Having weathered the pandemic and geopolitical storms, the aviation industry is now on a steady path of growth. There have been several notable developments in the sector over the past few years, including the launch of a new airline, privatisation of airports, and the launch of a drone policy. In a free-wheeling interview with Indian Infrastructure, Usha Padhee, additional secretary, Ministry of Civil Aviation, talked on a range of subjects – airport infrastructure expansion, privatisation, regional connectivity, drones and digitalisation. She also commented on key government initiatives, priority areas and the outlook for the sector. Excerpts from the interview…
What have been the key initiatives and achievements of the ministry during the past year?
The aviation scenario has changed significantly in recent years. The sector has witnessed almost double-digit growth. With aviation turbine fuel prices falling, scheduled commercial airlines have started performing well.
There is exponential growth taking place in the aviation sector. At present, around 141 airports are operational across the country and the number is expected to increase to 220 by 2024-25. There are around 700 aircraft, and the number is expected to increase to around 1,000 in the coming years. Both the Airports Authority of India and private players are investing in the sector. Around Rs 1 trillion is planned to be spent for the development of airport infrastructure. This includes the expansion of terminal buildings, provision of navigational facilities and development of greenfield airports. Thus, the aviation sector is performing well and continuous investments are being made in it. With the introduction of PM Gati Shakti, multimodal connectivity is being improved. If a new airport is constructed, road, railway and metro connectivity will be provided.
There is a lot of focus on regional connectivity, the aim being that every citizen gets the opportunity to travel by air. The Regional Connectivity Scheme – UdeDesh ka AamNaagrik (UDAN) – is playing an important role in this. Other key initiatives include improving cargo facilities and strengthening the maintenance, repair and overhaul business to make India a transportation hub.
The Indian aviation industry will become the third largest market in the world in the next few years. Traffic at metro airports is rising rapidly and it is also increasing considerably at non-metro airports. Currently, the penetration of air travel in Tier II and III cities is modest, at about 3-4 per cent. With rising income levels, there is huge potential for air travel growth in these cities.
How has been the experience with airport privatisation? What are the future targets?
A robust privatisation framework exists in the aviation sector. The privatisation of Air India is a big achievement. The leasing of six airports – Ahmedabad, Jaipur, Lucknow, Thiruvananthapuram, Mangaluru and Guwahati – has also been a significant step. The government is planning to lease out more airports. This would allow the government to leverage more funds for investment. Funds generated can be further used for airport infrastructure creation. Currently, due to risks involved in land acquisition, environmental clearances, etc., investors are more interested in acquiring revenue-generating brownfield airports than greenfield ones. So, leasing out a built asset could be a strategy to create infrastructure to monetise the same in future.
What are the emerging technology trends in the aviation sector?
Airports and airlines are both extensively using technology and digitalisation to make traveling efficient and smoother for passengers. Before Covid-19, passengers had to stand in queues to check in, and it was a tedious process. Now things have changed with online check-in systems in place. Almost 90 per cent of check-ins are done online. DigiYatra is also going to make passenger travel seamless and efficient. In sum, technology is an integral part of aviation and is going to make services more efficient. In future, technology in the aircraft itself can be changed and vertical take-off and eVTOL may become realities.
Drones are another area of interest. Drones are versatile. Some global cities have drone-ports. Drones are being used to transport medicines to the remote regions of the country and also to measure village land for the SVAMITVA Scheme. Initially, when drones were launched, there were many apprehensions regardomh security. Now, the production-linked incentive (PLI) scheme has been extended to drone manufacturing. So, with the startup ecosystem, the PLI scheme and the information technology system, India has the potential to become a global leader in the drone industry.
What are the key challenges that need immediate attention? What are the steps being taken to address these?
Some of the issues concern small aircraft operators. There are a few small aircraft operators that are operating commercially. Most of them are attached to corporates. They are not available for charter or commuter operations. We have about 700 aircraft for scheduled operations, whereas there are only 100-120 small aircraft. Countries such as Brazil have an ecosystem where bigger airlines get skilled pilots/crew from the small aircraft environment. This is not the case here. We need to enhance the number of small aircraft. For healthy growth of aviation, a broad-based small aircraft fleet is needed to support the ecosystem for commercial/scheduled aircraft operations.
What are the key focus areas and priorities for the ministry for 2022-23?
Enhancing connectivity, monetising of airport infrastructure, building new generation aviation infrastructure, proliferating drones, constructing air transport hubs, etc. are few priorities of the sector.
There is also a need to increase long-haul flights. The Ministry of Civil Aviation is working towards creating an ecosystem with a fractional ownership policy to promote small aircraft operations. The Ministry of Civil Aviation has also released “Small Aircraft Scheme” under UDAN, which will provide incentives to small aircraft operators including helicopter/seaplane operators. This will provide better connectivity to the Northeast.
What is the outlook for the sector over the next one to two years?
Overall, the outlook for Indian aviation looks promising. Aviation growth can be exponential in India. Aviation will be an important component of improving the ease of living. Going forward, demand for air travel will increase with the rising disposable income of the middle class. The need of the hour is to improve regional connectivity, increase long-haul flights, deepen the penetration of air travel, which is currently about 4 per cent, and expand aviation infrastructure.
India is poised to be developed as a hub for passengers and cargo. It is expected that growth in the western countries is going to be minimal and the Indo-Pacific region, South Africa and South America will generate demand for air transportation. There is an immediate need to ensure investments in airport infrastructure and deepen air connectivity for both domestic and international travel. Indian aviation will be a robust growth engine and will contribute to India achieving its goal of becoming a $5 trillion economy.