March 21, 2023
The number of domestic passengers has doubled in the past six years
India is the third-largest domestic market globally and ranked 18th in international seat capacity
The number of airports in the country has doubled over the last 8.5 years, increasing from 74 in 2014 to 148 in 2023
The government is also focusing on ensuring that India becomes an integral part of the Global Supply Chains of the Aviation Industry
India’s domestic air passenger numbers is projected to reach more than 140 million for FY 2024, according to Union Minister of Civil Aviation and Steel Jyotiraditya M Scindia, at the CAPA India’s Aviation Summit 2023. He also stated that the country has already crossed figures of 4.56 lakh domestic passengers in a day.
According to the minister, the number of domestic passengers has doubled in the past six years, reaching 275 million at a CAGR of 14.5%. He further mentioned that India is the third-largest domestic market globally, and ranked 18th in international seat capacity
Government support
Media reports said that the government is taking steps to create capacities, remove bottlenecks, and simplify processes for developing aviation infrastructure to support a US$ 20 trillion economy by 2047. Scindia mentioned that the number of airports in the country has doubled over the last 8.5 years, increasing from 74 in 2014 to 148 in 2023, and the government has liberalized policies to ensure adequate availability of pilots, cabin crew, and Engineers, among others. On top of that, the country is also expected to have one of the world’s largest young populations, rising urbanization, and increasing disposable income of middle and high-income households, which have a greater propensity to travel. Therefore, the prospect for long-term consistent growth in the market seems very strong.
To increase the capacity for pilot training, the government has relaxed the Flying Training Organisation (FTO) policy. The concept of airport royalty, which required FTOs to pay a share of their revenue to AAI, has been eliminated and land rentals have been made more reasonable. Currently, there are 35 operational FTOs, and an additional 9 FTOs are scheduled to be established at 5 airports. AAI has already granted 6 FTO slots at 5 airports, which will commence operations by December 2023, extending the total number to 50.
The government is also focusing on ensuring that India becomes an integral part of the Global Supply Chains of the Aviation Industry. The launch of private manufacturing for the C-295 transport aircraft by the Airbus-Tata joint venture is an important step towards achieving the goal of self-reliance. The government has also taken measures to ensure that India develops an ecosystem for Maintenance, Repair, and Operations (MROs) for aircraft, with a reduced GST rate of 5% and 100% FDI into the sector.
Drones
Regarding the drone industry in India, Scindia mentioned that its projected growth from INR 2900 crore in 2020 will reach about INR 77,300 Crore in 2025 at a CAGR of 80%. It is further expected to reach up to INR 2.95 trillion by 2030. The industry can employ close to 300,000 people in manufacturing and drone flying.
Source: Economic Times