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 is expected to overtake the UK to become the world’s third-largest aviation market by 2024. With a market size of US$ 16 billion, the country is the tenth-largest civilian aviation 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 passenger traffic (International + Domestic) during FY25 (Till December 2024) stood at 196.91 million.
During April-December 2024, the domestic passenger traffic stood at 246.7 million, registering a 8.1% increase, and international passenger traffic stood at 56.8 million, a 13.5% increase, as compared to the same period the previous year.
During April-December 2024, freight traffic stood at 2.79 MMT. Out of which, domestic freight traffic was 1,054 thousand tonnes and international freight traffic was 1,744 thousand tonnes.
Growing private sector participation through the Public-Private Partnership (PPP) model is evident, with 14 airports in India currently operated under PPP agreements.
Revenues of domestic MRO services providers in India are expected to triple by FY28, driven by a doubling aircraft fleet, government support, and ongoing MRO capex at airports, according to Crisil.
The Ministry of Civil Aviation is developing Public-private Partnership (PPP) modalities for the privatisation of 25 airports under the National Monetization Pipeline.
On December 19, 2023, ICRA reported that the Indian aviation industry is projected to see year-on-year revenue growth of 15-20% in FY24 and 10-15% in FY25. Despite healthy passenger traffic growth, the recovery in industry earnings will be gradual due to the high fixed costs.
According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in India’s air transport sector (including air freight) reached Rs. 26,787 crore (US$ 3.93 billion) between April 2000-December 2024.
The government plans to operationalize 12 new airports under the UDAN scheme this year, with an expenditure of Rs. 4,073 crore (US$ 486 million) incurred for airport development as of June 30, 2024.
Union minister of Civil Aviation and Steel, Mr. Jyotiraditya M. Scindia spearheads Airbus-Dynamatic Technologies collaboration for A220 door manufacturing in India, amplifying 'Make in India' and AatmaNirbhar Bharat missions, underlining employment growth and technological advancement in aerospace sector.
Union minister of Civil Aviation and Steel, Mr. Jyotiraditya M. Scindia inaugurates Dehradun Airport's new terminal, expanding capacity to serve 3240 passengers during peak hours and 47 Lakh annually. The terminal embodies local heritage, with columns inspired by state flower "Brahmakamal", promoting sustainability and accessibility.
In the budget 2025-26, the Ministry of Civil Aviation will get an allocation of Rs. 2,400 crore (US$ 277.3 million).
Garuda Aerospace is poised to invest Rs. 100 crore (US$ 11.6 million) to develop a 'Drone City' in Orvakal village, Andhra Pradesh. This initiative is intended to enhance drone innovation, attract skilled talent, and position India as a leader in drone technology. The announcement was made during a strategic meeting with the Minister of Civil Aviation.
Air India has established a codeshare partnership with Kenya Airways, enabling passengers to book combined journeys on a single ticket. This collaboration involves placing Air India’s 'AI' code on Kenya Airways' Nairobi-Mumbai flights and vice versa. The partnership aims to enhance travel options for passengers and strengthen Air India’s global presence.
Air India Express has launched a daily direct flight service between Mangaluru International Airport and Delhi International Airport, significantly enhancing travel convenience for passengers. The inaugural flights transported 167 passengers to Mangaluru and 144 passengers from Mangaluru, both of which were celebrated with a water cannon salute. This new service is designed to benefit travelers and improve overall connectivity.
In October 2022, Prime Minister Mr. Narendra Modi laid the foundation stone of the C-295 Aircraft Manufacturing Facility in Vadodara, Gujarat.
On 16 August 2024, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Mr. Narendra Modi, approved the Airports Authority of India's proposal to develop a New Civil Enclave at Bagdogra Airport in Siliguri, West Bengal, at an estimated cost of Rs. 1,549 crore (US$ 185.69 million), featuring a 70,390 sqm terminal designed for 3,000 Peak Hour Passengers and an annual capacity of 10 million passengers, along with a green building initiative to enhance operational efficiency and passenger experience.
Under the Regional Connectivity Scheme (RCS)-UDAN, two water aerodromes have been established and commenced operations, enhancing connectivity in remote areas.
In October 2021, the Union Minister of Civil Aviation, Mr. Jyotiraditya M. Scindia, virtually flagged off the first direct flight along the Shillong–Dibrugarh route, under the RCS-UDAN (Regional Connectivity Scheme – Ude Desh Ka Aam Naagrik) scheme.
Magellan Aerospace and Aequs have signed a Memorandum of Understanding to jointly develop an aircraft engine MRO facility in Belagavi, Karnataka, focusing on infrastructure development and cost efficiency to meet the growing demands of the civil and military aviation sectors in India.
In May 2023, Union Civil Aviation Minister Mr. Jyotiraditya Scindia said that there is a plan to invest Rs. 1 lakh crore (US$ 12 billion) in airports in the coming days.
AAI was planning to invest Rs. 25,000 crore (US$ 3.58 billion) in next the five years to augment facilities and infrastructure at airports.
During the year from 2013-14 to 2023-24, the capacity (ASK) in the domestic market grew at a rate of 7.7% (CAGR) while the demand (RPK) grew at 9.6% (CAGR) during the same period.
The government will spend about Rs. 98,000 crore (US$ 12 billion) by 2025 to boost regional connectivity.
In June 2023, Union Civil Aviation Minister Mr. Jyotiraditya Scindia said that 200-220 more airports, heliports, and water aerodromes will be built in the country over the next five years.
On July 14, 2023, the fourth runway and dual ECT (also called elevated taxiways) became operational at the Delhi airport. Indira Gandhi International Airport (IGIA) is the first airport in the country to have four runways and Eastern Cross Taxiways (ECT).
The road ahead poses strong opportunities for the aviation sector.
India’s aviation industry is largely untapped with huge growth opportunities, considering that air transport is still expensive for the majority of the country’s population, of which nearly 40% is the upwardly mobile middle class.
