Mobility and its pillars of transport (air, inland and maritime) are at the very centre of our socio-economic fabric. Also, in today’s world, mobility by air is all about efficiency, speed, interconnectivity and accessibility. Here, aviation facilitates access to countries and cities, increases multi-layered efficiencies in travel and makes safety and security in travel top priorities.
Air transport makes rapid movement possible, formed a global transportation network, generating economic growth, creating jobs, and facilitating international connections, trade and tourism. Aviation has become the enabler of business around the world and the international community has recognised it as an essential enabler in achieving the UN Sustainable Development Goals I the coming years. Hence aviation became one of the fastest-growing industries in the world. With this, the Indian government is also expanding its policies & schemes like FDI (Foreign Direct Investment), RCS (Regional Connectivity Scheme) and UDAN (Ude Desh Ka Aam Nagrik) etc. to help with the growth of the civil aviation industry
The civil aviation industry in India has emerged as one of the fastest-growing industries in the country during the last three years. India has become the third-largest domestic aviation market in the world and in 2024 it is expected to overtake the UK to become the third-largest air passenger market.
India is expected to overtake China and the United States as the world's third-largest air passenger market in the next ten years, by 2030, according to the International Air Transport Association (IATA). The rising demand in the sector has pushed the number of aeroplanes operating in the domestic and international aviation sectors. The number of aeroplanes in the sky taking people across the world is expected to reach 1,100 planes by 2027. Indian carriers are expected to double their fleet capacity to around 1,100 aircraft by 2027. The Indian civil avaition aims to have as many as 220 new airports by 2025, said Mr Jyotiraditya Scindia, Minister of Civil Aviation. Cargo flights for perishable food items will also be increased to 30% with 133 new flights in the coming years as it will strengthen the cargo movement across the country despite the geographical differences. Even the industry is witnessing massive growth, the indian aviation industry is largely untapped with huge growth opportunities. The air transport is still expensive to vast majority of the population.
In recent years with the Open Sky Policy and UDAN scheme of the Government of India many big aviation players have entered the industry and are making huge investments, have paced up the growth potential of the industry. Advanced aircraft and new, improved airports are coming up in various parts of India, creating massive job opportunities for aviation and AME aspirants across the country.
1. Northeast India
- Over 30 airport development projects are under progress across various regions in Northeast India.
- AAI plans to develop over 20 airports in Tier-II and Tier-III cities in the next 5 years.
- AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and Dibrugarh as intra-regional hubs.
- In October 2021, the Minister of Civil Aviation, Mr Jyotiraditya M. Scindia, virtually flagged off six routes expanding the aerial connectivity of Northeast India and the first direct flight along the Shillong–Dibrugarh route, under the RCS-UDAN (Regional Connectivity Scheme - Ude Desh Ka Aam Naagrik) scheme.
2. Greater focus on infrastructure
- AAI plans to invest Rs. 25,000 crores (US$ 3.58 billion) in the next five years to augment facilities and infrastructure at airports. The Indian Government is planning to invest US$ 1.83 billion for the development of airport infrastructure along with aviation navigation services by 2026.
- In 2019, 85 AAI airports were declared as Single-Use Plastic Free Airport Terminals.
3. Liberalization, open sky policy
- With the opening of the airport sector to private participation, six airports across major cities are being developed under PPP.
- Currently, 60% of airport traffic is handled under PPP, while the remaining 40% is managed by AAI.
- Increased traffic rights under bilateral agreements with foreign countries
- India signed its 1st open skies agreement with Greece.
4. National Civil Aviation Policy, 2016
- The policy covers 22 areas of the civil aviation sector.
- Regional Connectivity Scheme (RCS) has been launched under the policy.
- Airlines can commence international operations and will have to deploy 20 aircraft or 20% of their total capacity (whichever is higher) for domestic operations.
5. Encouragement to FDI
- The Government has allowed 100% FDI under automatic routes for greenfield projects, whereas 74% FDI is allowed under automatic routes for brownfield projects.
- 100% FDI is allowed under automatic routes in scheduled air transport service, regional air transport service and domestic scheduled passenger airlines. FDI over 49% would require Government approval.
- Approval of 49% FDI in aviation for foreign carriers.
- FDI inflows in India’s air transport sector (including air freight) reached US$ 3.54 billion between April 2000-March 2022.
- Huge potential to develop India as an MRO hub. India’s MRO industry is expected to grow from US$ 800 million in 2018 to more than US$ 2.4 billion by 2028.
- Indian airline companies will spend over 12-15% of their revenues on maintenance, which is the second highest cost component after fuel.
- The government has envisaged making India a global MRO hub, handling nearly 90% of the MRO needs of Indian operators and obtaining around 20% of the MRO revenue from foreign-registered aircraft.
- To achieve this, the government has proposed various key steps including setting up of a high-power task force for the promotion of MRO, declaration of MRO and component warehouses as free trade zones with 0% GST, and import restrictions.
Some facts about Aviation
- India is the third-largest domestic aviation market and growing at a rapid pace with the increase in air travel.
- 60% of the airspace of India is being utilized and more growth is expected when the sector functions using its full resources.
- The government announced that India is pacing to become a global hub for the Maintenance and Repair of aeroplanes.
- India is also becoming a Cargo Hub like the Multi-modal International Cargo Hub and Airport (MIHAN) at Nagpur.
- As of now, 464 airports are functioning in India while 124 are owned by the Airport Authority of India (AAI).
- Several airports/airstrips are in the process of developing in different parts of the country.
- 91 national and international airlines are being operated from India and many are planning to enter the market shortly.
- Scope for the development of regional air transport in our country under the “UDAN” RCS (scheme).
- A steady increase in the number of MROs creates more job opportunities.
- India is targeting to have more than 200 International Airports in the next 10 years of time.
- Major firms like Tata, Mahindra, Bajaj, Reliance, Adani etc. have started investing in the aviation sector.