Growth Surge: Upswing in Indian aviation

The aviation sector has recorded remarkable growth over the past 25 years. Demand for air travel has been on an upswing, resulting in the creation of substantial airport infrastructure. Government support for the development of greenfield airports, privatisation of airports and the launch of new routes under RCS-UDAN have been noteworthy. The future focus will be on building smart, world-class airports, which will necessitate extensive use of technology and digital solutions. Top leaders from key airports share their views on the progress of the sector, the key initiatives, capacity expansion plans and future outlook…

Daniel Bircher

The Indian aviation sector has experienced significant traffic expansion lately, and this upward trajectory is anticipated to continue. The industry is also expected to benefit from a surge in aircraft orders, as airlines allocate resources towards new fleets to cater to fast-growing demand. The outlook remains positive given the ambitious growth of IndiGo, the privatisation of Air India, and the emergence of new carriers such as Akasa. The government has announced plans to build 80 to 100 new airports by 2025, constituting one of the most advanced airport expansion and privatisation programmes in the world.

This is an exciting period for the Indian aviation sector, with many opportunities for growth and innovation. Compared to other aviation markets of similar (large) size, the trips per capita in India are still low and there is im­mense scope for growth here.

Focus on technology

The Noida International Airport (NIA) will combine Indian design and hospitality with Swiss technology and efficiency to design a customer-fi­rst, congestion-free environment. We are building a digital airport in India, enabling fast, safe and accurate movement of baggage; contactless biometric journey with short-walking distances; as well as personalised services for fa­milies/elderly folk and business travellers.

Our state-of-the-art data platform (NIA Bri­dge) enables data-driven decision-making by collating and making sense of data. Addi­tion­a­lly, our Digital Experience Platform (DXP) ensures an end-to-end digital experience at NIA. The future-proof platform ensures that NIA re­aches its guests at all digital touchpoints and can always provide the right information such as flight information, wayfinding, F&B opening times and much more. DXP combines an excellent website with a chatbot, an interactive map and much more. In addition, DXP will also offer e-commerce services soon. In combination with NIA Bridge, our passengers will benefit from forecasting features such as prediction of flight delays and waiting times, which can ma­ke their journey even more pleasant and further reduce the stress of passengers.

The digital airport environment will provide a “plug and play” environment for airlines with the objective of maximising passenger experience, minimising costs for the airline, and providing overall cost and operational efficiency. We will also implement the full potential of digital possibilities to create insights, build data-based products and enable data-driven decision-making, which will benefit the passengers as well as the airline partners.

“This is an exciting period for the Indian aviation sector, with many opportunities for growth and innovation.” Daniel Bircher

Key focus areas

As we move closer to the completion of the airport by the end of 2024, we remain committed to finishing the first phase of the project and delivering one terminal, one runway. Along wi­th this, we will focus on onboarding commerci­al partners. We recently awarded Roseate Ho­tels and Resorts the concession to build a 220-room property, while Air India SATS will develop a multimodal cargo hub at the airport. We are identifying other strong and experienced partners to operate key services such as retail, food and beverage, and other non-aeronautical services.

Key challenges

The overall journey has been exciting for us, as we are committed to constructing an airport that embodies efficiency, user-friendliness and sustainability for the Delhi NCR and western Uttar Pradesh regions. Even in the face of un­precedented challenges posed by the Covid-19 pandemic at the very beginning of the project, our progress in building the airport remains remarkable.

We have received great support from the go­vernment, which has been a cornerstone, pushing us forward to complete the airport within schedule. The passenger terminal has now taken shape. Simultaneously, comprehensive work on the runway is under way, spanning its entire length. In the upcoming months, mo­re than 25 buildings will come up at the airport site, encompassing pivotal components such as the passenger terminal, air traffic control tower, office complexes, sewage, water treatment facilities and electrical substations.

The ongoing construction remains steadfast on its course to achieving operational status by the end of 2024. We look forward to de­livering one terminal building and a single runway, with the facility to accommodate 12 million passengers annually.

Thus, despite very challenging timelines, we will ensure the highest quality of execution of construction work at a competitive cost, and at the same time ensure safe working conditions. We are very proud to announce that the project has achieved 10 million safe man-hours without accidents.

Future outlook

As India develops into an international aviation hub, it is crucial to acknowledge that the country’s aviation growth needs should be planned in an environmentally conscious way. We must develop a comprehensive plan to make the aviation industry greener and more sustainable.

Aviation is a global industry and contri­bu­tes about 3 per cent to greenhouse gas emissions, and about 5 per cent to climate impact. Mobility is unlikely to decrease, and the more people gain access to air mobility, the greater the increase in emissions. In the sector, aircraft are responsible for 98 per cent of climate-relevant emissions, but airports are static and therefore less tangible. The industry focus is on the decarbonisation of aircraft operations by reducing fuel consumption and adopting sustainable aviation fuel. For NIA, both its infrastructure and operation have been designed to achieve net zero emissions by 2030.

Videh Kumar Jaipuriar

In recent years, the Indian aviation sector has undergone a tremendous transformation, marked by notable milestones. Post-Covid-19, the Indian aviation market has shown one of the best recoveries in the world and has alrea­dy surpassed pre-Covid levels in many subseg­me­nts. Overall, airport passenger traffic for 2022-23 stood at 327 million (almost 96 per cent) as against 341 million in 2019-20. The resilience of the domestic air traffic market has been the mainstay of this recovery. On the back of this recovery as well as with a vision of significant future growth, the country’s two dominant carriers have placed among the largest fleet orders in the history of India’s aviation (470 by Air India and 500 by IndiGo).

Covid has also accelerated technology ad­option in overall passenger processing and cus­tomer engagement at airport terminals. Wh­­e­ther it is the adoption of DigiYatra or e-bo­ar­ding, there has been significant digital transformation. To address environmental concer­ns, the sector is investing in fuel-efficient air­craft and sustainable aviation fuels. Mean­whi­le, air cargo has surged, driven by the e-commerce and pharmaceutical sectors, leading to the ex­pansion of cargo facilities. The focus on regional connectivity has led to the growth of smaller airports and new routes, while mergers and acquisitions have reshaped the competitive landscape.

Biggest issues

The challenges that the sector faces today are linked to the growth potential for the future. The ministry recently commissioned a study to assess the potential of Indian airports and Indian air carriers to become global hub airports/carriers. Developing hub operations at airports will require interventions on multiple aspects including airport infrastructure, carrier capacities and enabling policies.

While airports need to plan their transfer facilities in line with passenger expectations for smooth transfer through the hub airport, air carriers will need to develop and offer attractive transfer products to capture their share of the market. Air carriers will also need to deploy adequate medium- and long-haul capacities. The government needs to come out with enabling policies to support seamless transfer through airport terminals – not only for passengers but also for cargo, by relaxing the res­cr­eening requirements, etc.

“The resilience of the domestic air traffic market has been the mainstay of the sector’s recovery.” Videh Kumar Jaipuriar

Technology and digital initiatives

Our unwavering pursuit of excellence has led us to strategically embrace technology and digital initiatives, revolutionising cargo operations and enriching passenger experience. We have already implemented the ministry’s DigiYatra initiative at 10 airports. Data analytics is being used to optimise scheduling and route planning. Predictive maintenance algorithms ensu­re cargo aircraft reliability, minimising disruptions. Our commitment to green practices is evident from our initiatives of fuel-efficient aircraft and sustainable aviation fuels. Our cargo terminal operators employ electric vehicles and use green energy. Meanwhile, our robust cybersecurity investments safeguard customer data and cargo information, ensuring protection against cyber threats.

Improving air cargo facilities

Delhi airport’s capacity expansion strategy aligns with the dynamic needs of the cargo com­munity and diverse industries. It encompasses both greenfield and brownfield initiatives, including:

• Two advanced integrated cargo terminals capable of handling up to 2.3 million metric tonnes annually. Currently, we are utilising around 50 per cent of the capacity.
• Our 50,000 square metre Air Cargo Logistics Centre III, the first bonded facility inaugurated in February 2023, addresses diverse sector demands, including logistics, e-comm­er­ce and critical cargo.
• We are developing a visionary 20 acre cargo city in front of the cargo terminals, which will include shared facilities, a public amenities centre and a dedicated cargo bypass road.
• We are establishing a revenue-generating frei­g­ht consolidation centre, utilising 30.5 acres of available space, within the airport premises.
• We are developing a special economic zone within the cargo city and a Financial Credibility Certificate, advocating supportive policies.

Future trends

The aviation industry is at a pivotal juncture, ad­apting to evolving market dynamics and shif­ting customer expectations. Some of the not­able trends that will shape its trajectory…

• Digitalisation of passenger processing: The use of DigiYatra has already eased passenge­rs’ journey and its adoption across more and more airports will further improve the same. The in­cor­poration of blockchain, IoT and big data an­alytics bolsters cargo visibility and supply chain transparency. Real-time data analysis supports predictive maintenance, route optimisation and demand projection.
• E-commerce and last-mile delivery: As e-commerce burgeons, the air cargo landscape will shift, necessitating adaptations for managing high-volume, small-package shipments. Last-mile delivery alliances and solutions are becoming integral components.
• Automated warehousing: The integration of automation technologies such as automated gui­ded vehicles, autonomous mobile robots and automated storage/retrieval systems is re­volutionising warehousing by tackling la­bo­ur shortages, enhancing precision and optimi­sing efficiency. Warehouse management software, coupled with radio frequency identification barcode scanning and cloud computing, affords real-time inventory management and shipment tracking.
• Customer-centric services: Elevating offerings such as digital booking, real-time tracking, pe­r­sonalised services and instant notifications enhances the overall customer experience.

Pradeep Panicker

The aviation sector has undergone significant evolution over the past few years. The pandemic brought many changes in airport operations, with technology completely transforming the airport ecosystem worldwide. Airports are now embracing various new technologies to ensure safe and seamless air travel, thereby redefining the passenger journey. The heightened focus on sustainability has not only ensured affordability but also increased profitability that will go a long way in reforming the industry. The use of IoT sensors, AI, machine learning and apps will further enhance security and improve the passenger experience, among other benefits.

GMR Hyderabad International Airport Limited (GHIAL) has been a pioneer in deploying cutti­ng-ed­ge technologies and has successfully im­plemented solutions such as smart airside ap­plications that enhance the tracking of GSE equipment on the airside as well as integrated command control centre applications for monitoring airside, terminal and landside mo­vement and operations. Further, the airport has adopted bridge-mounted power units and preconditioned air units to minimise carbon emissions. Passen­ger-centric technologies such as DigiYatra, self-baggage drop facilities, robotic automation and blockchain technology have been introduced to enhance operational efficiency. By embracing future-forward technology, the new and im­pro­ved airport infrastructure combined with the right set of innovations in design and technology has improved operating efficiency and passenger experience.

Key challenges

Despite high global inflation rates and major economies facing the possibility of a recession, economic growth in India has remained resili­ent. The aviation industry has overcome the challenges posed by the Covid-19 pandemic and is gradually returning to pre-pandemic levels. While the demand for services was robust in financial year 2023, the industry faced constraints regarding available aircraft capacity. The challenges faced by a few airlines due to the non-availability of engines from Pratt & Whi­tney and maintenance issues have resulted in 10-12 per cent of the Indian fleet being grounded. As a result, airfares have increased, leading to slow traffic growth owing to a de­ma­nd-supply mismatch. A resource crunch in the aviation sector is looming large, with the shortage of active air traffic controllers reaching nearly 20 per cent. Airlines had to deal with workforce issues, being understaffed. The cu­mulative orders of around 1,000 aircraft plac­ed by a few noted Indian airlines will take time to materialise due to global supply chain iss­ues. The extended lead times will result in an aircraft shortage given the increasing number of passengers. There could also be a shortage of skilled manpower for the airlines, airport operators and ATC controllers, which could lead to operational issues.

“With the strong emphasis on sustainability, airports are introducing initiatives to reduce their carbon footprint.” Pradeep Panicker

Focus on digitalisation

Some of the pioneering technology and digital initiatives include:

• Express security check: GHIAL is the first airport in the country to offer passengers travelling with only hand baggage a direct entry into the security hold area right from the departures gate.
• Elimination of hand baggage stamping: Our su­ccessful proof-of-concept solution for the eli­mination of hand baggage stamping was ap­p­roved by the government and has been im­plemented across major airports in the country.
• E-boarding: GHIAL is the first airport in India to offer an end-to-end e-boarding facility for all domestic flights, offering passengers a fully paperless experience.
• Face recognition technology: We were the first airport in India to initiate face recognition trials, in July 2019.
• Self-bag drop: The airport has initiated the installation of self-bag drop machines, which allow departing passengers to print their boarding cards and baggage tags before proceeding to drop their baggage.
• Automatic tray retrieval system: Hyderabad Air­port is the only airport in the country to ha­ve all its domestic baggage screening ma­chi­nes 100 per cent compatible with the au­tomatic tray retrieval system.
• FASTag car park: We have launched India’s first ever FASTag car park, which allows ease of payments and reduces queueing at the entry and exit of the parking lot.
• Touchless elevator: GHIAL has developed an ingenious solution of a touchless elevator control system based on infrared technology.
• Smart trolleys: GHIAL is Asia’s first airport to deploy IoT for real-time tracking and maintenance of baggage trolley availability for passengers across the airport.

Focus on air cargo

The GMR Hyderabad Air Cargo (GHAC) terminal is one of the preferred gateways for pharmaceutical logistics across India and abroad. A major highlight of the facility is the unique “Pharma Zone”. GHAC has implemented a large multi-ULD cool dolly, which makes it one of India’s largest centres for handling temperature-sensitive cargo up to -20 degrees Celsius. The terminal also offers one of India’s largest fleets of modern temp-controlled cool containers. Recently, GHAC has obtained GDP certification and ISSAGO accreditation.

Capacity expansion

Hyderabad airport was the first greenfield airport to be built on the PPP model in India. It was commissioned in a record time period of 31 months. Initially designed to accommodate 12 million passengers per annum (mppa), the airport has expanded to serve more than 21 mppa at present. Over the years, the airport has witnessed a surge in the number of flights and destinations across domestic and international sectors. As one of the fastest growing airports in In­dia, the Hyderabad International Airport envisions a future of continued expansion. To meet the rising demand in passenger traffic, the airport has embarked on a phase-wise expansion. The first phase of the expanded airport has a passenger capacity of 34 mppa and is poised to become operational shortly.

The way forward

Significant orders for new aircraft from Air India and IndiGo further reinforce the belief that the Indian aviation industry is expected to grow tremendously in the coming years. The Ministry of Civil Aviation (MoCA) has plans to privatise nearly 25 AAI-operated airports by 2024-25 under the National Monetisation Pipeline.

Meanwhile, with a strong emphasis on sustainability, airports are introducing initiatives to reduce their carbon footprint. Electric vehicles are being used for airside and landside operations, and alternatives to regular fuel, such as biodiesel, are being explored. Airlines are also looking at sustainable aviation fuel to contribute to the net carbon zero target.

Technology adoption is another significant factor that will help the industry to streamline operations. 5G, blockchain, RBI’s introduction of central bank digital currency and fintech adoption will have a positive impact on the industry. Emerging technologies like the Meta­verse, Beacon, parallel sharing and AI could al­so be game changers.

The increase in air travel implies a higher demand for skilled manpower. With the planned privatisation of AAI-run airports, there will be many opportunities for both experienced and fresh talent. Airports and airlines might seek to collaborate with educational institutions to establish a strong talent pipeline.

MoCA has brought on board consultants to analyse airports such as Heathrow, Dubai, Sin­ga­pore, and conduct feasibility studies on major airports such as Delhi, Hyderabad, Mumbai and Bengaluru, which hold immense potential to be transformed into true international hubs.