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A Ficci-KPMG report on the Indian aviation sector, launched on Thursday at the ongoing India Aviation 2014 show here, said the country had the potential to become the third-largest aviation market in the world by 2020 and the largest by 2030, given the large untapped potential for growth, as access to aviation was still a dream for 99.5 per cent of its population.
The report, which puts the size of the Indian civil aviation industry at around $16 billion, said the next generation of aviation growth in India will be triggered by regional airports. There are 450 unused or abandoned airports and airstrips across the country. Many states, especially in the east, have started initiatives to promote air connectivity, it said.
“Indian aviation offers significant long-term opportunities for global aviation players. The Indian government and industry are already working together closely,” said Sidharth Birla, president of Ficci.
Stating several Tier-II and Tier-III cities were still unconnected or underserved, the report said a lot more needed to be done. These include relaxation of regulations, revising the security requirements, allowing domestic code sharing, providing free or discounted utilities and connecting infrastructure.
“The proposed Essential Air Services Fund by the ministry of civil aviation needs to be set up immediately. All this will have a multiplier effect in terms of higher growth of local economic activities, tourism and development,” the report added. Highlighting the sector's significant growth over the past decade, the report said passenger throughput grew to 159 million in FY13 and cargo throughput to 2.19 million tonnes, a growth of 13 per cent and 10 per cent, respectively, compounded annually over FY2003-13.
On low-cost carriers (LCCs), which in 2012-13 accounted for almost 70 per cent of the domestic capacity, the report said LCCs had driven the growth in aviation and tourism through low fares, introduction of regional routes and periodic discount offers.
“Full service carriers plan to shift more seats to their low-cost offerings, in line with market trends. Indian carriers plan to double their fleet size to around 800 aircraft by 2020,” it added.
With these expansion plans, the need to strengthen the human resource development infrastructure is immediate. The report estimates the total manpower requirement of airlines is estimated to rise from 62,000 in FY2011 to 117,000 by FY2017.
“It is estimated that the sector, overall, will need about 350,000 new employees to facilitate growth in the next decade,” the report said, adding the current MRO (maintenance, repair and overhauling) market in India was estimated at $700 million.
With the total Indian fleet doubling in number by 2020, it was critical to make it a strong domestic MRO industry.
According to industry sources, only five to 10 per cent of MRO work for domestic scheduled carriers is done in India, while most of the maintenance activities are outsourced to third-party service providers outside the country, the report said.
