India is poised to experience a massive boom in aviation, making it one of the most promising aviation markets in the world after the COVID-19 pandemic. According to aviation consultancy and research firm CAPA India, the country may need to have the capacity to handle over 1.3 billion passengers within the next two decades. This would require a commercial fleet of nearly 4,000 aircraft. To achieve this, CAPA India has outlined a roadmap for a new civil aviation policy that will deliver airline viability and growth by design.
India’s National Civil Aviation Policy, drafted in 2016, aims to establish a conducive environment that makes air travel affordable for a larger population. The policy’s targets include achieving 300 million domestic ticket sales by 2022 and 500 million by 2027, along with an increase in international ticket sales to 200 million by 2027. In financial year 2023, India’s aviation system handled just under 200 million airline passengers, while 12.9 million passengers took to the skies in India in March, according to the Directorate General of Civil Aviation.
“The country’s aviation sector has been among the fastest-growing in the world, with the Airports Council International’s long-term forecast indicating that India is expected to grow by 339 percent over 2022, reaching 1.1 billion passengers flown by 2041. Furthermore, according to the International Air Transport Association, India is expected to become the third-largest aviation market globally by 2025, after China and the U.S.“
The company’s forecast predicts a market around 20 percent larger than the U.S. prior to COVID-19, with traffic handled by Indian airports growing from the size of Las Vegas airport to the size of the entire U.S. within less than 40 years. CAPA India further predicts in an interview with Skift that if the ramp-up in scale is achieved by financial year 2043, aviation could make a $1 trillion annual contribution to the Indian economy, taking into account direct, indirect, induced, and catalytic impacts.
The proposed new policy will also help the hospitality industry in India. The expansion of the aviation sector will bring in more tourists to the country, which will increase the demand for hotels, restaurants, and other tourism-related businesses. The aviation policy will focus on developing new air routes and tourism destinations across the country, which will create more job opportunities for the locals.
The policy will help to reduce the high cost of aviation fuel in India, which attracts the highest levels of taxes in the world. The proposed new tax regime of goods and services tax (GST) will provide a level playing field for carriers, and dismantling the negative fiscal regime and infrastructure will help maximize system efficiency to enable the emergence of mega-carriers.
To achieve this, CAPA India recommends the aviation policy should plan for airport capacity where major cities like Delhi and Mumbai would need to start planning for third airports. CAPA also called for restructuring of airspace design to provide capacity for up to 8–10 times of current traffic, taking into account continued growth in overflights, general aviation, and new-age aviation like air taxis and electric vertical take-off and landing aircraft.
India’s domestic carriers have already ordered over 1,100 planes, signalling the growth potential in the aviation industry. The erstwhile national carrier Air India, now owned by Tata Group, placed an order for 470 planes with Airbus and Boeing worth $34 billion, marking the first such order in over 17 years. IndiGo, the biggest airline in India, has approximately 500 planes in its order, while the newbie airline Akasa Air has placed an order for 72 Boeing narrow-body aircraft.
By developing new air routes, increasing airport capacity, and investing in new-age aviation like air taxis and electric vertical take-off and landing aircraft, India can establish itself as a global leader in the aviation industry. As the industry takes flight, India’s economy and tourism sector are set to soar, providing exciting opportunities for both locals and visitors alike.