Poised for takeoff, aviation should be accessible for masses

Sushma Ramachandran

Senior Financial Journalist

INDIA is clearly the next big thing in the global aviation industry. The two leading domestic carriers, Indigo and Air India, have made a splash by placing historic orders for new aircraft with Airbus and Boeing. The growth of passengers travelling by air is expected to grow the fastest in Asia over the next decade, with the Indian market being one of the major drivers. International airlines are vying to expand operations into this country in a bid to grab a piece of the expanding pie of passenger traffic.

The euphoria over the huge orders has made it appear as if India is all set to dominate the international aviation sector. It is humbling, however, to take a step back and view the aviation industry from a global perspective. First, the number of planes booked by Air India and Indigo have certainly emerged as the largest single orders ever placed: 970 aircraft worth $120 billion booked over the last few months.

Yet, in comparison to the airlines of developed markets like the US, the fleet size of the Indian carriers looks like a pygmy. The number of commercial planes here has risen from 400 in 2014 to about 700 currently. In contrast, the American Airlines alone has a fleet of 1,500 planes, while the total commercial aircraft in the US are estimated at 7,000. In other words, the domestic aviation sector has a long way to go before it can truly compete with the developed countries.

Second, the number of passengers travelling by air is extremely low compared to other modes of transport. The Air Deccan founder, Capt GR Gopinath (retd), maintains that out of the roughly 280 million air travellers annually, only about 40 million are actual flyers as the same persons travel multiple times during the year. His estimate is that a mere 3 per cent of the population is travelling by air. As against this, studies have shown that about 76 per cent of the travellers opt for the rail as the most convenient and cheapest mode of transport over long distances. Data on the Railways’ websites also states that the train system carries as many as 8.1 billion passengers annually.

On the other hand, a recent study on air travellers in the US by the Airlines for America in 2022 showed that 44 per cent of the Americans flew commercially and almost 90 per cent had taken a commercial flight in their lifetime.

Comparisons are odious and an emerging economy like India cannot be expected to match the levels achieved by the most developed one in the world. Still, one needs to view the current rapid expansion in the aviation sector in a broader international context. This shows that India has a long way to go in terms of expanding the accessibility of air travel for the masses.

It was precisely to achieve this objective that the UDAN regional connectivity scheme was rolled out in 2016. The declared aim was to make air travel more affordable for the common man. It went through many hiccups and the fifth round of bidding for routes by the airlines has revised many of the terms. So far, the scheme has progressed in a halting manner, though it has certainly brought many tier 2 and tier 3 towns onto the country’s air map. For instance, state capitals in the North-East, like Itanagar, are now accessible by air. Yet, it has not been able to solve the issue of making air travel cheap enough for the middle-class traveller and at the same time, provide sufficient profits for the carrier. The result is that some airlines have dropped out of the programme for various reasons, including poor returns on investment, while others like Indigo are limiting their involvement to destinations that have potential for growth.

The UDAN scheme has not achieved all its goals but has laid the groundwork for the future. Rising affluence in smaller towns is bound to lead to a demand for easier accessibility via air travel and the plan to develop more airstrips will help in meeting these needs in the coming years.

Despite the slow expansion of air travel to smaller cities, the Indian aviation industry remains on a high growth path. It is currently the third largest domestic air passenger market in the world. Annual growth is projected to be 7 per cent till 2040, making it the fastest expanding aviation market globally.

One factor that could speed up developments is the latest indication by Boeing representatives that the company will consider having a final assembly line for manufacturing in India. This would increase domestic sourcing for aircraft manufacture that is currently in the region of $1 billion annually.

While this is all to the good, the domestic aviation industry continues to face many challenges. One is the lack of adequate infrastructure, including airports and runways. Travellers are already facing issues of congestion and delays at major airports which have the maximum traffic. Civil Aviation Minister Jyotiraditya Scindia had to visit the Capital’s airport last December to deal with acute congestion, which had clearly taken the airport management by surprise.

One big problem is the need for elaborate security measures in a country that has to be cautious in this regard, given the threat of global terrorism. Airport managements need to ensure that security infrastructure provided by government agencies is aligned with passenger needs. Adequate space should also be provided while constructing airports to ensure there is enough room for security agencies to carry out their designated roles.

The other major lacuna right now is the shortage of runways at major airports. Congestion means not only flight delays but also excess use of fuel in circling airports till the final landing. Other infrastructure issues include the need to expand the maintenance, repair and overhaul sector as currently most of this work is done overseas.

The Indian aviation industry is poised for a takeoff, but much will depend on the pace at which infrastructure matches the pace of growth in passenger traffic. Greater efforts also need to be made by both the government and airlines to bring the ease of air travel to millions living in smaller towns and remote areas. Air travel must cease to become an elite mode of transport and become accessible to the masses, especially for traversing long distances.

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