Aviation

Summary
  • The global revenue for commercial airlines in 2019 was estimated at USD 838 Bn.1
  • India has 91 international carriers out of which 5 are domestically owned. India has air connectivity with 59 countries through 344 routes.2
  • With the industry’s USD 30 Bn contributions to India’s GDP, the domestic aviation market is projected to rank 3rd globally by 2024.3
  • Air traffic has been growing rapidly in the country as compared to the global average. One hundred more airports would be developed by 2024 to support the Udaan scheme. It is expected that the air fleet number shall go up from the present 600 to 1200 during this time.4
  • Ministry of Civil Aviation issued 170 Drone Acknowledgement number in the month of May 2021.
  • India has the potential to be global drone hub by 2030.
Reasons to Invest
  • Cabinet Committee on Economic Affairs has approved the extension of time and scope for revival and development of unserved and under-served airstrips with USD 643 Mn budgetary support.5
  • Greater focus on infrastructure development such as Open Sky Policy and Airports Authority of India’s (AAI) drive for modernization of airports and air navigation systems.
  • 1000 new aircraft have been estimated to be added to the Indian civil aviation sector.
  • Skill India Mission has a clear focus to leverage India's human capital potential and create job opportunities.
  • Innovation and Technology –
    • GPS-Aided Geo Augmented Navigation (GAGAN) is India's first Satellite-based Augmentation System. It provides additional accuracy for safety in civil aviation and has expansion capability for seamless navigation services across geographies.
    • No Objection Certificate Application System (NOCAS) streamlines the online process of timely NOC for height clearances of buildings around airports.
  • Airports - 3 AAI airports awarded on PPP Three airports viz. Ahmedabad, Lucknow and Mangalore of the Airports Authority of India (AAI) have been awarded to a private concessionaire through Public-Private Partnership (PPP) to bring efficiency in delivery, expertise, enterprise and professionalism apart from harnessing the needed investments in the public sector. Action completed.6
  • Tallest ATC tower Delhi Air Traffic Service Complex (DATS Complex) - country’s tallest Air Traffic Control tower has been inaugurated on 02.09.2019 at the Indira Gandhi International Airport. This iconic infrastructure will ensure up-scaled services and systems for efficient, smooth and uninterrupted air traffic management. Action completed.
  • Digital initiatives
    • eGCA - The function & process of Directorate General of Civil Aviation (DGCA) is being moved to an online platform to provide faster delivery of services & regulation oversight. The e-GCA was initiated on 14th May 2019. The first module on pilot licensing shall be launched in November 2019.
    • DigiSky - Pursuant to the issuance of CAR by DGCA on 27.08.2018, DigiSky online portal has been launched to meet the requirement laid down by the CAR for flying Civil Drones. The Beta version of DigiSky is available and captures the entire gamut of activities relating to drones viz. registration of drones and pilots, approval of flight path, post-flight analysis etc. based on the distinctive features of No Permission No Takeoff (NPNT).
    • e-sahaj - 100% of security clearances pertaining to the Ministry have been made online on e-sahaj online portal launched by the Ministry of Civil Aviation. The portal is operational for granting clearances in respect of 24 categories.
    • DigiYatra - Trial for the rollout of DigiYatra initiative has been started at Bangalore and Hyderabad airports. The initiative envisages seamless and hassle-free passenger travel using biometric technologies to improve passenger experience, reduce queue waiting time as passengers can walk through gates by using advanced security solutions. It will remove redundancies at checkpoints and enhance resource utilization.
  • The security component of ASF rationalized - Passenger Service Fee (PSF) now called Aviation Security Fee (ASF) charged as part of passenger fare and collected by the airlines which is deposited in the escrow account of respective JVs or AAI account has been rationalized and a National Trust has been created to pool all the ASF collections across airports. The trust is to be managed by AAI. The collection of PSF(SC)/ASF in a single pool account will serve the purpose of cross-subsidizing the smaller airports of AAI with low PSF(SC)/ASF collection thus bridging the funding gap.
  • Till July 2021, 359 routes and 59 airports including 5 heliports and 2 Water Aerodromes have been operationalized under the UDAN scheme.
  • AAI has embarked upon the development and expansion of airports in the country at a cost of INR 20,000 Crore in the next 4-5 years in order to meet the growing passenger demand in the country.
Recent Announcements

20th October 2021: PM inaugurates Kushinagar International Airport aimed for direct air connectivity with South Asian countries to facilitate tourists arriving from Sri Lanka, Japan, Taiwan, South Korea.

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18th October 2021: Shri Jyotiraditya Scindia virtually flags off 6 routes expanding aerial connectivity in North East India, under the UDAN scheme

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08th October 2021: Minister  announced 18 new heli routes and 13 more heliports to provide seamless connectivity within the State of Uttarakhand. 

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08th October 2021: Minister Shri Jyotiraditya Scindia launched sectoral event and Inaugurated the new terminal building of the Jolly Grant airport & flagged off UDAN routes.

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16th September 2021: Ministry of Civil Aviation shared Incentives of INR 120 cr to be given in next 3 years under PLI scheme for drones and drone components

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Statistics
  • Freight traffic on Indian airports is expected to cross 11.4 MT by 2032.7
  • By 2024-25, India aims to develop more than 200 airports, helipads and water aerodromes in the country.
  • India is the fastest-growing aviation market and as per IATA the Country is expected to cater to 520 mn passengers by 2037.8
  • During the period of April-March 2020-21, all Indian airports taken together handled 1189.48 thousand aircraft's movements (excluding General Aviation Movements), 115.51 mn passengers and 2462.71 thousand tonnes of freight.28
  • During the month of August 2021, all operational airports (taken together) handled 137.88 thousand aircraft movements (excluding General Aviation Movements), 14.26 mn passengers and 264.51 thousand tonnes of freight.
FDI Policy
  • Airports
    • 100% FDI allowed under automatic route for both greenfields as well as brownfield projects.9
  • Air Transport Services10
    • Scheduled air transport service/ domestic scheduled passenger airline/ regional air transport service: Up to 49% allowed under the Automatic route beyond which Government approval is required.
    • Non-scheduled air transport services and helicopter services, seaplane services which require DGCA approval: 100% FDI allowed under the Automatic Route.
  • Other Services Under the Civil Aviation Sector11
    • Ground handling services, maintenance, repair and overhaul services, flying institutes, technical training institutions: 100% FDI allowed under the Automatic Route.

Read more about Foreign Direct Investment Policy in India >

Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme  for drones and drone components to catalyse super-normal growth in the upcoming drone sector.

Financial Outlay- INR 120 crore

For more details on PLI Schemes, Click Here

Sector Policy

LIFELINE UDAN24

  • UDAN (Ude Desh ka Aam Nagrik) scheme was launched to transport experts and equipment to every corner of the country (NER, hilly and island states).
  • Under Udan – Work has been initiated to connect

- 98 unserved/underserved
- 33 Helipads
- 12 Water Aerodromes

RCS- UDAN24

  • RCS-UDAN was launched to Promote air connectivity to unserved and underserved airports in Tier-II and Tier-III cities to stimulate regional growth and provide affordable air travel to the citizens.
  • The first direct flight operations between Nashik (Maharashtra) and Belgaum (Karnataka) has started under the RCS-UDAN (Regional Connectivity Scheme — Ude Desh Ka Aam Nagrik). 
  • Government has connected cities that had no mention on the aviation map of the country by starting 60 airports, and 387 routes, out of which 100 routes are awarded in North East alone, & 50 are already operational.  
  • Under UDAN Scheme more than 900 new routes have been approved, 350 routes already functional. More than 50 new airports or those which were not in service earlier, have been made operational.
  • 15 airports are operational in 2021 from only 6 in 2014 in North East Region of India.
  • 34 routes have been operationalized, awarded under round 1, 2 and 3 / Tourism RCS. These 34 RCS routes provide connectivity to 4 unserved (Jharsuguda, Mysore, Kolhapur and Jalgaon) and 4 unserved (Gwalior, Belgaum, Durgapur and Shillong) airports connecting 10 served (Raipur, Bhubaneswar, Kolkata, Bangalore, Mumbai, Hyderabad, Goa, Kochi, Rajahmundry and Vizag) airports under the scheme.
  • 59 airports including 2 water aerodromes and 5 heliports revived/operationalized under RCS-UDAN scheme
  • New RCS Airports and routes: 02 new RCS routes have been commenced in the month of July, 2021 .
  • NABH Nirman announced in 2018-19 Union Budget, aims to expand airport capacity by more than five times to handle a billion trips in a year. The expansion is planned to be funded by leveraging the balance sheet of the Airports Authority of India.13
  • Secure Application for the Internet (SAI) - Indian Army has developed “Secure Application for the Internet (SAI)” for a simple and secure messaging application.  The application supports an end to end secure voice, text and video calling services for Android platforms over the internet. The application has been vetted by CERT-in empanelled auditor and Army Cyber Group.19
  • Initiatives for Maintenance Repair and Overhaul (MRO) services:14
    • The tools and tool-kits used by the MRO have been exempted from Customs duty. The exemption shall be based on the list of tools and tool kits certified by the Directorate General of Civil Aviation (DGCA) approved Quality Managers of aircraft maintenance organisations.
    • MROs were required to provide proof of their requirements of parts or orders from their client airlines. The process for the clearance of the parts has been brought in line with that of the tool kits for one-time certification by DGCA approved Quality Managers in MROs.
    • Restriction of one year for utilization of duty-free parts has been extended to three years to enable economies of scale.
    • To allow the import of unserviceable parts by MROs for providing exchange/ advance exchange, the concerned notification has been revised to enable the advance export of serviceable parts.
    • Foreign aircraft brought to India for MRO work will be allowed to stay for the entire period of maintenance or up to 6 months. For a stay beyond 6 months, DGCA's permission will be required. 
  • India to become a hub for MRO Airframe. There is an investment of 2 hanger base/heavy maintenance facility for narrowbodies aircraft tied up at Kochi Airport by private MRO.23 

Krishi Udaan27 - Airlifting agri-produce for better value realisation for farmers:

  • The total tonnage of agri-perishables handled in the 12th month of FY 2020-21 ending on 31 March 2021 was 18,962 MT.

 

Explore Government policies/schemes in the Aviation sector >

 

Financial Support

MRO, ground handling, cargo and Aviation Turbine Fuel (ATF) infrastructure facilities collocated at an airport, including heliport licensed by DGCA, are covered under the ‘harmonised list of infrastructure’ in the National Civil Aviation Policy 2016. This makes them eligible to get the benefits offered for the infrastructure sector under the Policy. The Regional Connectivity Scheme under the Policy provides for following financial support:15

  • The revival of airstrips/ airports as No-Frills Airports at an indicative cost of USD 7.1 Mn to USD 14.3 Mn.
  • Demand-driven selection of airports/ airstrips for revival in consultation with State Governments and airlines
  • Viability Gap Funding (VGF) to airline operators
  • Reduced Service Tax on tickets (on 10% of the taxable value) for 1 year initially
  • Reduced Excise Duty at 2% on ATF picked at RCS airports.
Investment Opportunities
  • Indian carriers are projected to increase their fleet size to 1,100 aircraft by 2027.18
  • Demand for MRO facilities is increasing in India due to consistent double-digit growth in the aviation sector.
  • Investment opportunities worth USD 3 Bn in greenfield airports under PPP mode at Navi Mumbai (Maharashtra) and Mopa (Goa).
  • Development of greenfield airports – Government agencies project development of about 250 airports across the Country by 2020.16
  • For the development of the aviation industry in the North-East States, AAI plans to develop Guwahati as an inter-regional hub. It also plans to develop Agartala, Imphal and Dibrugarh as intra-regional hubs.
  • Indian airports are emulating the Special Economic Zone (SEZ) Aerotropolis model to enhance revenues. The model focuses on revenues from retail, advertising, vehicle parking, security equipment and services.

 

Explore projects to invest in Aviation sector >

Foreign Investors
  • Airbus (France)
  • Boeing International Corporation (US)
  • AirAsia (Malaysia)
  • Rolls Royce (UK)
  • Frankfurt Airport Services Worldwide (Germany)
  • Honeywell Aerospace (US)
  • Malaysia Airports Holdings Berhad (Malaysia)
  • GE Aviation (US)
  • Airports Company South Africa Global (South Africa)
  • Alcoa Fastening Systems Aerospace (US)
  • Singapore Airlines (Singapore)
  • Etihad Airways (UAE)
  • Fairfax (London)
Agencies
Key Achievements
  • ‘Mission Shakti’ was the country's first-ever Anti-Satellite (ASAT) Missile Test. On 9th November 2020, a model of Anti Satellite (A-SAT) Missile was installed inside the DRDO Bhawan premises by Hon’ble Raksha Mantri Shri Rajnath Singh.22
  • OPEN SKY POLICY FOR NON-SCHEDULED CARGO FLIGHTS TO/FROM INDIA 
    The Open Sky Policy for foreign cargo carriers promulgated vide AIC 18/1992 has been reviewed by the Government and some changes have been made with a view to ensuring fair and equal opportunity in the air cargo capacity offered by Indian registered airlines and airlines registered elsewhere. 
  • During the last five years (FY 2016-17 to FY 2020-21), an amount of Approx. INR 17,784 cr has been spent by the Government/Airports Authority of India in renovating/building airports.
  • During the period of April - June 2021-22, all Indian airports taken together handled 300.41 thousand aircraft movements (excluding General Aviation Movements), 23.43 mn passengers and 738.54 thousand tonnes of freight.
Sources
  1. “Industry Statistics Fact Sheet- December 2019,” IATA, https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet---industry-statistics/
  2. “INDIA’S AIR TRANSPORT SECTOR,” IATA, https://www.iata.org/publications/economics/Reports/India-aviation-summit-Aug18.pdf
  3. “IATA Forecast Predicts 8.2 billion Air Travelers in 2037,” IATA, https://www.iata.org/pressroom/pr/Pages/2018-10-24-02.aspx
  4. Union Budget Speech 2020-21, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf 
  5. “Regional air connectivity infrastructure gets a boost,” PIB website: Cabinet Committee on Economic Affairs (CCEA), http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1567744
  6. 100 Days of Achievement of Ministry of Civil Aviation, https://www.civilaviation.gov.in/sites/default/files/100_Days_Achievements_of_Ministry_of_Civil_Aviation_0.pdf
  7. Comprehensive Skill Gap Analysis and Future Road Map for Skill Development in Civil Aviation Sector, Ministry of Civil Aviation, https://www.civilaviation.gov.in/sites/default/files/Final%20Report%20-%209th%20March%202016.pdf
  8. “Potential and Challenges of Indian Aviation,” IATA, https://www.iata.org/pressroom/pr/Pages/2018-09-04-02.aspx
  9. “SECTOR SPECIFIC CONDITION FOR FDI,” Invest India, https://www.investindia.gov.in/foreign-direct-investment
  10. Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
  11. Consolidated FDI Policy, https://invest-india-revamp-static-files.s3.ap-south-1.amazonaws.com/2020-04/FDI%20Policy%202019%20revised_19%20April%202020.pdf
  12. “Cabinet approves leasing out six airports,” Ministry of Civil Aviation, PIB, http://pib.nic.in/PressReleseDetail.aspx?PRID=1561472
  13. “Nabh Nirman initiative announced to expand Airport Capacity,” Ministry of Finance, PIB, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1518555
  14. “MRO Facilities for Aviation Sector,” Ministry of Civil Aviation, PIB, http://pib.nic.in/newsite/PrintRelease.aspx?relid=160226
  15. “National Civil Aviation Policy 2016,” Ministry of Civil Aviation, http://www.civilaviation.gov.in/sites/default/files/Final_NCAP_2016_15-06-2016-2_1.pdf
  16. “Indian Civil Aviation Market,” Ministry of Civil Aviation, http://www.civilaviation.gov.in/sites/default/files/Final%20WINGS%202017%20flyer.pdf
  17. PIB, https://pib.gov.in/PressReleasePage.aspx?PRID=1666421
  18. PIB, https://pib.gov.in/PressReleseDetailm.aspx?PRID=1667654
  19. PIB, https://pib.gov.in/PressReleasePage.aspx?PRID=1668346
  20. Ministry of Civil Aviation, https://www.civilaviation.gov.in/sites/default/files/Monthly-Summary-Sep-2020.pdf
  21. Monthly Achievement Report, https://www.civilaviation.gov.in/sites/default/files/Monthly-Summary-Sep-2020.pdf
  22. PIB , https://www.pib.gov.in/PressReleasePage.aspx?PRID=1671442
  23. Ministry of Civil Aviation, https://www.civilaviation.gov.in/sites/default/files/Monthly_Summary%20_Oct_2020.pdf
  24. Ministry of Civil Aviation, https://www.civilaviation.gov.in/sites/default/files/PRESS_CONFERENCE_29_12_2020.pdf
  25. PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1688549
  26. Monthly Achievement Report,  https://www.civilaviation.gov.in/sites/default/files/Monthly-Summery-for-the-month-of-April-2021.pdf
  27. Monthly Achievement Report, https://www.civilaviation.gov.in/sites/default/files/Monthy-Summary-January-2021.pdf
  28. Monthly Achievement Report, https://www.civilaviation.gov.in/sites/default/files/Monthly-Summery-for-the-month-of-April-2021.pdf

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