7 Months agoIndia is the 9th largest aviation market in the world with a size of around US$ 16 billion.
India is the 9th largest aviation market in the world with a size of around US$ 16 billion. India aviation industry carries huge growth potential due to large and growing middle class population, its rising aspirations, rapid economic growth and higher disposable incomes.
India’s aviation sector recorded the highest growth of about 20.3 % in FY 15 over FY 14, as per statistics shared by IATA (International Air Transport Association).Also India is expected to be the 3rd largest aviation market by 2020.
The Indian aviation market grew by 27.4% in 2015-16 over 2014-15 taking the total passenger throughput at 184 million,1making it the fastest-growing aviation market in the worldaccording to data released by the International Air Transport Association (IATA).
Passenger throughput is expected to reach around 370 million by 2020, with domestic traffic constituting around 80% of the total.
The Indian air transport (including air freight) attractedFDI of US$ 931 million between April 2000 and March 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).
According to the DGCA (Directorate General of Civil Aviation) and MOCA (Ministry of Civil Aviation), the Indian domestic air traffic is expected to cross 100 million passengers by 2017 from 81 million passengers in 2015. Indian domestic airlines also carried 23 million passengers in during the period of January-March 2016 as compared to 18.5 million during the same period last year. This period thereby registered a growth of 24.03%.
GOVERNMENT INITIATIVES The country aims at becoming the 3rdlargest aviation market by the year 2020. It is a vision that is fast becoming a reality due to aspects such as increasing disposable incomes, fall in prices of aircraft turbine fuel (ATF), visa reforms and subsequent increase in foreign tourist arrivals. The government has changed regulations and undertaken significant initiatives to bolster the growth of this sector.
- MoCA unveiled the Civil Aviation Policy 2016 with the mission of providing safe, secure, sustainable and affordable air travel for passengers and air transportation of cargo with access to various parts of India and the world.
- Under the National Civil Aviation Policy 2016, 5/20 rule, which stated ‘for an airline to commence international operations, it should have operated for atleast 5 years in the domestic market and should have a fleet of minimum 20 aircrafts’ is scrapped.2
- The new rule states; “all airlines can commence international operations provided that they deploy 20 aircraft or 20% of total capacity (in term of average number of seats on all departures put together), whichever is higher for domestic operations.”
- The introduction of various proposals for maintenance, repair and overhaul (MRO) operations for aircrafts in the Union Budget 2016-2017. These also include customs and excise duty exemption for tools and toolkits used in MRO works as well as simplification of import procedures.
- Plans by the Airport Authority of India (AAI) to revive and operationalise around 50 airports in India over the next ten years to improve regional and remote air connectivity.3
- Proposal for development 200 low-cost airports by 2035, along with an investment of USD 1.3 billion for upgradation/ improving of non-metro airports by 2017.
- Permitting the foreign aircraft brought into India for MRO work to now stay up to six months or as extended by aviation regulator DGCA. Such foreign aircraft would also be permitted to carry passengers on the flights at the start and end of its period of stay in India.
- Giving site clearance to Delhi Mumbai Industrial Corridor and Development Corporation (DMICDC) for setting up of a Greenfield airport for public use near Bhiwadi in Alwar district of Rajasthan and granting 'in-principle' approval to 13 other Greenfield airport projects.
1 International Air Transport Association (IATA)
2 National Civil Aviation Policy 2016
3 Airports Authority of India/ Ministry of Civil Aviation