Civil Aviation in India

 

  • The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years.
    • India has become the third largest domestic aviation market in the world
  • Growth
    • Rising working group and widening middle class demography is expected to boost demand
    • Also, India is expected to overtake UK to become the third largest air passenger* market by 2024
    • India is expected to overtake China and the United States as the world’s third-largest air passenger market in the next ten years, by 2030, according to the International Air Transport Association (IATA)
  • Challenges faced by the aviation Industry in India
    • Shortage of trained employee
      • There is a shortage of trained and skilled manpower in the aviation sector because of which there is cut-throat competition for employees which, thereby is driving wages to unsustainable levels
    • Regional connectivity
      • Though there are a large number of airlines operating, still there exists lack regional connectivity
      • Providing regional connectivity is one of the greatest challenges for the Aviation sector in India. This is due to lack of airports and other associated infrastructure
    • Rising fuel prices
      • The jet fuel cost accounted for nearly 45% to 50% of the total costs in 2018; thereby presenting more operational challenges
    • Declining yields
      • Pricing and yield are the key elements for an airline to operate
      • Commercial liberalization has led to intense competition and reduction in real yields for Airline companies
    • Gaps in Infrastructure
      • Airport infrastructure and Air Traffic Control (ATC) foundation are insufficient to help development
      • While a beginning has been made to redesign the infrastructure, the outcomes will be visible after some years.
    • Technical Challenges
      • The maintenance, Repair, and Overhaul (MRO) industry is not well developed in India; to provide for cost-effective maintenance of Aircrafts
      • The lack of native Aircraft manufacturing base, results in more imports of Aircrafts, thereby making the operations more Capital Intensive
    • Major initiatives to improve Civil Aviation Infrastructure in India
      • 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
      • The Ministry of Civil Aviation (MoCA) is hopeful that aspiring commercial pilots will soon be able to get trained in India without having to leave the country.
        • In this regard, the government in July 2021 announced setting up eight new flying academies across the following five airports: Belagavi and Kalaburagi in Karnataka, Jalgaon in Maharashtra, Khajuraho in Madhya Pradesh, and Lilabari in Assam