India’s aviation market is expected to be world’s third largest by the year 2024. The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last few financial years. India is now the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.
As of the year 2020, India has 153 operational airports. India is planning to increase the number of operational airports to 190-200 by FY40. The rising demand in the sector has pushed the number of airplanes operating in the sector. The number of airplanes is expected to reach 1,100 planes by 2027.Market Size
- India’s air passenger traffic stood at 341.05 million in FY20. It grew at a compound annual growth rate (CAGR) of 11.13% during FY16-FY20.
- Domestic passenger traffic stood at 274.50 million in FY20, growing at a CAGR of 12.91% over FY16.
- International passenger traffic stood at 66.54 million, growing at a CAGR of 5.01% during FY16-FY20.
- Freight traffic grew at a CAGR of 5.32% during FY16-FY20 from 2.70 million tonnes (MT) to 3.33 MT. Freight Traffic is expected to grow at a CAGR of 7.27% to reach 4.14 MT in FY23.
- Aircraft movement grew at a CAGR of 9.56% from 1.60 million in FY16 to 2.59 million in FY20. During FY16-FY20, domestic aircraft movement increased at a CAGR of 9.83% and international aircraft movement expanded at a CAGR of 3.57%.
- India’s domestic and international aircraft movements grew to reach 2,155 thousand and 433 thousand during FY20, respectively.
According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in India’s air transport sector reached US$ 2.88 billion between April 2000 and December 2020.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. Industry Forecast
India’s aviation industry is expected to witness Rs. 35,000 crore (US$ 4.99 billion) investment in the next four years. The Indian Government is planning to invest US$ 1.83 billion for development of airport infrastructure along with aviation navigation services by 2026.