India is expected to become the third largest aviation market before 2025, but the industry is not without its challenges. Over our next few blogs, we’ll be looking at the current situation in India, upcoming developments and the future of aviation.
India’s improved economy over the last few years has led to a revival in the civil aviation sector. Passenger traffic has grown at a rate of 9.29% over the last five years, reaching 223 million in 2015-16, with domestic traffic accounting for nearly 76% and international traffic 24%. As well as a significant growth in GDP, the decline in fuel prices has contributed to the improved outlook for India’s economic growth.
However, it remains a highly under-penetrated market, with many government policies under review to encourage development.
India’s Airports
Airport development in India is primarily controlled by the public sector, namely the Airports Authority of India (AAI). The AAI manages 125 out of 134 airports in the country. 21 of these airports are international, and there are also five privately-managed airports in India – Delhi, Mumbai, Bengaluru, Hyderabad and Cochin. These privately-owned airports carried a passenger traffic of 128 million in 2015-16, an increase of 16.3% over 2014-15 At the four metro public-private partnership (PPP) airports – Delhi, Mumbai, Bengaluru and Hyderabad – the public sector retains a 26% share.
Within the current framework of government control, new terminals have been commissioned at five airports by the Indian government, at Chennai, Kolkata, Bhubaneswar, Puducherry, and Ranchi airports. Around 21 privately owned airports are at initial stages of development. Based on the project pipeline tracked by India Infrastructure Research, there are a total of 138 aviation projects in the pipeline in India.
With the completion of many key projects such as the development of Goa International Airport, commissioning of the new integrated terminal at Kolkata Airport, and commissioning of the new international and domestic terminal at Chennai Airport, passenger handling capacity at Indian airports increased from 72 million in 2005-06 to a terminal capacity of over 250 million in January 2016.
Many airports in India are expected to run out of their current capacities in the next ten years. There is a high rate of capacity utilisation at most airports with most non-metro airports exceedingly over-utilised. With India Infrastructure Research stating that passenger traffic is projected to grow from 239 million in 2016-17 to at least 485 million in 2025-26, there is a real need for urgent steps with regard to either expanding existing facilities or creating more airports.
Find out more about aviation developments in India, including planned greenfield airports, the government’s role and the new Civil Aviation Policy, in our next blog.
Image Source: By Himmat Rathore from New Delhi, India (Air India, Boeing 747-437) [CC0], via Wikimedia Commons