Shangliao Sun
Research expert covering India
Air transportation in India - statistics & facts
In a densely globalized economy, air transport is a key element in the country’s transport infrastructure. The Indian aviation industry has grown by leaps and bounds since the first airplane flew in February 1911. The set-up of Tata airline by J.R.D. Tata in 1932, saw the birth of the Indian aviation industry. Tata airline was later acquired by the government of India and was rechristened as Air India in the post-independence era. What was once with a fleet with one single-engine aircraft grew to over hundred aircrafts in 2022. Air India was sold by the government back to Tata Group in October 2021 for nearly 2.4 billion U.S. dollars.
With an aim to provide affordable air connectivity for the masses and boost growth of this sector, the Ministry of Civil Aviation launched the Regional Connectivity Scheme - Ude Desh ka Aam Nagrik (RCS-UDAN). This multi-billion rupee scheme provided monetary support for the development of infrastructure across tier-II and tier-III cities. This scheme not only covered airplanes, but also helicopters and seaplanes. Several routes were planned by keeping the tourism sector in focus. In October 2020, the first seaplane service was launched in the country. With airports and helipads, the country now had water aerodromes as well. SpiceJet bagged the contract for eight seaplane routes across the country.
Airports and infrastructure
There were over 400 airports and airstrips in the country. However, only around 133 of these were operational. Until 2013, the Airport Authority of India was the sole player in the development of the airports. Economic liberalization in the private sector opened this up since. The government provided a 100 percent tax exemption for a period of ten years for airport projects. Also, under the automatic route, 100 percent and 79 percent FDI was allowed for greenfield and brownfield projects respectively. Further, several unserved and underserved airports across the country were identified and operationalized under the regional connectivity scheme.With an aim to provide affordable air connectivity for the masses and boost growth of this sector, the Ministry of Civil Aviation launched the Regional Connectivity Scheme - Ude Desh ka Aam Nagrik (RCS-UDAN). This multi-billion rupee scheme provided monetary support for the development of infrastructure across tier-II and tier-III cities. This scheme not only covered airplanes, but also helicopters and seaplanes. Several routes were planned by keeping the tourism sector in focus. In October 2020, the first seaplane service was launched in the country. With airports and helipads, the country now had water aerodromes as well. SpiceJet bagged the contract for eight seaplane routes across the country.
Major players
IndiGo and Vistara were the two leading private airlines in India. After the closure of Jet Airways in 2019, they were the top two market players in the domestic segment. The Indira Gandhi International Airport in Delhi had the highest footfalls, and it handled the most international passengers in the country as well. Since 2016, the demand for aviation in the country showed robust growth in both the international and domestic sectors. This was matched by the growing capacity. However, the demand outpaced supply capacity and has resulted in high-capacity utilization. And the impact of the COVID-19 pandemic has brought all together a new set of challenges to the aviation industry.
