Rapidly expanding air transport network and opening up of airport infrastructure to private sector participation have fuelled the growth of the air traffic in the country. India is likely to be the fastest growing aviation market in the world in the next 20 years.
Indian airport system is poised to handle 336 million domestic and 85 million international passengers by 2020, from the current level of 121 million domestic and 41 million international passengers, making India the third largest aviation market. According to International Air Transport Association's (IATA) Airline Industry Forecast 2012-2016, India's domestic air travel market would be among the top five globally, experiencing the second highest growth rate at CAGR of 13.1%. The second phase of growth in the Indian aviation is expected to come from the Tier II and Tier III cities. The non-metro airports presently account for only 30% of the total air traffic, which is expected to rise to 45% over the next few years, representing vast untapped future market potential.
With smaller cities set to lead the air traffic growth in the country, the government is planning to build nearly 200 low-cost airports in the next 20 years to meet the demand for air travel. With metro routes now being highly competitive and well served, airlines are looking for new opportunities beyond metros.
In an endeavor to strengthen the air connectivity domestically, Government has taken significant measures to providing affordable air connectivity to remote and interior areas of the country- the North Eastern Region and Tier II and III cities of India. Apart from the development of low frill airports and modification Route Dispersal Guidelines, Government is in the process of formulation of a policy for the promotion of regional and remote area connectivity, incentivizing Indian airlines to operate on these routes by code sharing and seat credit mechanism.
Furthermore, the government is planning to construct 15 additional airports in the country under the Greenfield Airport Policy, by identifying the most suitable lost cost viable model for the development of small airports. These airports are expected to improve connectivity with underserved and unserved regions of India. Moreover, Airport Authority of India plans to invest INR 1500 crore in the development of nonmetro airports during the 12th plan.
In pursuit of simulating the air connectivity, India is planning to invest over US$ 120 billion in the development of airport infrastructure (construction of new airports, expansion, and modernization of existing airports) and development of low-cost airports to keep the tariff at its minimal at smaller airports, improvement in connecting infrastructure (road, metro, sea link etc.) development of world class Air Navigation Services (ANS) infrastructure; enhancing the present operations of helicopters to improve connectivity to remote/smaller places with bigger cities; modernizing security and surveillance at airports; and skill augmentation through a vibrant, world class aviation education and training mechanism. May this year bring us all lots of good news in our life as well as the aviation sector.
