Aviation
India is the world's ninth largest civil aviation market.

Indian Aviation Industry

Latest update: March, 2015

Aircraft movement in India

Total aircraft movement recorded a CAGR of 8.4 per cent over FY06-13.

Aircraft movement in India

Passenger traffic in India

Total passenger traffic stood at a 154.5 million in FY14.

Passenger traffic in India

Freight traffic in India

Freight traffic is expected to be 11.4 MT by 2032.

Freight traffic in India

International freight traffic

International freight traffic rose 6.2 per cent during FY06-13.

International freight traffic

Updated: March, 2015

SECTORAL REPORT | March, 2015

Introduction

The Indian civil aviation industry is on a high growth trajectory. India has a vision of becoming the third largest aviation market by 2020 and is expected to be the largest by 2030.

The civil aviation industry in India has ushered in a new era of expansion driven by factors such as low-cost carriers (LCC), modern airports, foreign direct investments (FDI) in domestic airlines, cutting edge information technology (IT) interventions and a growing emphasis on regional connectivity. In terms of market size, the Indian civil aviation industry is amongst the top 10 in the world with a size of around US$ 16 billion.

“The world is focused on Indian aviation – from manufacturers, tourism boards, airlines, global businesses to individual travelers, shippers and businessmen… If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand,” said Mr Tony Tyler, Director General and CEO, International Air Transport Association (IATA).

Market Size

India’s scheduled airlines carried 67.73 million passengers in 2014 compared with 61.42 million passengers in 2013, and 58.81 million in 2012, according to the DGCA. Air traffic in India grew between 20 and 40 per cent for six years starting 2003, when low-fare airline Air Deccan was launched, making it possible for more people to travel by air. The domestic passengers carried by Air India were 12.42 million while the private carriers 54.95 million passengers. The market share of Air India remained at 18.4 per cent while for the private airlines it was 81.6 per cent.

The airlines are projected to record a collective operating profit of Rs 8,100 crore (US$ 1.29 billion) in fiscal year 2016, according to Crisil Ltd.

Aircraft movements, passengers and freight at all Indian airports are expected to grow at a rate of 4.2 per cent, 5.3 per cent and 5 per cent, respectively, for the next five years, according to estimates by Airports Authority of India (AAI).

Investment

FDI inflows in air transport (including air freight) during April 2000 to January 2015 stood at US$ 562.65 million, as per data released by Department of Industrial Policy and Promotion (DIPP).

Following are some of the major investments and developments in the Indian aviation sector:

  • Google Inc. has launched flight searches in India. “Now, you can search directly for flights within Google or access google.co.in/flights to quickly find, compare and book flights from your mobile device, tablet or desktop,” said Google.
  • Air Costa plans to add eight aircrafts before 2016 to its existing fleet of four aircrafts.
  • Boeing is planning to set up an aircraft manufacturing base in India. Once set up, it would be part of the 'Make in India' programme, under which the government wants companies to not only manufacture for India but export as well.
  • Vistara has signed inter-line agreements with Singapore Airlines and SilkAir. An inter-line agreement refers to a pact to issue and accept tickets for flights that are operated by the partner airlines.
  • Air Works India Engineering has focused on growing international business and has formed a joint venture (JV) with Yaksa Investment to provide aviation maintenance services to international airlines and domestic operators.
  • UTC Aerospace Systems has said that US Federal Aviation Administration (FAA) has approved a product developed and produced by the firm in India. With the FAA approval, UTC Aerospace Systems’ Bengaluru facility is among the first Indian entities to indigenously produce and directly ship an aviation product to aircraft manufacturers in the US.
  • Tata Group has launched its full-service Vistara airline on January 9, 2015. Vistara started on Mumbai-Ahemedabad route and plans to expand to other cities later.

Government Initiatives

Government agencies have projected that around 500 airports in all, both brownfield and greenfield, would be required by 2020. The private sector is sought to be involved in a big way through different PPP models, with substantial involvement of state support in terms of financing, concessional land allotment, tax holidays and other incentives.

Some of the major initiatives taken by the government are as follows:

  • Gujarat may get a second international airport at Dholera. The Government of Gujarat has formed Dholera International Airport Co Ltd and is obtaining approvals from the union government.
  • The Directorate-General of Civil Aviation (DGCA) has given its approval to Air India’s maintenance, repair and overhaul (MRO) unit.
  • The Government of India has decided to award airports in Kolkata, Chennai, Jaipur and Ahmedabad on management contract. The Airports Authority of India (AAI) has issued ‘Request for Qualification’ document for these four airports.
  • The Government of India plans to form a committee comprising bankers, aviation experts and technocrats to help turn around and look at privatising the national airline Air India.
  • The Ministry of Civil Aviation plans to list Airports Authority of India and Pawan Hans Ltd on the stock exchanges.
  • The Government of India has approved the construction of five budget airports to improve regional connectivity and work on them will start from FY15.

Road Ahead

There is large untapped potential for growth in the Indian aviation industry due to the fact that access to aviation is still a dream for nearly 99.5 per cent of its large population, nearly 40 per cent of which is the upwardly mobile middle class. It is critical for the industry stakeholders to engage and collaborate with the policy makers to come up with efficient and rational decisions that will shape the future of the Indian civil aviation industry. With the right policies and a relentless focus on quality, cost and passenger interest, India would be well placed to achieve its vision of becoming the third largest aviation market by 2020 and the largest by 2030.

Exchange Rate Used: INR 1 = US$ US$ 0.016 as on March 20, 2015

References: Media Reports, Press Releases, Press Information Bureau, Directorate General of Civil Aviation (DGCA)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

INDIAN AVIATION

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine


India Now Business and Economy

English

+ More Publications >

IBEF Publication

Perspectives More

Loading...
Loading blogs ...

ideas More

Ideas

Virtually Yours
Brickwork India pioneered the concept of Remote Executive Assistant and Virtual Office, a knowledge outsourcing suite of solutions and services. In the process it has set new benchmarks in the BPO industry and made the world take notice.

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password

Copyright © 2010-2015 India Brand Equity Foundation

All material, information, data, images or content on this website is subject to copyright or other applicable intellectual property laws and no part of it can be reproduced in any form (including paper or electronic form) without prior written consent and approval from IBEF. Infringements are subject to prosecution under the applicable laws. For consent related queries and conditions,
please write to info.brandindia@ibef.org

IndiaAn initiative of the Ministry of Commerce & Industry, Government of India