Civil aviation sector is crucial for the development of economic activity as it facilitates faster movement of people and air cargo. According to a study by the International Civil Aviation Organization (ICAO), civil aviation sector creates output and employment multipliers of 3.25 and 6.10 respectively.
In the last two decades, India’s civil aviation sector has seen considerable transformation in terms of policy measures, entry of new airlines, innovation in services and so on. Remarkably, the entry of Low cost carriers (LCCs) since 2003-04 has boosted passenger traffic by making air travel affordable for middle class population.
Domestic passenger traffic in the sector expanded 19% to 100 million in 2016-17 from about 61 million in 2014. With this size of passenger traffic, India has become the third largest aviation market in the world. Spicejet, Indigo, Jet Airways, Air India, Air Asia, Vistara, Go Air are some of the players in the sector. Currently, there are more than 100 operational airports in the country and government hopes to increase this number to more than 200 in the next 10-15 years.
Progressive policy push has been a major driver of growth in this sector. Government of India released the National Civil Aviation Policy 2016 to enhance regional connectivity through budgetary funding and development of infrastructure. Among other things, the policy aims to increase the number of domestic air travel ticketing to 30 crore by 2022 and 50 crore by 2027. The policy envisages international ticketing to increase to 20 crore by 2027. Government of India has also set up Aerospace and Aviation Skill Sector Council to monitor progress in skill development.
Air cargo is another fast growing segment in the sector. Airport Authority of India (AAI) has introduced 24x7customs clearance of import and export cargo at 13 airports. Other measures such as ‘Single Window system for on-line clearance of cargo, Automatic Storage & Retrieval System (AS&RS), Elevated Transfer Vehicle (ETV) facilities have been introduced to streamline movement of air cargoes. In terms of value, India’s air transport system handles 23% of the overall merchandise exports in the country.
In the coming years, AAI plans to establish cargo infrastructure and facilities at 24 airports across various states to ensure balanced regional growth.