India aviation industry needs $30 bn for full throttle growth

Aviation - Boom - 2011

India is witnessing a boom in passenger and cargo traffic with 15% growth in passenger traffic recorded in 2010-11 at 142 mn passengers. Considering the growth in Indian economy and the need to develop aviation infrastructure, the industry requires investments worth 30 billion dollars (about Rs 135,000 crore) are required in the next 15 years, according to India Aviation Secretary, Nasim Zaidi. 


“We must have a long-term planning matched with a vibrant regulatory framework as Indian aviation has all the necessary ingredients to grow exponentially,” he said while inaugurating ASSOCHAM’s centenary conference organised to celebrate 100 years of Indian civil aviation.

Mr Zaidi said 12 greenfield airports are currently being developed as the country’s unique geographical position offers an opportunity to become a global hub for airlines. A total of 142 million passengers checked in and out of airports across the country during 2010-11, marking a growth of 15 per cent over the previous year.

State aviation secretaries will soon meet to provide inputs for toning up infrastructure. The industry also needs foreign investments to set up training institutes in various areas – especially to train air traffic controllers, said Mr Zaidi.

According to conservative estimates, passenger traffic is likely to be around 540 million by 2025 as the fleet size of scheduled airlines increases to 1,500 from 430 now. At the same time, cargo traffic is expected to touch 9 million tonnes from 2.33 million tonnes in the last financial year.

Mr Andrew Herdman, Director General of the Association of Asia Pacific Airlines, said the rebound in global aviation industry was strong in 2010 but there is caution over prospects this year as aviation fuel prices are ruling high.

The Asia Pacific aviation industry’s annual volume is pegged at 158 billion dollars with 4,712 aircraft, 684 million passengers and 18 million tonnes of cargo. The region contributed to half of 16 billion dollar profit earned by all airlines around the world.

K. Narayana Rao, chairman of ASSOCHAM’s civil aviation committee, said Indian aviation has seen a tremendous growth in the past 10 years due to government’s open sky policy, arrival of low-cost airlines and air travel becoming more affordable for middle-income people.

Amber Dubey, director at KPMG India, said the industry and the government must tackle policy and regulatory challenges. Airport charges must to come down and ground handling operations need to be streamlined so that passengers can experience world-class services.

D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM), said the Indian civil aviation industry is at an inflexion point and set to enter the next phase of growth with even greater momentum.