India's growing civil aviation industry sees greater scope for growth

NEW DELHI, March 1 (Xinhua) -- India's aviation industry has grown by leaps and bounds over the past two-and-a-half decades, as air travel has come within the reach of the middle class, which till early 2000s was considered a luxury exclusiveness only to the rich and upper class.

Over the years, air travel has become accessible to those with an annual income bracket of roughly 8,536-14,500 U.S. dollars, i.e. the middle class, and even the next strata of Indian society down the line, the lower-middle class.

Most people belonging to the middle class are government employees who have begun opting for air-travel for family vacations while availing the Leave Travel Concession (LTC) offered by the government. Besides, practitioners in lucrative industries such as Information Technology (IT) and Telecommunications are increasingly taking to air travel instead of the traditional road or rail transport means.

This ever-expanding strata of Indians, who all the more choose flights for domestic travel, has given impetus to the consistent growth of civil aviation in the country.

According to the Indian government's data, domestic air traffic has more than doubled from around 61 million passengers in the 2013-14 financial year to around 137 million in 2019-20. International passenger traffic has jumped from 47 million in 2013-14 to around 67 million in 2019-20 with an annual growth of over 6 percent.

The number of daily domestic air passengers in India was 398,579 during pre-COVID-19 years. Whereas this year, nearly 445,000 people boarded flights on Feb. 19, the maximum number ever, said Civil Aviation Minister Jyotiraditya Scindia.

The phenomenal growth is also driven by factors including the explosive growth in IT sector accompanied with high incomes, constantly decreasing gap between train tickets and air fares for long distances, significant rise in incomes of the salaried class (particularly of government employees by way of regular pay commissions), the West's attraction towards the Indian civil aviation market, and a forward-looking civil aviation policy laid out by the Indian government, according to aviation experts.

In terms of civil aviation infrastructure, India has witnessed a marked improvement since the early 2000s, particularly over the past decade. The number of airports in the South Asian country has doubled to more than 140 in the past eight years, with Karnataka state's newest Shivamogga Airport just inaugurated on Feb. 27.

As per an estimate, India is currently the 7th largest civil aviation market in the world, and is expected to become the third-largest civil aviation market within the next decade.

Renowned civil aviation expert Harsh Vardhan told Xinhua that the robust growth of the Indian economy due to liberalisation and privatisation policies shows there is a greater scope for growth in civil aviation in the coming years, as the number of aircraft and flyers per day of India still lags behind the developed nations.

Indians' income growth over the years entails a shift in their work culture and traveling habits, encouraging them to fly instead of having prolonged travel by train or road. Meanwhile, with the cut-throat competition among the private airlines leading to low-cost flying, the paying-capacity of Indians has risen manifolds, which left a positive cumulative effect leading to an immense growth of the Indian civil aviation, said Vardhan.

Talking about the recent orders placed with Boeing and Airbus by Air India for 840 new aircraft, he said, "With the healthy competition in the aviation market up there, we can surely expect such big orders from other private airlines too. No doubt India's civil aviation industry is destined to grow at a faster pace in the years ahead."

The National Civil Aviation Policy 2016 aims to create an ecosystem to make flying affordable for the masses and witness 300 million domestic ticketing by 2022 and 500 million by 2027, and enable international ticketing to rise to 200 million by 2027. Similarly, cargo volumes should increase to 10 million tonnes by 2027.

It also aims to provide safe, secure, affordable and sustainable air travel for passengers and air transportation of cargo with access to various parts of India and the world. Besides, it plans to establish an integrated ecosystem which will lead to an significant growth of the civil aviation, which in turn will promote tourism, increase employment and lead to a balanced regional growth.

Finance Minister Nirmala Sitharaman recently allocated 31 billion Indian rupees (around 376 million U.S. dollars) for the civil aviation ministry in the Union Budget for the 2023-24 financial year (April 2023 - March 2024). "Fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity," the minister said in her Budget speech earlier this month.