Aviation sector largely untapped despite growth, needs investment: economic study

The focus should be on improving the efficiency and profitability of airlines while ensuring environmental sustainability, the Economic Survey 2023-24 said on Monday. It also called for increasing airport capacity by adding more airports, as well as expanding and modernising existing facilities over the next five years. India is the third-largest domestic aviation market, which saw a 15% year-on-year increase in the number of passengers handled at its airports to 376 million in fiscal 2024. But despite this, three Indian carriers — Kingfisher Airlines, Jet Airways and Go First — have gone bankrupt in the past decade.

The Airports Authority of India plans to nearly double the number of airports to 300, driven by expectations of a significant increase in passenger traffic. Around 70 runways are earmarked for reconstruction to accommodate single-aisle aircraft such as the Airbus A320 and Boeing 737, while an additional 40 runways are earmarked for modernisation for smaller aircraft.

“Despite impressive growth in the last decade in the Indian aviation market, there is still largely untapped potential. At around 0.13 air trips per capita, current air passenger traffic is a fraction of India’s potential,” the study noted.

The study concluded that there is a need to provide long-haul connectivity from India by strengthening Indian airlines as a significant portion of international traffic from India passes through hubs in the Middle East and Southeast Asia.

The Centre is already working on a national policy for the transformation of its airports. The policy aims to develop regulations to ease security and immigration bottlenecks at airports, allocate international aviation rights and build the necessary infrastructure to enable airports like Delhi to become transit hubs competing with the likes of Dubai and Singapore.

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