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Air passenger traffic to grow sixfold by 2040: Report

Livemint:  January 16, 2019

Mumbai: India’s air passenger traffic is expected to grow sixfold to 1.1 billion per year by 2040, according to the Vision 2040 report for the civil aviation industry released on Tuesday at the government-backed Global Aviation Summit 2019.

The Indian commercial air fleet is expected to be 2,359 by March 2040, says the report prepared by consultancy firm KPMG and industry body Federation of Indian Chambers of Commerce and Industry. India is also expected to have 190-200 operational airports by 2040, with Delhi and Mumbai having three airports each, it says.

India may consider investments of up to $2 billion for low traffic airports, excluding land acquisition costs, the report says. It also recommends that a strong leasing industry for financing of aircraft and maintenance, repair and overhaul, be established in India to prevent domestic airlines from going abroad for the facilities.

The Vision 2040 report was prepared in consultation with the government though it was not commissioned by it, said aviation secretary R.N. Choubey. “We didn’t commission the report as we wanted suggestions from the industry,” he said. The government will deliberate on the suggestions and take a call on which ones to implement, Choubey said.

Aviation minister Suresh Prabhu said the report will address the immediate challenges of the aviation sector. “We are working on getting aircraft financing and maintenance, repair and overhaul (MRO) industry in India, which will also increase jobs in the country,” Prabhu said. At present, most airlines go abroad for MRO services and for raising capital to finance aircraft purchases.

Four of the five engine issues related to the Pratt and Whitney engines on Airbus 320neo planes have been resolved, while the fifth issue, that of the gearbox, is being addressed, said minister of state for aviation Jayant Sinha.

Domestic airlines such as IndiGo (InterGlobe Aviation Ltd) and GoAir have had several flights grounded over the last few months because of glitches in the Pratt and Whitney engine. “The director general of civil aviation is expected to issue further directives regarding this shortly,” Sinha said.

The Centre also proposed amendments to the draft drone policy, including allowing drones beyond visual line of sight. The amendment also proposes the use of algorithm to pilot drones, and a dedicated drone corridor, besides creating drone ports for landing and taking off. It also bats for 100% foreign direct investment in drone manufacturing.

Meanwhile, Qatar Airways’s group chief executive officer Akbar Al Bakr said on the sidelines of the event that the airline is in talks with IndiGo and GoAir for code share opportunities.

International Air Transport Association (IATA) expects India to become the third-largest aviation market worldwide in the next decade, it said in a report released at the summit.

“The fundamental drivers of air passenger demand, including population and demographics and increasing incomes, are favourable and supportive of ongoing growth over the longer-term,” the report said.

The aviation industry in India is not yet on a sound financial footing and this remains a work-in-progress for the industry and its key stakeholders, including policymakers, it said.

“While the industry has demonstrated resilience in the face of various shocks and disruption, including the global financial crisis and airline exits, financial stability is a key factor for the industry to be able to successfully develop and grow,” according to the IATA report.

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