TravTalk India Online Magazine
Jyotiraditya M. Scindia, Minister of Civil Aviation and Steel, Government of India, recently addressed the CAPA India Aviation Summit 2023, where he touched upon various aspects of Indian aviation industry, including its growth trajectory.
Nisha Verma
Addressing the summit, Scindia said, “Today we have crossed figures of 4.56 lakh domestic passengers in a day. India will have more than 140 million passengers in FY2024 alone. In the six years from FY2014 to FY2020 the number of domestic passengers has
more than doubled from 120 million to about 275 million at a CAGR of 14.5 per cent, and had there been no COVID outbreak, we would have reached a CAGR of about 18-20 per cent.”
He said India has a scope of exponential growth. “India is the third largest domestic market in the world in terms of seat capacity, but in terms of international seat capacity we are still ranked at 18th position. Therefore, the prospect for long-term consistent growth in the market seems very strong. India’s real GDP is expected to grow to about `252 trillion in FY2030 and GDP per capita will have increased from that of a lower middle-income country to an upper middle-income country. India is witnessing increasing urbanisation, and it is expected to increase from 34.9 per cent in 2020 to a projected 40 per cent in 2030. The disposable income of middle and high-income households is rising much faster than the national average. India is going to have one of the largest young populations in the world, which usually has a greater propensity to travel,” he said.
He also spoke about resolving supply-side challenges. “The government has been taking unprecedented steps to create capacities, remove bottlenecks and simplify processes so that the nation can have the requisite aviation infrastructure in place. The focus is to ensure that in 2047 when the nation celebrates 100 years of its independence, it has an aviation system that can support US $20 trillion economy. As part of this vision, the government has doubled the number of airports in the last 8.5 years increasing from 74 in 2014 to 148 now. Government is simplifying regulations to ensure ease of business in the sector. Policies have been liberalised to ensure adequate availability of pilots, cabin crew and engineers in the country,” he said.
He informed that to augment pilot training capacity in the long run, the government has liberalised the FTO (flight training organisation) policy, as a result of which we are seeing a proliferation of FTOs in the country. “The concept of airport royalty (revenue share payment by FTOs to AAI) has been abolished and land rentals rationalised. We currently have 35 FTOs. Nine other FTOs are coming up at five airports. Six FTO slots have been awarded by AAI at five airports, which will be operational by December 2023 (taking the number up to 50),” he said.
Scindia lauded the Aerospace Manufacturing and MRO (maintenance, repair, and overhaul) sector potential. “As part of the Make in India campaign, the government has been focussing on ensuring that India becomes an integral part of global supply chain. The launch of private manufacturing for the C-295 transport aircraft by the Airbus-Tata joint venture is a major stride towards achieving the goal of self-reliance. With Indian carriers expected to order about 1,500 to 1,700 aircraft in near future, we should work towards making India an Aerospace Manufacturing base. At the same time, we have taken steps to ensure that we develop an ecosystem for MROs for aircraft. We have reduced GST rates on MRO services from 18 per cent to 5 per cent and allowed 100 per cent FDI into the sector. I urge our MRO industry to think big, think global, and act global – the sector has a turnover of close to US $2 billion but our work is limited to 15 to 20 per cent of the market today, which we need to ensure is fully tapped into, he added.
