share of Low Cost Carriers (LCC) has
increased from 29% in FY06 to about 70% in FY12.
This highlights the need to bring down the cost of air
travel and to make it a more affordable and viable
mode of transport. There is a need for airports which
will complement the no-frills model offered by the
LCCs. Cost of setting up these airports can be
12
Indian Civil Aviation: Industry Perspective
lowered by some measures such as doing away with
baggage conveyor belts, aerobridges and buses for
the passengers without compromising on the safety
and security standards. Alternatively instead of
having a full fledged airport, there can be a Low Cost
Terminal (with a differentiated cost to Airlines and
hence the passenger) in cities that already have an
operational airport.
Such airports would help in the penetration of the
passenger traffic to non-metro airports and can
assist in reducing the costs incurred by the airlines
and decongesting traffic at other airports.
There is now a marked shift from the traditional City
Airport to Airport City – popularly called as
Aerotropolis. Airports today are much more than
just aviation infrastructure. They have become
multimodal, multi-functional enterprises generating
considerable commercial development within and
well beyond their boundaries.
Aerotropolis have spines and clusters of airport-
linked businesses along major airport arteries,
sometimes up to 20 km from the airport and include:
Business, Logistics and Industrial Parks
Wholesale merchandise marts
Information and Communication Technology
complexes
Hotel and Entertainment centres
Retail centres
Large mixed-use residential and social
infrastructure developments
Aerotropolis will help develop better connectivity to
the area and will also help develop social
infrastructure, the airport city as well as boost
business and trade in the region.
4.4 Aerotropolis
•
•
•
•
•
•
Bengal Aerotropolis Projects Ltd. is setting up the
country's first Aerotropolis in the Durgapur-Asansol
region of Bardhaman district in West Bengal. The
project, estimated to cost INR 6.06 billion, is
scheduled for completion in December 2012.
Airlines need regular maintenance for their aircrafts,
heavy airframe and engines and component repair
and overhaul. These MRO services can contribute
anywhere between 20-30% of the cost of operating
an aircraft. In addition to scheduled commercial
operators, the non-scheduled airlines – chartered
airlines operators and corporate-owned aircrafts –
would also be the purchasers of the MRO services.
The MRO industry in India is estimated at almost INR
22.50 billion and is expected to increase to INR 70.00
billion by 2020.
Apart from the growing requirement from Indian
players, this growth is also projected due to the
strategic geographical location with proximity to East
Asian, Middle East and European markets. Lower
labour costs in India compared to countries in the
west are also expected to spur the growth of the
industry. MRO facilities will foster creation of
ancillary and associated industries and services like
training institutes, component repair and testing etc.
With the government allowing 100% FDI in MRO
facilities this space offers significant opportunities for
investments. Players like MAS – GMR Aerospace
Company (JV of Malaysia Airlines (MAS) and GMR
Hyderabad International Airport Limited (GHIAL)) are
in talks with domestic and international airlines for
offering MRO services. Air India and Boeing have
formed a JV for setting up an MRO facility in Nagpur,
adjacent to the airport. The facility is expected to be
operational by the second quarter of CY2013.
4.5 Maintenance, Repair & Overhaul (MRO)
13
Indian Civil Aviation: Industry Perspective
The creation of modern and efficient infrastructure
at the airports to handle passenger volumes requires
huge investment. The aviation industry in India
currently has signif icant potential as the
d e ve l o p m e nt o f a i r p o r t s a n d ex p a n s i o n
requirements of airline services opens up new
avenues for private participation. Several
opportunities exist for players to successfully
participate in this development. Estimated
investment under the 12th Five Year plan in the
airport sector is set at INR 675.00 billion, of which
almost INR 500.00 billion is expected to be
contributed by the private sector.
In the last decade the expansion of operational
airports in metros has been done under the PPP
mode and was funded through a mix of debt, equity,
development fee and proceeds from real estate
development deposits. More than 70% of the total
air borne traffic is handled from metros namely
Mumbai, Delhi, Bangalore, Hyderabad, Kolkata and
Chennai. Most of these airports are already
operating at more than 80% of their capacity and
there are plans for capacity expansion to meet the
projected requirements.
Investments will have to be made not only to add
new terminals but also to improve the efficiency of
the current operations to handle more movements
per hour. Mumbai's airport is handles about 32
aircraft movements per hour from a single runway
while Delhi's airport can support approximately 55
aircraft movements from three runways. This, when
compared to London's Gatwick airport which handles
60 movements per hour from a single runway, draws
attention to the need and opportunity for
investment in efficiency improvement. Steps are
being taken by respective airports to bridge the gap
which will enable them to support the growing
demand for air travel.
4.1 Expansion of Metro Airports
4.2 Non-Metro and Green Field Airports
4.3 Low Cost Airports
As highlighted in aforementioned point, air traffic is
highly skewed, with metro airports handling most of
the air traffic. With the economic growth witnessed
by India, there is a large and growing middle class
population in non metro cities which needs air travel
connectivity. Currently a large part of this demand is
met through metro airports. To achieve the vision of
providing air services to everyone as well as
connectivity across the country, India would need
Greenfield airports. There is also a need for up-
gradation and modernization of the non-metro
airports to ensure better connectivity. This shall also
provide strong tail wind for investment in regional
airlines. Recently, players like Deecan Shuttles have
started regional services in the state of Gujarat.
The AAI had launched an ambitious project to
upgrade 35 non-metro airports at a cost of INR
100.00 billion and the Civil Aviation Minister
launched modernization projects in 5 non-metro
airports on a single day (February 19th, 2009), which
highlights the government's concern to speedily
move on airports up-gradation.
This would require a significant investment from the
private players with support from government
through viability gap funding, wherever required, to
attract interest from the private sector.
The market share of Low Cost Carriers (LCC) has
increased from 29% in FY06 to about 70% in FY12.
This highlights the need to bring down the cost of air
travel and to make it a more affordable and viable
mode of transport. There is a need for airports which
will complement the no-frills model offered by the
LCCs. Cost of setting up these airports can be
12
Indian Civil Aviation: Industry Perspective
lowered by some measures such as doing away with
baggage conveyor belts, aerobridges and buses for
the passengers without compromising on the safety
and security standards. Alternatively instead of
having a full fledged airport, there can be a Low Cost
Terminal (with a differentiated cost to Airlines and
hence the passenger) in cities that already have an
operational airport.
Such airports would help in the penetration of the
passenger traffic to non-metro airports and can
assist in reducing the costs incurred by the airlines
and decongesting traffic at other airports.
There is now a marked shift from the traditional City
Airport to Airport City – popularly called as
Aerotropolis. Airports today are much more than
just aviation infrastructure. They have become
multimodal, multi-functional enterprises generating
considerable commercial development within and
well beyond their boundaries.
Aerotropolis have spines and clusters of airport-
linked businesses along major airport arteries,
sometimes up to 20 km from the airport and include:
Business, Logistics and Industrial Parks
Wholesale merchandise marts
Information and Communication Technology
complexes
Hotel and Entertainment centres
Retail centres
Large mixed-use residential and social
infrastructure developments
Aerotropolis will help develop better connectivity to
the area and will also help develop social
infrastructure, the airport city as well as boost
business and trade in the region.
4.4 Aerotropolis
•
•
•
•
•
•
Bengal Aerotropolis Projects Ltd. is setting up the
country's first Aerotropolis in the Durgapur-Asansol
region of Bardhaman district in West Bengal. The
project, estimated to cost INR 6.06 billion, is
scheduled for completion in December 2012.
Airlines need regular maintenance for their aircrafts,
heavy airframe and engines and component repair
and overhaul. These MRO services can contribute
anywhere between 20-30% of the cost of operating
an aircraft. In addition to scheduled commercial
operators, the non-scheduled airlines – chartered
airlines operators and corporate-owned aircrafts –
would also be the purchasers of the MRO services.
The MRO industry in India is estimated at almost INR
22.50 billion and is expected to increase to INR 70.00
billion by 2020.
Apart from the growing requirement from Indian
players, this growth is also projected due to the
strategic geographical location with proximity to East
Asian, Middle East and European markets. Lower
labour costs in India compared to countries in the
west are also expected to spur the growth of the
industry. MRO facilities will foster creation of
ancillary and associated industries and services like
training institutes, component repair and testing etc.
With the government allowing 100% FDI in MRO
facilities this space offers significant opportunities for
investments. Players like MAS – GMR Aerospace
Company (JV of Malaysia Airlines (MAS) and GMR
Hyderabad International Airport Limited (GHIAL)) are
in talks with domestic and international airlines for
offering MRO services. Air India and Boeing have
formed a JV for setting up an MRO facility in Nagpur,
adjacent to the airport. The facility is expected to be
operational by the second quarter of CY2013.
4.5 Maintenance, Repair & Overhaul (MRO)
13
Indian Civil Aviation: Industry Perspective
4.6 Cargo Terminals
During the 12th Five Year Plan the total freight traffic
handled by Indian airports is expected to increase at
a CAGR of over 11% to reach 4.40 million metric
tonnes per annum. Pharmaceuticals, auto and
electrical equipment, IT hardware, garments and
perishable goods were the primary contributors to
this growth. International cargo, which accounts for
two-thirds of the total cargo handled, is mainly
concentrated at metros like Mumbai, Delhi, Chennai,
Bangalore and Hyderabad. These international
airports witnessed the entry of several leading
private domestic and global cargo operators such as
Celebi, CSC and Menzies bringing in the latest
technology and best practices.
This growth is expected to continue and would need
increased investments in Cargo terminals and other
infrastructure required for carrying out cargo
operations. Also, there is a need to augment off-
airport cargo processing facilities on the lines of
Container Freight Stations or Inland Container
Depots (ICD) so that congestion and delays in cargo
terminals at airports can be reduced.
To support the growth in air traffic there is a need for
fleet expansion. During the 12th Five Year Plan it is
expected that almost 300 business jets, 300 small
aircrafts and 250 helicopters will be added to the
general aviation fleet by FY2017. The scheduled
airline fleet is expected to add nearly 370 aircrafts by
FY2017. This provides a significant opportunity to
participate in the expansion plan through various
funding options like term loan, sale and lease back of
aircrafts etc.
4.7 Fleet Expansion
14
Indian Civil Aviation: Industry Perspective
In the midst of challenges, lies a greater opportunity
Despite the reality of high interest costs, devalued local currency and the slowdown in global economy, the
Indian aviation sector is likely to see clear skies ahead in the years to come with passenger traffic projected to
grow at a CAGR of approximately 15% in the next 5 years. The Vision 2020 statement announced by MoCA
envisages creating infrastructure to handle 280 million passengers by 2020. It highlights that the aviation sector
has a growth potential to absorb up to USD 120 billion of investment. Associated areas such as MRO and
training also offer high investment potential.
To overcome the prevailing challenges and accomplish the above vision, long term sustainable policy
guidelines, effective implementation of ATF imports, further penetration of air-travel to suburban cities,
coupled with entry of foreign players in the space could prove to be the game changer for both Airport
Operators and Airlines. With the government, recently announcing a slew of growth conducive policy
initiatives for the aviation sector, it bodes well for future of the Indian Aviation Sector.
Conclusion
15
4.6 Cargo Terminals
During the 12th Five Year Plan the total freight traffic
handled by Indian airports is expected to increase at
a CAGR of over 11% to reach 4.40 million metric
tonnes per annum. Pharmaceuticals, auto and
electrical equipment, IT hardware, garments and
perishable goods were the primary contributors to
this growth. International cargo, which accounts for
two-thirds of the total cargo handled, is mainly
concentrated at metros like Mumbai, Delhi, Chennai,
Bangalore and Hyderabad. These international
airports witnessed the entry of several leading
private domestic and global cargo operators such as
Celebi, CSC and Menzies bringing in the latest
technology and best practices.
This growth is expected to continue and would need
increased investments in Cargo terminals and other
infrastructure required for carrying out cargo
operations. Also, there is a need to augment off-
airport cargo processing facilities on the lines of
Container Freight Stations or Inland Container
Depots (ICD) so that congestion and delays in cargo
terminals at airports can be reduced.
To support the growth in air traffic there is a need for
fleet expansion. During the 12th Five Year Plan it is
expected that almost 300 business jets, 300 small
aircrafts and 250 helicopters will be added to the
general aviation fleet by FY2017. The scheduled
airline fleet is expected to add nearly 370 aircrafts by
FY2017. This provides a significant opportunity to
participate in the expansion plan through various
funding options like term loan, sale and lease back of
aircrafts etc.
4.7 Fleet Expansion
14
Indian Civil Aviation: Industry Perspective
In the midst of challenges, lies a greater opportunity
Despite the reality of high interest costs, devalued local currency and the slowdown in global economy, the
Indian aviation sector is likely to see clear skies ahead in the years to come with passenger traffic projected to
grow at a CAGR of approximately 15% in the next 5 years. The Vision 2020 statement announced by MoCA
envisages creating infrastructure to handle 280 million passengers by 2020. It highlights that the aviation sector
has a growth potential to absorb up to USD 120 billion of investment. Associated areas such as MRO and
training also offer high investment potential.
To overcome the prevailing challenges and accomplish the above vision, long term sustainable policy
guidelines, effective implementation of ATF imports, further penetration of air-travel to suburban cities,
coupled with entry of foreign players in the space could prove to be the game changer for both Airport
Operators and Airlines. With the government, recently announcing a slew of growth conducive policy
initiatives for the aviation sector, it bodes well for future of the Indian Aviation Sector.
Conclusion
15
With its unique value proposition and Knowledge Banking approach, YES BANK has emerged as a leading player
in Infrastructure Financing. Key aviation sector transactions are:
Key YBL Transactions
INR 350 MM
2011
INR 700 MM
2011
INR 6,420 MM
2011
Çelebi DIAL Cargo Project
Sole Underwriter and Lead
Arranger for Brownfield Cargo
Terminal Project
Airworks India
Senior Debt facility for
development of Airline MRO
SpiceJet Ltd.
Financier for capital expenditure
and pre delivery payments for
Boeing and Bombardier Aircrafts
INR 2,500 MM
2011
INR 520 MM
2010
INR 1,850 MM
2010
INR 1,050 MM
2011
16
N O T E S
GMR Hyderabad International
Airport Ltd.
Refinancing of project loan for
construction of Hyderabad
Airport
Mumbai International
Airport Ltd.
Working Capital facility
Bengal Aerotropolis Projects
Ltd.
Part financed the construction of
Airport as a part of the
Aerotropolis Project in the
Durgapur Asansol Region of West
Bengal
Religare Aviation Ltd.
Structured funding for aircrafts
and helicopters
With its unique value proposition and Knowledge Banking approach, YES BANK has emerged as a leading player
in Infrastructure Financing. Key aviation sector transactions are:
Key YBL Transactions
INR 350 MM
2011
INR 700 MM
2011
INR 6,420 MM
2011
Çelebi DIAL Cargo Project
Sole Underwriter and Lead
Arranger for Brownfield Cargo
Terminal Project
Airworks India
Senior Debt facility for
development of Airline MRO
SpiceJet Ltd.
Financier for capital expenditure
and pre delivery payments for
Boeing and Bombardier Aircrafts
INR 2,500 MM
2011
INR 520 MM
2010
INR 1,850 MM
2010
INR 1,050 MM
2011
16
N O T E S
GMR Hyderabad International
Airport Ltd.
Refinancing of project loan for
construction of Hyderabad
Airport
Mumbai International
Airport Ltd.
Working Capital facility
Bengal Aerotropolis Projects
Ltd.
Part financed the construction of
Airport as a part of the
Aerotropolis Project in the
Durgapur Asansol Region of West
Bengal
Religare Aviation Ltd.
Structured funding for aircrafts
and helicopters
N O T E S
YES BANK, India's new age private sector Bank, is the outcome of the professional commitment of its Founder,
Managing Director, & CEO Dr. Rana Kapoor supported by his highly competent top management team, to
establish a high quality, customer centric, service driven, private Indian Bank catering to “Emerging India”. YES
BANK has adopted international best practices, the highest standards of service quality and operational
excellence, and offers comprehensive banking and financial solutions to all its valued customers. A key strength
and differentiating feature of YES BANK is its knowledge driven approach to banking and an unprecedented
customer experience for its retail and wealth management clients.
YES BANK is a knowledge driven organisation and is structured around product and knowledge teams. Business
dynamics vary from sector to sector and YES BANK believes that in-depth understanding of each sector is
crucial for success and sustenance. In tune with this belief, YES BANK has built the “Development and
Sustainable Banking” to focus on individual priority sectors. Our knowledge banking initiatives across sectors
continue to gain traction with several State Governments and Central Ministries appointing YES BANK as their
strategic advisors on significant projects.
YES BANK is steadily building corporate and institutional banking, financial markets, investment banking,
corporate finance, business (SME) and transaction banking, retail banking and wealth management business
lines across the country. The Bank's constant endeavor is to provide a delightful banking experience expressed
with simplicity, empathy and totality.
ASSOCHAM, acknowledged as the Knowledge Chamber of India, has emerged as a forceful, pro-active, effective
and forward looking institution playing its role as a catalyst between the Government and Industry. Established
in 1920, the Chamber has been successful in influencing the Government in shaping India’s economic, trade,
fiscal and social policies which will be of benefit to trade and industry. ASSOCHAM renders its services to over
4,00,000 members which include multinational companies, India’s top corporates, medium and small scale
units and associations representing the interest of more than 400 Chambers and Trade Associations from all
over India encompassing all sectors.
ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities in India. It has
been acknowledged as a significant voice of the Indian industry especially in the fields of Corporate Social
Responsibility, Environment & Safety, Corporate Governance, Information Technology, Agriculture,
Nanotechnology, Biotechnology, Pharmaceuticals, Telecom, Banking & Finance, Company Law, Corporate
Finance, Economic and International Affairs, Tourism, Civil Aviation, Infrastructure, Energy Power, Education,
Legal Reforms, Real Estate, Rural Development etc. The Chamber has its international offices in China, Sharjah,
Moscow, UK and USA. ASSOCHAM has also signed MoUs to set up partnerships with Business Chambers in
more than 75 countries.
N O T E S
YES BANK, India's new age private sector Bank, is the outcome of the professional commitment of its Founder,
Managing Director, & CEO Dr. Rana Kapoor supported by his highly competent top management team, to
establish a high quality, customer centric, service driven, private Indian Bank catering to “Emerging India”. YES
BANK has adopted international best practices, the highest standards of service quality and operational
excellence, and offers comprehensive banking and financial solutions to all its valued customers. A key strength
and differentiating feature of YES BANK is its knowledge driven approach to banking and an unprecedented
customer experience for its retail and wealth management clients.
YES BANK is a knowledge driven organisation and is structured around product and knowledge teams. Business
dynamics vary from sector to sector and YES BANK believes that in-depth understanding of each sector is
crucial for success and sustenance. In tune with this belief, YES BANK has built the “Development and
Sustainable Banking” to focus on individual priority sectors. Our knowledge banking initiatives across sectors
continue to gain traction with several State Governments and Central Ministries appointing YES BANK as their
strategic advisors on significant projects.
YES BANK is steadily building corporate and institutional banking, financial markets, investment banking,
corporate finance, business (SME) and transaction banking, retail banking and wealth management business
lines across the country. The Bank's constant endeavor is to provide a delightful banking experience expressed
with simplicity, empathy and totality.
ASSOCHAM, acknowledged as the Knowledge Chamber of India, has emerged as a forceful, pro-active, effective
and forward looking institution playing its role as a catalyst between the Government and Industry. Established
in 1920, the Chamber has been successful in influencing the Government in shaping India’s economic, trade,
fiscal and social policies which will be of benefit to trade and industry. ASSOCHAM renders its services to over
4,00,000 members which include multinational companies, India’s top corporates, medium and small scale
units and associations representing the interest of more than 400 Chambers and Trade Associations from all
over India encompassing all sectors.
ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities in India. It has
been acknowledged as a significant voice of the Indian industry especially in the fields of Corporate Social
Responsibility, Environment & Safety, Corporate Governance, Information Technology, Agriculture,
Nanotechnology, Biotechnology, Pharmaceuticals, Telecom, Banking & Finance, Company Law, Corporate
Finance, Economic and International Affairs, Tourism, Civil Aviation, Infrastructure, Energy Power, Education,
Legal Reforms, Real Estate, Rural Development etc. The Chamber has its international offices in China, Sharjah,
Moscow, UK and USA. ASSOCHAM has also signed MoUs to set up partnerships with Business Chambers in
more than 75 countries.
Knowledge Banking Partner