Budget 2024: Record air travel, more airports fuelling India’s aviation growth

Aviation's growth trajectory: The unprecedented gloom and doom caused by aircraft groundings in the wake of COVID-19 outbreak, created a huge roadblock for the global aviation sector to overcome. Three years after beating the pandemic blues, Indian carriers have recorded a sharp double-digit passenger growth.  The cumulative domestic air passenger traffic for the first eight months of FY24 reached a total of 1,007 lakh, representing a YoY growth of 17 per cent and 5 per cent higher than the pre-Covid levels. 

India’s projection to become the global aviation leader by 2030, has instilled confidence in airlines, which have placed confirmed orders for 1,500 new aircraft. Besides, a two-fold increase in greenfield airports across the country during the last nine years, driven by increased usage of Sustainable Alternate Fuel (SAF) by airlines is a testimony to the country's net-zero emission goal. Will regulatory mechanisms, and other industry factors positively influence India’s aviation in the next fiscal? Republic Business takes a deep dive. 

Air travels' ‘UDAN’ 

Projections charting the trajectory of India’s aviation sector, expect the addition of 3,500 new aircraft by 2047. Airlines at present have placed confirmed 1,500 aircraft orders, for strengthening the existing fleet of 810 aircraft, says KPMG and FICCI's recent report. 

Image credit: Unsplash 

An increase of nearly 2,700 aircraft, over 24 years, with a 6 per cent growth rate is expected to help in connecting the country's smaller centers with their larger peers.  Of the total 3,500 new aircraft, Indian carriers are expected to induct 2,700 aircraft for their domestic operations, while the remaining 860 aircraft are expected to be pressed for international flights. 

As per KPMG and FICCI report, this fleet expansion can help boost the government's National Civil Aviation Policy (NCAP 2016) and the policy framework for the Regional Connectivity Scheme (RCS) or ‘Uday Desh Ka Aam Nagrik’ (UDAN). 

Sustainable Alternate Fuel 

With sustainability at the forefront of the country's growth ambition, the aviation sector is expected to play a pivotal role, in helping India achieve its net zero emission objective, a concept first envisaged during the historic Paris Agreement. To mitigate aviation emissions, more airline companies are now taking a pledge to increase usage of Sustainable Aviation Fuel (SAF). The prevailing market conditions and viability factors are likely to influence airliners to switch to green fuel. 

Budgetary allocation

The central government has set up an expert committee to review the “Harmonised Master List of Infrastructure”, as a part of which 50 additional airports, heliports, water aerodromes and advanced landing grounds are set to be revived. 

This was part of the efforts by the central government, as announced by Finance Minister Nirmala Sitharaman in her 2023-24 Union Budget speech. 

Pertinently, in its infrastructure endeavor, the Uttar Pradesh government has finalized the Regional Rapid Transit System (RRTS) connecting the Noida International Airport in Jewar with Ghaziabad RRTS Station through Greater Noida West, Surajpur and Pari Chowk. The corridor proposed by NCRTC spans 72 km and has 12 elevated stations. The Northern Terminal will be located at the already existing Ghaziabad RRTS station, while the Southern Terminal will be at Jewar International Airport. 

Notably, the proposed bullet train to connect Chhatrapati Shivaji Maharaj International Airport in Mumbai to the upcoming Navi Mumbai Airport is also being seen as a step for seamless connectivity to India’s airports.