INTERNATIONAL SETUP FOR AIR

TRANSPORT

SUBMITTED TO- SUBMITTED BY-

Mr.YUSUF KAMAL NABEEL
MERAJ MBA-IB
(III-SEMESTER)

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 ACKNOWLEDGEMENT
I am using this opportunity to express my gratitude to everyone who
supported me throughout the course of this project. I am thankful for their
aspiring guidance, invaluably constructive criticism and friendly advice
during the project work. I am sincerely grateful to them for sharing their
truthful and illuminating views on a number of issues related to the project.
I expresses my warm thanks to Mr. Yusuf Kamal for his support and
guidance.
I would also like to thank my batch mates and all the people who helped me
during the compeletion assignment.

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 CONTENTS
1. INTRODUCTION…………………………………………………………

2. OPPORTUNITIES IN AVIATION SECTOR……………………………

3. INTERNATIONAL AIR TRANSPORT AVIATION……………………..

4. PROBLEMS FACED BY THE INTERNATIONAL AIR TRANSPORTS

5. PROSPECTS OF INTERNATIONAL AIR TRANSPORTS……………

6. CONCLUSION……………………………………………………………..

7. BIBLIOGRAPHY……………………………………………………………

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 AIR TRANSPORT
INTRODUCTION
Air transport is one of the fastest
modes of public transport which
connects international boundaries.
Air transport allows people from
different countries to cross
international boundaries and travel
other countries for personal,
business, medical, and tourism
purposes. Although, air transport
provides the fastest means by saving
the time of journey, another aspect of
air transport is the facilities and
comfort level of the passengers.
There are lots of air transport companies such as Air India, Indigo airlines,
Aeroflot, etc. Nowadays, there is a competitive environment among the
airline industries. Every company is providing a variety of facilities to attract
the passengers. The only motive is to improve their profit. Few years back, it
was difficult to identify the needs and desires of passengers. But with the
advancement of social media like Facebook, Twitter, etc., passengers are
sharing their views on different types of airline facilities during their travel
on social media platforms. This sharing of information plays a huge role to
increase the competitiveness among the airline industries. It also provides a
chance to improve their services and facilities for the travelers worldwide.
But the fact is how to analyze the need and important requirements of
travelers just with the information they shared on social media. The millions
of travelers traveling in the airlines and sharing their views on social media
generate a huge amount of data. In this study, we use a dataset of different
tweets. Tweet is a name given to the information sharing on Twitter platform.
Twitter is the one of the most preferable information sharing platforms for all

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travelers. Wherever a traveler goes, whatever he does, he just tweets his view
about his activity and experiences on Twitter.
Sentiment is another name for the view and opinion that is held or expressed.
The sentiment may represent a feeling of joy, happiness, sadness, or
sometimes anger. And this is what travelers’ tweets about on Twitter. Every
journey on airlines can bring either pleasure or discomfort during travel for
any passenger. If the traveler is not happy with the services, his tweet
represents a sentiment of discomfort. If he is fully satisfied with the services,
he will show a feeling of happiness in his tweet. The British airways further
took it seriously and resolved the issues of the respective traveler.
Therefore, tweets do not only allow the airlines to sort out the problems of
individual passengers but also help them to improve their services. The one
or two people are just exceptions. The important thing to be concerned is the
opinion of majority of travelers. To understand the psychology and opinion
of the majority of travelers from all around the world, we must look into
everyone's view, which is a rather impossible job. As millions of people are
traveling daily from one place to another and tweeting about their journey
experience, it creates a huge database of tweets. Therefore, it is important to
use a technique which has the power to analyze such a huge data of tweets.

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 OPPORTUNITIES IN AVIATION SECTOR
Air transport is a developing business sector with rapidly increasing rates
in transport loads and fuel demand .
For example:
(1) air passenger transport increased from 2.072 billion in 2006 to 3.213
billion passengers in 2014
(2) the related revenue passenger kilometres (RPK) performed grew about
6% per year on average between 2001 and 2013, reaching 5.8 trillion RPK,
international and domestic services combined
(3) world scheduled air freight traffic expressed in freight tonne-kilometres
performed grew by 0.4% in 2013, and is expected to increase by about 4%
per year in 2014, 2015, and 2016, respectively
(4) kerosene demand increased steadily to 6.3 mb/day in 2013, which is
equivalent to about 10 EJ/a.

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A strong increase in air transport is also expected for the future – that is,
Airbus and Boeing project passenger transport growth of about 5% per year
from 2010 to 2030. Air traffic is expected to increase from 3.8% to 5.1% per
year, which will lead to over 18 billion RPK in 2040 compared to around 5
billion RPK in 2010 (Fig. 13.1). The related increase in kerosene demand is
expected with ‘only’ 1.5% per year between 2012 and 2035 because of
several improvements in the specific fuel demand. Due to the long life of
aircraft products, particularly engines (typically 30–40 years), the speed at
which these improvements are incorporated into the total fleet is a slow
process. Besides the fuel efficiency of aircraft, another major area that offers
considerable potential for significantly reducing fuel demand is the
optimization of air traffic management.

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 INTERNATIONAL AIR TRANSPORT
ASSOCIATION (IATA)
The International Air Transport Association (IATA) was founded in 1945
and is the trade association of more than 240 airlines, including the world’s
largest. Flights by the Member airlines comprise more than 84% of all
international scheduled air traffic.

IATA is the successor to the international Air Traffic Association founded in

the Hague in 1919-the year of the world’s first international scheduled air
transport services. IATA is the prime facilitator for inter-airline co-operation
in promoting safe, reliable, secure and economical air services for the benefit
of the world’s consumers.

IATA’s head office is in Montreal (Quebec, Canada) and its executive office
is in Geneva (Switzerland). IATA also has regional offices around the world.

IATA has been described as "the world aviation cartel". IATA enjoyed
immunity from antitrust law in several nations.
At a time when many airlines were government owned and loss-making,
IATA operated as a cartel, charged by the governments with setting a fixed
fare structure that avoided price competition. The first Traffic Conference
was held in 1947 in Rio de Janeiro and reached unanimous agreement on
some 400 resolutions.
IATA states that safety is its number one priority. The main instrument for
safety is the IATA Operational Safety Audit (IOSA). IOSA has also been
mandated at the state level by several countries. In 2017, aviation posted its
safest year ever, surpassing the previous record set in 2012. The new global
Western-built jet accident rate became the equivalent of one accident every
7.36 million flights.] Future improvements will be founded on data sharing
with a database fed by a multitude of sources and housed by the Global
Safety Information Center. In June 2014 the IATA set up a special panel to
study measures to track aircraft in flight in real time. The move was in
response to the disappearance without trace of Malaysia Airlines Flight
370 on 8 March 2014.

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IATA members and all industry stakeholders have agreed to three sequential
environmental goals:

1. An average improvement in fuel efficiency of 1.5% per annum from

2009 through 2020
2. A cap on net carbon emissions from aviation from 2020 (carbon-neutral
growth)
3. A 50% reduction in net aviation carbon emissions by 2050 relative to
2005 levels.
At the 69th IATA annual general meeting in Cape Town, South Africa,
members overwhelmingly endorsed a resolution on "Implementation of the
Aviation Carbon-Neutral Growth (CNG2020) Strategy."[18]
The resolution provides governments with a set of principles on how
governments could:

 Establish procedures for a single market-based measure (MBM)

 Integrate a single MBM as part of an overall package of measures to
achieve CNG2020
IATA member airlines agreed that a single mandatory carbon offsetting
scheme would be the simplest and most effective option for an MBM.

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 PROBLEMS FACED BY THE
INTERNATIONAL AIR TRANSPORT

 HIGH OPERATIONAL COSTS :

Running an airline is unavoidably expensive. One of the most basic
costs is the price of buying the airplanes themselves. For instance, a
Boeing 737, a relatively small passenger jet, costs around $50 million
or more. Larger jets can approach $300 million in price.

Hiring qualified pilots to fly the planes is another major cost. A pilot
with 10 years of experience will earn upwards of $100,000 in annual
salary. First officers and other crew members make less, but still
represent a major cost .

Countless other expenses also weigh down an airline's bottom line:

maintenance costs, fees paid to airports, fees paid to the government,
the cost of food served to passengers, the cost of running computer
systems to track bookings, fees and percentages paid to travel agents
and Web sites, pilot training, and other incidental costs all add to
operating expenses.

 HIGH COST OF AVIATION TURBINE FUEL:

Fuel costs not only take a huge chunk out of an airline's revenue, they
are notoriously volatile. From month to month, airlines never know
exactly how much fuel is going to cost. Domestic airlines in the U.S.
spend a combined $2 to $5 billion on jet fuel every month.

 HIGH SERVICE TAX –

Recently, the GST Council announced the rates of Goods and Services
Tax applicable on the supply of various goods and services. These rates
are distributed across different rate bands of 5%, 12%, 18% and
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 28%.One such service which is extensively used and is one of the
booming sectors of the Indian economy is civil aviation. Over the last
few years the civil aviation industry has witnessed exponential growth
under the VAT and Service Tax regime. Under the new regime, the
GST Council has lowered the tax rate for economy class flight tickets
to 5%. However, the business class tickets will attract a higher tax at
12% after GST implementation from 1 July.

 LACK OF QUALIFIED PILOTS :

Many airline industry experts have recently predicted crippling
shortages in the supply of Airline Transport Pilots. The main reasons
for concern in the United States over pilot shortages arises from recent
legislation stemming from the 2009 Colgan air crash, an impending
wave of mandatory retirements, a decreasing supply of new
professional pilots into the pipeline, and major airline expansion. This
study provides a comprehensive Airline Transport Pilot (ATP) supply
and demand model and then assesses the current and future ATP supply
and demand pipeline, to include the impact on the U.S. military pilot
population. Subsequently, it evaluates policy options available to
government, industry, and the military to mitigate any potential
shortfalls in the future supply chain. This study finds there will not be a
civilian system-wide pilot shortage in the near-term, though the system

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 will become strained. Low-paying airlines will continue to have
difficulties finding qualified pilots. All operators will experience fewer
applicants for the available positions, potentially resulting in less
qualified pilots system-wide. Barring any policy changes, the military
will experience an inventory shortage in the near-term.

 CONGESTION AT AIRPORTS :
One of the current challenges to aviation is reducing the congestion in
major airports. The existing airport facilities, especially at hub airport,
are much smaller to accommodate the huge number of passengers and
cargo. While some counties have airport expansion plans, other
counties are developing new airports to meet this demand. However,
due to many factors, airport expansion is not feasible for many
countries. Some, but not most, airports are “congested.” Of those
airports that are periodically congested, many are congested by one
airline operating a hub. The congestion from the hub airline delays
mainly its own flights, inconveniencing only a few of the flights of
other airlines, so that the costs of delay from accommodating
simultaneous demand are largely internalized to that hub airline. When
it considers whether to schedule an additional flight to its hub during a
peak period, the hub airline considers the effect of that flight on other
flights along with the other revenues and expenses associated with
the flight.

 HIGH FOREIGN EXCHANGE RATE :

The currency exchange rate is play the major role in airline business,
currency exchange rate play when it comes to cost, because almost all
cost aspect is pay in dollar while many of revenue is on local currency,
if exchange rate of dollar is increase so the cost also increase and when
exchange rate of dollar decrease so the cost, impact currency exchange
it also depend value of the local currency example if exchange rate of
dollar is increase the impact of the increase for Singapore, Malaysia,
and Indonesia is difference because of the value of the local currency is
difference.

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 PROSPECTS OF INTERNATIONAL AIR
TRANSPORT
The air transportation system is changing and will continue to change. Over
the long term, however, it will be difficult for the air transportation system to
change rapidly enough to meet changing requirements related to capacity,
environmental effects, consumer satisfaction, safety, and security, while
meeting ongoing requirements for the economic viability of service
providers.

The air transportation system around the world is changing and will continue
to change in response to many different factors.

 The Indian Aviation Sector is likely to see clear skies ahead in the
years to come.
Passenger traffic is projected to grow at a CAGR of over 15 percent in
the next 5 years.
The Vision 2020 statement announced by the Ministry of Civil
Aviation , envisages creating infrastructure to handle 280 million
passenger by 2020
India’s Aviation Industry is expected to witness Rs 35,000 crore (US$
4.99 billion) investment in the next four years. The Indian
Government is planning to invest US$ 1.83 billion for development of
airport infrastructure along with aviation navigation services by 2026.
Associated areas such as maintenance, repair and overhaul (MRO)
and training offer high investment potential. A report by Ernst and
Young says the MRO category in the Aviation sector can absorb upto
US$ 120 billion worth of investment by 2020.
Aerospace major Boeing forecasts that the Indian market will require
1000 commercial jets in the next 20 years, which will represent over 3
percent of Boeing Commercial Airplanes forecasted market
worldwide. This makes India a US$ 100 billion markets in 20 years.

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 CONCLUSION
I would liked to conclude that this industry has immense opportunity in order
to grow its market share, size and in order to create network in more effective
and efficient manner.
It can help us to reduce overall transportation cost by reducing fuel cost ,
operation cost and services tax. Further it will be beneficial if the currency or
exchange rate will be stable in order to reduce the cost of transportation or
also to maintain stable pricing.
The airline industry is cyclical and sensitive to a number of external
economicfactors that affect the number of domestic and international
travelers, including consumerconfidence and corporate profit. Improved
economic conditions over the five years to2016 have increased demand for
both business and consumer travel. The newer aircraftsare continuing to
update to satisfy the request from consumers. There has been atremendous
surge in the percentage of people who are now traveling longer distances
andbecoming frequently flyers more than ever before. As far as changes in
travel preferencesmillennial are found to be willing to spend more on
business travel than other generationswhen it comes to business travel.
Globally the aviation industry is consumers over 200million tons of jet fuel
per year (IBIS World, 2016). There is an increasing demand forinternational
flight and airport are beginning to grow and airports now have a system
tocomply with passengers with connecting flights, it is very important for
airport tostandardize their processes in order to minimize passenger
confusion benefiting the foottraffic of airport and making the airlines more
profitable.

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 BIBLIOGRAPHY
1. https://www.sciencedirect.com/topics/engineering/air-transport
2. https://www.mapsofindia.com/my-india/business/in-indias-
burgeoning-aviation-sector-safety-is-the-key-word
3. www.en.wikipedia.org

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