Aviation - Indian Agreement with European Union

India and the European Union (EU) signed a landmark pact on civil aviation which will work like an 'open skies' agreement encouraging more airlines to offer services between the two continents.The Horizontal Civil Aviation Agreement that will effectively legalise 26 separate deals, which India had held with individual EU member states, was signed here last night on the eve of their ninth annual India-EU Summit.The deal was inked by India's ambassador to the EU J Bhagwati and officials from the French government and the EU's bureaucracy just ahead of the talks between Prime Minister Manmohan Singh and French President Nicolas Sarkozy, the current holder of the EU's rotating presidency, in the French port city of Marseille.The aviation deal described as a liberal pact puts an end to nearly six years of legal uncertainty which began when the European Court in November 2002 decided that bilateral deals on civil aviation services between EU member states and third countries discriminated against airlines from other EU states.It does not in itself change the number or frequency of flights between the EU and India, but EU officials said they hope it will encourage more airlines to offer services between the continents.Air India, Jet Airways and Kingfisher Airlines can hope to get more access to European destinations. EU carriers can also have better access to India.In a way, the pact will work like an 'open skies' agreement between India and the EU, officials said.The agreement between two of the world's largest trading partners provides far more flexibility than the air service arrangements being pursued by India with individual EU members.

Aviation in BOOM !

The Indian aviation industry has shown continued growth in recent years with key drivers being positive economic factors (including high GDP growth), industrial performance, corporate profitability/expansion, higher disposable incomes and growth in consumer spending as well as wider availability of low fares.

The current growth rate in domestic and international travel exceeds 25%, the highest in the world. In the period April-September 2007, the total aircraft movements witnessed an increase of 29.6% year-on-year to 494.92 thousand aircraft movements, as compared to 318.89 thousand during April-September 2006.

The Indian aviation industry is expected to grow at a compounded annual growth rate of 25% till 2010. Also, by 2010 Indian airports will be handling between 90 and 100 million passengers per year, as against the current 34 million passengers. It is expected that nearly 80% of this growth will be driven by the low cost carrier segment (LCC). By 2008, the LCCs would capture 65% of the direct on-line air ticket market from 61% in 2005.