India is expected to become the world’s third largest aviation market by 2024.
To cater to the rapidly growing demand, airline operators have been expanding their capacity. Capacity available in India’s domestic flights, as measured by Available Seat Kilometres, stood at 155,033.4 million kms, while demand, as measured by Revenue Passenger Kilometres, stood at 136,631.4 million kms in FY19.
Domestic passenger and international passenger traffic declined at a CAGR of -9.02% and -28.64%, respectively, from FY16 to FY21, owing to COVID-19-related restrictions on flights in FY21. In FY21, airports in India pegged the domestic passenger traffic to be ~105.2 million, a 61.7% YoY decline, and international passenger traffic to be ~10.1 million, an 84.8% YoY decline, over the fiscal year ended March 31, 2020. In March 2021, the average daily passenger traffic stood at 546,702.90.
Between FY16 and FY21, freight traffic declined at a CAGR of -1.77% from 2.70 million tonnes (MT) to 2.47 MT. Freight traffic on airports in India has the potential to reach 17 MT by FY40.
Aircraft movement declined at a CAGR of -7.79% from 1.60 million in FY16 to 1.20 million in FY21. From FY16 to FY21, domestic aircraft movement decreased at a CAGR of -6.44% and international aircraft movement declined at a CAGR of -18.52%. India’s domestic and international aircraft movements reached 1,062 thousand and 135 thousand, respectively, in FY21.The expenditure of Indian travellers is expected to grow to Rs. 9.5 lakh crore (US$ 136 billion) by 2021.
As of May 2020, there were 153 operational airports in India. As of November 2019, 680 airplanes were in-service in the fleet of scheduled Indian operators. Due to rise in demand in air travel, India will need 2,380 new commercial airplanes by 2038. India is expected to have the largest number of aircrafts flying by its scheduled airlines latest by December 2019. India plans to open 100 additional airports by 2024. As on October 2019, 55 AAI (Airports Authority of India) airports were declared as single-use plastic free airport terminals.
The AAI has announced a few developments in Indian Airports—construction of a new airport on a greenfield site in Hollongi (Arunachal Pradesh) by November 2022, new integrated passenger terminal building expansion of Tiruchirappalli & Pune Airport (March 2022), Guwahati International Airport (June 2022), Maharaja Bir Bikram Airport (Early 2021) and major expansion of Surat Airport (December 2021). On May 08, 2021, AAI commenced commercial operations at Rupsi airport—Northeast India’s 15th airport and Assam’s 7th airport.
The Government of India launched regional connectivity scheme named UDAN (Ude Desh ka Aam Nagrik) to make flying affordable for common man. In February 2021, the government identified 24 routes in Assam under the first phase of UDAN 4.0. In March 2021, on the launch of the ‘Azadi Ka Amrit Mahotsav (India@75)’ by the Government of India, the Ministry of Civil Aviation (MoCA) has proposed 392 routes under the UDAN 4.1 bidding process.
AAI plans to invest Rs. 25,000 crore (US$ 3.58 billion) in next the five years to augment facilities and infrastructure at airports. It has opened the airport sector to private participation as six airports across major cities are being developed under the PPP (public private partnership) model. Investment to the tune of Rs. 42,000-45,000 crore (US$ 6-6.5 billion) is expected in India’s airport infrastructure between FY18-23. Under Union Budget 2021-22, the Indian government expanded the scope for ‘Krishi Udaan’ in convergence with Operation Green Scheme, wherein air freight subsidy of 50% for agri-perishables would be provided to North East states and 4 Himalayan states/UTs. The expansion of product-coverage will boost the ‘Krishi Udaan’ scheme and improve air cargo transportation from these states.
In April 2020, the government introduced the ‘Lifeline Udan’ flights to transport essential medical cargo to remote parts of the country to support India’s war against COVID-19. Under this scheme, about 600 flights flew more than 5 lakh kms and transported about 1,000 tons of essential cargo.
In March 2021, the government announced plan to set up two water aerodroames in Assam and four water aerodromes in Andaman & Nicobar Islands this year to boost tourism and connectivity. In March 2021, the government submitted a proposal to develop a water aerodrome project at the Ujjani Dam, under the Ministry of Civil Aviation’s UDAN-RCS (regional connectivity scheme).
According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in India’s air transport sector (including air freight) reached US$ 2.88 billion between April 2000 and December 2020.
The government is planning to start 14 more water aerodromes across the country, after the successful launch of seaplane service by Prime Minister, Mr. Narendra Modi, between the Statue of Unity near Kevadiya in Gujarat's Narmada district and Sabarmati Riverfront in Ahmedabad in October 2020.
On February 25, 2021, the Airports Authority of India (AAI) issued tenders for construction of the first phase of an international airport at Dholera in Gujarat, entailing an investment of Rs. 987 crore (US$ 135.07 million). The new facility is being set up in greenfield city under the Delhi–Mumbai Industrial Corridor (DMIC) project at Dholera.
On January 19, 2021, the Airport Authority of India (AAI) signed a concession agreement with Adani Group for three airports—Jaipur, Guwahati and Thiruvananthapuram. The concession period is 50 years from the date of commercial operations.
Click to access the Aviation Industry Archived Report
Agriculture, including its allied sector, is the largest s...
India is an agrarian economy, with ~54.6% people directly depe...
In comparison with capabilities of countries worldwide, India&...
India’s manufacturing industry has emerged as one of the...
India is one of the fastest-growing economies in the world...
India is one of the fastest-growing markets for office ...