Scindia: How India aims to have lion share in sky

For the first time since the outbreak of Covid-19 in 2020, India has opened its air space for international travel, mounting at least 150 new domestic and international routes in the summer schedule. Apart from the aviation industry that is now returning to black, fliers too are heaving a sigh of relief after an embittering two-year hiatus. Aircraft that stayed put at aprons for months have begun to take off. Greenshoots all around Two airlines registered profits in the previous quarter, and two new airlines are gearing up to emerge in the Indian skies. India’s daily passenger traffic (3.5 lakh) is nearing pre-Covid levels (4.1 lakh). Even going forward, the numbers point to an upward trajectory for the sector. From domestic passenger traffic of 34.5 crore in 2018-19, which fell to 11.5 crore during the pandemic period, the rebound is likely to be a sharp one – raising annual traffic to more than 40 crore by 2023-24. These numbers weave a powerful story of a sector that despite having faced a volley of heavy blows continues to soldier on. The ongoing resistance, and the simultaneous, newly-paved path that leads towards India becoming the No 1 aviation market globally, is indeed a piece from the Indian economy’s splendid recovery. In fact, since 2014 our economy has seen a quantum jump on the back of strong priority-setting, bold decision-making and execution by Prime Minister Narendra Modi. The number of airports in India has risen from 74 till pre-2014 to 140 till 2021, and is further set to reach 220 by 2025. With a massive Rs 93,000 crore capex pipeline, India will witness a bout of both greenfield and brownfield airports in the next 2-3 years. To match the growth in infrastructure, our aircraft fleet is also likely to grow from 710 today, by 110-120 every year, as well as expand the share of wide-body aircraft for greater long-haul connectivity. The consequent spurt in requirement for pilots will be met by an increase in Flying Training Organisations from the current 34 to 43 by this year’s end, and 58 in the near future. But this is not just a story of numbers. Civil aviation has become a vehicle of economic change in some of the most remote cities of India, where air travel was once a pipe dream. Since 2017, over 91 lakh people have travelled by air – most for the first time in their lives, thanks to the PM’s clarion call of Ude Desh Ka Aam Nagrik. Penetration of air connectivity has opened up new growth avenues for places such as Jharsuguda, Odisha, where the airport handles an average 2.4 lakh passengers per year. Tied with this vision, India is set to witness deeper democratisation of air travel, and thus, greater proliferation of tier-2/tier-3 level airports in the near future. Allied sectors rise too Aviation has also assumed a broader meaning today, where hitherto neglected allied sectors such as air cargo have been brought into the spotlight through growth-oriented policies. Naturally, the sector saw exponential growth, especially during the pandemic period, where in a short span of two years, India’s share in international cargo traffic movement went up from 1.8% to 19%. Similarly, the drone sector has witnessed a series of serious reforms that will catapult it into a future sunrise sector for India. In a few years, drones will pervade almost every sector, bringing huge economic dividends, along with an explosion of startups and skilled manpower. Having learnt from the last two years, we now have a bigger task ahead of us: to make civil aviation resilient to disruptions in the future. The challenges that have festered for long were heightened by the pandemic, and now by the ongoing geopolitical disturbances. Building resilience: Rationalising ATF Air Turbine Fuel, which attracts the highest taxes in India when compared with the rest of the world, now costs twice as much as the pre-Covid-19 rates. Given that the industry is highly elastic to price change, even a minor rise in air fares could impact air travel demand in the short term. However, we have seen our Union and some state governments acting swiftly on taxation regimes at the domestic front. We have been able to achieve considerable progress with 12 additional states and UTs having climbed onto the bandwagon of VAT on ATF rates in the bracket of 1-5%, taking the total to 24 states. Efforts are underway to bring the remaining 12 states on the side of low rates. Once the sector is nursed back to health, we need to make a bigger impact in international travel, as well as air cargo. India’s bid to become the fifth largest economy in the world by 2024 bodes well for this mission. Interestingly, this would also hold true the other way round. As India rises to claim a lion’s share in the skies, it will etch a place among the economic superpowers of the world.