India Is World’s Third Largest Domestic Aviation Market

The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.

India’s Civil Aviation Minister Jyotiraditya Scindia said on Thursday last week that India has become the third largest domestic aviation market in the world. Speaking at a curtain raiser event on ‘Wings India, 2022’, Scindia said that India presently handles the third largest domestic traffic after the US and China.

“We all know that in this densely globalised economy, air transport is a key element in the country’s transport infrastructure and plays an important role in the country’s economic growth,” he said.

The minister said that the overall freight handled by the country’s airports during the first two quarters of FY22 (combined) has recovered to more than 80 per cent (15.36 lakh MT during April-September FY22) of the pre-pandemic level, despite the country being hit by a severe second wave in the first quarter. The ‘Wings India, 2022’ to be held in Hyderabad is slated to be Asia’s largest event on civil aviation.

Market Size

India is expected to overtake China and the United States as the world’s third-largest air passenger market in the next ten years, by 2030, according to the International Air Transport Association (IATA).

India’s passenger* traffic stood at 115.37 million in FY21. Domestic passenger and international passenger traffic declined at a CAGR of -9.02% and -28.64%, respectively, from FY16 to FY21, owing to COVID-19-related restrictions on flights in FY21. In FY21, airports in India pegged the domestic passenger traffic to be ~105.2 million, a 61.7% YoY decline, and international passenger traffic to be ~10.1 million, an 84.8% YoY decline, over the fiscal year ended March 31, 2020. In March 2021, the average daily passenger traffic stood at 546,702.90.

Between FY16 and FY21, freight traffic declined at a CAGR of -1.77% from 2.70 million tonnes (MT) to 2.47 MT. Freight traffic on airports in India has the potential to reach 17 MT by FY40.

Aircraft movement declined at a CAGR of -7.79% from 1.60 million in FY16 to 1.20 million in FY21. From FY16 to FY21, domestic aircraft movement decreased at a CAGR of -6.44% and international aircraft movement declined at a CAGR of -18.52%. India’s domestic and international aircraft movements reached 1,062 thousand and 135 thousand, respectively, in FY21.The expenditure of Indian travellers is expected to grow to Rs. 9.5 lakh crore (US$ 136 billion) by 2021.

To cater to the rising air traffic, the Government of India has been working towards increasing the number of airports. As of 2020, India had 153 operational airports. India has envisaged increasing the number of operational airports to 190-200 by FY40. Further, the rising demand in the sector has pushed the number of airplanes operating in the sector. The number of airplanes is expected to reach 1,100 planes by 2027.

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