The aviation sector has gained significant momentum, driven by the operationalisation of various notable projects and dynamic market trends in the segment. The rising importance of enhanced connectivity and focus on passenger-centric developments are some of the key trends shaping the sector.
Indian Infrastructure looks at some of the key developments in the aviation sector…
Government support and key initiatives
- Under the Union Budget 2024-25, the Ministry of Civil Aviation (MoCA) has been allocated Rs 23.57 billion. This year’s budget includes an outlay of Rs 5.02 billion for the Regional Connectivity Scheme, one of the government’s flagship schemes for enhancing air connectivity.
- Effective on July 15, 2024, a uniform integrated goods and services tax rate of 5 per cent has been implemented on all aircraft and aircraft engine parts. Earlier tax rates ranged from 5 per cent to 28 per cent.
- In November 2023, indicative blending targets were set for the use of sustainable aviation fuels. The targets specify a blending of 1 per cent by 2027 and 2 per cent by 2028, both initially for international flights.
Capacity enhancement at airports
Commissioned and upcoming greenfield airports
- Operations have commenced under various greenfield airport projects over the past one year. The new Rajkot airport in Gujarat, which was inaugurated in July 2023, witnessed the commencement of operations in September 2023, while the Maharishi Valmiki International Airport at Ayodhya in Uttar Pradesh was inaugurated in December 2023, and commercial operations commenced in January 2024. Further, Malkangiri airport in Odisha was inaugurated in January 2024.
- Mega greenfield airports such as the Navi Mumbai International Airport in Maharashtra, the Noida International Airport in Uttar Pradesh and the Bhogapuram greenfield airport in Andhra Pradesh are currently under construction and likely to commence operations over the next few years.
- Purandar airport in Maharashtra received clearance from the Directorate General of Civil Aviation in June 2024. Further, in July 2024, key authorities signed an MoU for the Kota greenfield airport in Rajasthan. Additionally, processes relating to site clearance and other formalities are currently under way for the Parandur greenfield airport project in Tamil Nadu.
Capacity augmentation at brownfield airports
- Various existing airports have also witnessed expansions in terms of capacity and enhancement of facilities over the past one year. These include the inauguration of new terminal buildings at airports located in Pune, Tiruchirapalli, Surat, Lucknow, Gwalior, Port Blair, Kolhapur, Jabalpur, Delhi, Aligarh, Azamgarh, Chitrakoot, Moradabad, Shravasti and Adampur.
- Foundation stones were laid for various projects, including new terminal buildings, at Jodhpur airport in Rajasthan; the Rajahmundry, Kadapa, Hubbali and Belagavi airports in Andhra Pradesh; and the Jammu Airport Civil Enclave project. Foundation stones were also laid for converting the existing airstrip into a full-fledged airport at Datia in Madhya Pradesh and for an airport at Ambala Cantonment in Haryana alongside the existing Air Force Station.
Addition of new cargo facilities
- Newly operationalised cargo facilities include the integrated cargo complex at the Shaheed Bhagat Singh International Airport in Chandigarh, the new cargo terminal at Andal (Durgapur) airport in West Bengal and a new integrated cargo terminal at Pune airport in Maharashtra. Further, the foundation stone for the multi modal cargo hub at Noida airport was laid in September 2023.
Moves by airlines
- Akasa Air added its 20th aircraft in August 2023, making it eligible for international operations. Following this, it received the approval for international flights and commenced operations in March 2024.
- In September 2023, Zooom Airlines obtained the air operator’s certificate (AOC). Post the AOC, it resumed operations in January 2024.
- In March 2024, the regional airline Fly91 was inaugurated. Moreover, JettWings Airways received permission to connect various airports in the Northeast, West Bengal, Uttar Pradesh and Bihar under the Ude Desh ka Aam Nagrik scheme. Further, in July 2024, Air Kerala received the initial no-objection certificate from the MoCA, with permission to operate scheduled commuter air transport services for a period of three years.
- In June 2024, the National Company Law Tribunal provided approval for the merger of Air India and Vistara to form a full-service carrier.
Rising funding activities
- India Infrastructure Finance Company Limited sanctioned loans amounting to Rs 88 billion as of October 2023 to boost the sector and enhance current infrastructure. The infrastructure lender has supported the development of airports with a project outlay of approximately Rs 740 billion.
- For the Bhogapuram International Airport in Andhra Pradesh, the GMR Group secured a loan worth Rs 40 billion in October 2023. Further, the National Investment and Infrastructure Fund agreed to invest Rs 6.75 billion in the airport, in the form of compulsory convertible debentures.
