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Airports: March 2013

March, 2013

India's civil aviation market is set to become the world’s third largest by 2020.

International passenger traffic posted a compound annual growth rate (CAGR) of 10.5 per cent over FY06-12 and is set to touch 60 million by FY17. Domestic passenger traffic expanded at a CAGR of 15.7 per cent over FY06-12 and is expected to reach 209 million by FY17. Moreover, the total freight traffic registered a CAGR of 8.3 per cent over FY06-12; it stood at 2.26 million tonnes (MT) in FY12. Over FY07-12, India’s exports expanded at a CAGR of 20.6 per cent. Growing trade augurs well for airports as they handle about 30 per cent of India's total trade (by value).

More Indians are travelling by air due to rise in per-capita income and introduction of low cost airlines. The increasing growth in the sector is accentuating demand for maintenance, repair and overhaul (MRO) facilities. By 2020, MRO industry is likely to touch US$ 1.5 billion.

The Government of India (GOI) has allowed 100 per cent foreign direct investment (FDI) under automatic route for Greenfield projects. 100 per cent FDI for existing airports is also possible with an approval from foreign investment promotion board (FIPB). The government envisions airport infrastructure investment of US$11.4 billion under the 12th Five Year Plan (2012-17).

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