The civil aviation industry in India has emerged as one of the fastest growing industries in the country. Growth due to COVID came to stand-still and Industry faced debt issue. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.
India’s passenger traffic is slowly picking up and currently passenger load factor is increasing. Low cost carrier SpiceJet announced the launch of its seaplane service between Ahmedabad (Sabarmati riverfront) and the Statue of Unity in Kevadia, Gujarat. The flights will be operated by SpiceJet’s fully-owned subsidiary, Spice Shuttle using a 15-seater Twin Otter 300 aircraft, the airline adding that it has secured 18 seaplane routes under UDAN. In an attempt to connect small cities of India with each other, the Government of India launched a Regional Connectivity Scheme, Udan (Ude Desh Ka Aam Nagrik). The scheme reached its fourth stage as the aviation ministry gave nod to 78 fresh routes under UDAN 4.0 to enhance connectivity to remote and regional areas of the country. In this stage, north east states, hilly areas and islands of India have been given priority. The fresh routes will encourage tourism & local travel in these areas and help strengthen their economies.
Freight is one more vertical of this industry, the freight traffic seems to be slow but gathering pace. The government has allowed 100% FDI under the automatic route in scheduled air transport service, regional air transport service and domestic scheduled passenger airline. However, FDI over 49% would require government approval. Government introduced Krishi Udan scheme on both domestic and international routes to help farmers in transporting agricultural products and improve the product value.
Road Ahead
Lot of Scope available in this sector as huge opportunity untapped, considering that air transport is still expensive for majority of the country’s population.
India would be well placed to achieve its vision of becoming the third-largest aviation market, would push growth automatically. The growth rate of more than 10% could be seen over next 2-3 years.
BENEFICIARIES : INDIGO, SPICEJET.
