The influx of foreign airlines into India can significantly benefit the aviation sector, says Jaideep Mirchandani and CSR in India

India’s international and domestic aviation sectors are expected to receive a significant boost in the coming months as several foreign airlines expand their networks in the country. According to news reports, Air Canada is expected to increase its seat capacity by 40 per cent starting in October, while Etihad Airways is launching services from Abu Dhabi to Jaipur, its 11th destination in India. Additionally, Sri Lankan Airlines, which operates 95 weekly flights from nine Indian cities, has announced plans to increase the frequency of its flights from these cities and add new locations to its network. Japan Airlines (JAL) has signed a code-sharing partnership with Indigo, offering more travel options between the two countries to enhance connectivity.

Currently, India is the world’s third-largest domestic aviation market. Various studies predict that by 2024-25, the country will overtake the UK to become the world’s third-largest passenger market. Aviation experts believe that the extensive network expansion plans of foreign carriers are evidence of growing confidence in the enormous growth potential of the civil aviation sector in India. They also believe that it will catalyze further economic growth, spur infrastructure development and promote the country’s development.

“Expanding the network will make air travel more accessible and affordable for passengers. It will improve connectivity to new destinations and provide significant economic and social benefits by promoting tourism and commercial activities. Moreover, by creating jobs and supporting remote communities, it will help the country meet the increase in demand, especially during peak seasons,” says Jaideep Mirchandani, CEO of Sky One, a major air carrier.

He also highlighted that the proposed codeshare plans will strengthen domestic aviation in the country. “Codeshare will enable airlines to book passengers on partner carriers, providing travel to destinations where they are not currently present. This will help them offer customers more travel options, enhance their service offerings, open new domestic and international networks, and foster socio-economic growth and spread across the country,” Mr. Mirchandani said.

The national network expansion could also help strengthen the Government’s Regional Communications Program (RCS-UDAN), whose main goal is to provide access to air travel to isolated communities and promote economic development in rural areas. “Another key perspective is the development of the maintenance, repair and overhaul (MRO) sector. In line with the growth of the aviation sector, it will provide strategic investors, original equipment manufacturers (OEMs) and leading global MRO players with more investment opportunities in the Indian MRO segment,” Mr. Mirchandani added.

He also stressed the need for policy decisions that would create favorable conditions for both foreign and Indian airlines. For example, the Directorate General of GST announced the imposition of GST on services provided by the headquarters of foreign airlines to their Indian branches. The International Air Transport Association (IATA) has already opposed the move.

Mirchandani believes that such steps could significantly increase the operating costs of foreign airlines in India and affect their expansion plans. He concluded by saying, “I hope the regulators will take an appropriate decision on this matter which will benefit both Indian and foreign carriers.”