The Indian aviation sector has been witnessing significant activity with the demand for air travel increasing and the setting up of modern infrastructure. The Ministry of Civil Aviation and the Airports Authority of India (AAI) are making concerted efforts to create airport infrastructure to cater to the growing demand as well as improve regional connectivity in Tier II and Tier III cities. Going forward, the key focus areas will be developing smart and sustainable airports, enhancing the passenger experience and promoting sustainable operations. In an interview with Indian Infrastructure, Sanjeev Kumar, Secretary, Department of Defence Production, and Former Chairman, AAI, highlighted the growth in the aviation sector, the key issues and challenges, and the future focus areas. Edited excerpts…
As we approach 2047, India’s airport infrastructure is set for a major transformation. To achieve the status of “Viksit Bharat” by 2047, significant advancements in airport infrastructure are essential to support the anticipated economic growth rate and reach the projected GDP of $30 trillion and a per capita income of $18,000 to $20,000. Major expansion in airport infrastructure would be required to accommodate the surge in passenger traffic.
The growth in the civil aviation sector is driven by the emerging middle class and rising per capita income. According to the People Research on India’s Consumer Economy, the percentage of the middle-class population has more than doubled, from 14 per cent in 2004 to 31 per cent in 2021, with projections suggesting a rise to 47 per cent by 2030 and 61 per cent by 2047.
Rapid economic development and its resultant urbanisation, which constantly generates connectivity needs, is also central to the sector’s growth story. Government policies, in terms of incentivising the sector by stimulating the demand side with schemes such as Ude Desh ka Aam Naagrik (UDAN) in Tier II and Tier III cities, are also playing a key role.
Improving metrics
India’s civil aviation sector has experienced remarkable growth over the past two decades. In 2001, the country had 65 operational civilian airports, with a combined annual capacity of 66 million passengers, serving 42 million passengers. By 2024, this number had increased significantly to 143 operational airports with a combined annual capacity of 511 million passengers and served 376 million passengers in 2023-24. This rapid growth was witnessed in both the domestic and international passenger segments, with a CAGR of 12.7 per cent and 8.3 per cent respectively.
In recent developments, new airports were inaugurated in Hollangi, Kushinagar, Deoghar, Rajkot, Ayodhya, Aligarh, Shravasti, Chitrakoot, Azamgarh and Moradabad. Furthermore, infrastructural upgrades were carried out at Chennai, Port Blair, Surat, Tiruchirappalli, Kanpur, Tezu, Pune, Gwalior, Kolhapur, Jabalpur, Dehradun and Adampur, enhancing capacity and connectivity in these cities.
Sector uncertainties
The aviation sector faces several uncertainties that can impact its stability and growth. Fluctuations in fuel prices, the economy and geopolitical tensions create volatility in operations and financial performance. Additionally, unforeseen events such as pandemics or natural disasters can lead to abrupt disruptions in travel and trade. Regulatory changes and evolving environmental standards also pose challenges, requiring continuous adaptation and compliance.
Growth projections
India’s population is projected to reach 1.65 billion, with 61 per cent being middle class, necessitating a robust network of airports to accommodate the growing demand for air travel. Various forecasting methods have been employed to predict passenger traffic, yielding intriguing insights. By extrapolating past growth rates, which have consistently shown an annual increase of 10-11 per cent, passenger traffic is expected to range between 3.37 billion and 4.15 billion passengers, with international traffic accounting for 330 million to 410 million.
Drawing parallels with China’s aviation growth trajectory, India’s civil aviation sector may expand at a similar rate of 10-11 per cent annually, suggesting an estimated traffic range of 3 billion-3.5 billion passengers, including 300 million-350 million international passengers by 2047.
The anticipated surge in passenger traffic necessitates a substantial increase in airport capacity, with projections indicating a requirement and capacity to serve 4 billion-4.75 billion passengers per annum. This estimate assumes a capacity utilisation factor of 75 per cent, which is the ratio of the actual annual passenger traffic to the annual capacity of an airport, in line with historical utilisation. To accommodate this capacity, India would require 300-350 airports, including the expansion of the existing 150 airports and around 200 new airports, underscoring the need for significant investment in airport infrastructure.
Airport distribution
To ensure equitable airport development, it is crucial to distribute airports uniformly, based on population needs. However, states face challenges such as land acquisition difficulties and varying levels of support for airport infrastructure. Although the National Civil Aviation Policy mandates that states provide land free of cost to AAI, different priorities among states have led to uneven airport distribution.
To address this issue, states may be encouraged to prioritise airport infrastructure and the central government may consider partial financing for land acquisition. Developing and operating airports, especially in Tier II and Tier III cities, are essential despite the initial economic challenges. Strategies to support these airports include reducing capital costs through free land provision, enhancing land monetisation and leveraging increased property values around airports.
Operational costs can be managed through subsidies, optimised manpower and shared security responsibilities. Additionally, utilising civil enclaves in defence airports can enhance connectivity cost effectively although operational restrictions may limit growth.
Mapping future growth
India’s existing 35-40 airports are expected to cater to more than 20 million passengers annually by 2047. This projection underscores the necessity to expand existing airports in big cities to evolve into hubs or mega airports, with the support of the central and state governments. Notably, as of 2019, the US had 29 such mega airports and China had 24. Meanwhile, India has only five as of 2024. Enhancing these airports will ensure seamless transit passenger movement and comprehensive connectivity.
To accommodate the burgeoning passenger traffic, several urban conglomerates will require additional airports. Cities such as Delhi, Mumbai, Bengaluru, Chennai and Kolkata will necessitate significant expansions and new greenfield airports are expected to handle the increasing passenger traffic. Other cities, including Hyderabad, Port Blair, Srinagar, Pune, Chandigarh and Calicut, will also require new airports or expansions to meet future demand.
To effectively map the growth of passenger traffic and infrastructure, a strategic approach is crucial. This includes shortlisting potential locations for greenfield airports based on state-wise needs and population projections. Such planning should be undertaken today to ensure that by 2047 there will be one airport per 5 million population. However, developing these airports presents significant challenges, mainly with regard to securing suitable land for the development of airports and investment. Field inspections, obstacle limitation surface surveys and collaboration with state governments and private owners are essential. Protecting operational areas and strategic land acquisition are critical steps for successful implementation.
Furthermore, strategic identification of new greenfield airport locations in densely populated areas is necessary. Expanding existing airstrips should only be considered if they can support larger aircraft and all-weather operations.
