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Sunrise on the Civil Aviation Horizon

As India leaps towards becoming the world’s fastest growing economy, it is also set to clinch the tag of no. 1 domestic aviation market in the near future

Post by on Friday, June 10, 2022

First slide

When India’s first commercial flight took off in 1911 within Allahabad, little had the world hoped for any remarkable uptake of this sector in a price-sensitive, nascent market like India. However, over time, the rising Indian middle class embraced this mode of transport, and thus, with economies of scale kicking in, fares dipped. This defined the Indian civil aviation growth story until 2016.

In the year 2016, this sector saw a tectonic change take place. The gates of airports opened up for first-time fliers, mostly those who wore “hawai chappals” i.e. India’s poor to lower middle-class population. No, this trend wasn’t restricted to those residing only in the cities. Small no-frills airports sprouted in places like Darbhanga, Jharsuguda and Kishangarh that earlier didn’t have a single trace on India’s aviation map. Both Darbhanga and Jharsuguda have catered to 5.75 lakh passengers and 2.4 lakh passengers respectively in the last one year.

This is the change that Prime Minister Modi’s leadership has ushered in under the umbrella vision of making policies that actually benefit those in the lowest rungs of the society. The advent of democratisation of air travel in 2016 through the UDAN scheme, and the recent Heli-Policy, has been one of the two biggest achievements of this government in civil aviation so far. With over 67 airports, including India’s first-ever water aerodromes operationalised in the last 8 years (in comparison to 74 airports in 70 years), over 9 million passengers have traveled via UDAN flights over 419 new routes –routes that were off the civil aviation radar till 2014.

This democratisation in no way meant any compromise with regard to growth of the airline industry. Domestic annual passenger traffic grew from 60 million passengers in 2013-14 to 141 million passengers in 2019-20, and is expected to touch 400 million by 2023-24. A sector that was marred by high costs and overregulation had only made it hard for companies to enter this sector, and even harder to sustain. Half a dozen airlines went belly-up between 2005 and 2013. Post 2014, this scenario has been turned on its head by this government’s motto of “minimum government, maximum governance”. Redundancies and inefficiencies have been nearly obliterated. Our regulators, DGCA and BCAS have taken most processes online. The government’s loss-making airline, Air India’s privatization was finally brought to a win-win conclusion this year, and going against convention, 11 new regional airlines have come up, and two new airlines are kickstarting operations soon.

This fresh bullishness in the sector is being supplemented by massive government and private investments in airport infrastructure. From 1999-2013, only three greenfield airports had been operationalised. In contrast, the last 8 years have seen 8 new greenfield airports take shape, in addition to two more this year. Going forward, even the debilitating impact of COVID-19 will not be able to deter our airport expansion plans via a massive Rs. 93,000 crore CAPEX pipeline. These will be planned in such a way that India will not only undergo an infrastructure boom, but also a connectivity boom. Direct international connectivity to the US, UK, Africa and far Europe will be encouraged by turning our major airports into aviation hubs, bringing in more wide-body aircraft and relooking at our bilateral agreements.

The second tectonic change has been in the form of a new “whole-of-government approach” in this sector, which has now put the spotlight onto the entire aviation ecosystem. Hitherto unexplored allied sectors such as Flying Training Organisations, drones, air cargo, MRO, aircraft leasing etc. are now being seen from the lens of massive economic and employment potential. Liberalized policies like the New Drone Rules 2021, new FTO Policy, new MRO Policy, along with appropriate incentivisation have together, laid the runway for these industries to take shape in India. Each of these sectors will be critical in enabling civil aviation and tourism to become the new growth engines for India. Drones, in particular, have kick-started a revolution in India, thanks to the Prime minister’s vision of making India a world leader in drones. Buoyed by the momentum, E-VTOLs too, shall hit the Indian skies, and transform short distance air travel in the days to come.

The foundations for the next few decades of growth in civil aviation are currently being laid – new focus areas, scrapping trite policy regimes, bringing efficiencies through private participation, opening up new markets, and creating demand. As India leaps towards becoming the world’s fastest growing economy, it is also set to clinch the tag of no. 1 domestic aviation market in the near future.

 

(The Author is Union Minister of Civil Aviation)

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