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.
India’s passenger traffic stood at 341.05 million in FY20. It grew at a compound annual growth rate (CAGR) of 11.13% during FY16-FY20. Domestic passenger traffic stood at 274.50 million in FY20, growing at a CAGR of 12.91% over FY16. International passenger traffic stood at 66.54 million, growing at a CAGR of 5.01% during FY16-FY20.
Freight traffic grew at a CAGR of 5.32% during FY16-FY20 from 2.70 million tonnes (MT) to 3.33 MT. Freight Traffic is expected to grow at a CAGR of 7.27% to reach 4.14 million tonnes in FY23.
Aircraft movement grew at a CAGR of 9.56% from 1.60 million in FY16 to 2.59 million in FY20. During FY16-FY20, domestic aircraft movement increased at a CAGR of 9.83% and international aircraft movement expanded at a CAGR of 3.57%. India’s domestic and international aircraft movements grew to reach 2,155 thousand and 433 thousand during FY20, respectively.
The expenditure of Indian travellers is expected to grow to Rs. 9.5 lakh crore (US$ 136 billion) by 2021.
As of December 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).
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.
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.
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, Shri. 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.
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