One of the fastest-growing yet toughest industries to get into is the Indian aviation industry.
Today, we are deep-diving into this very volatile yet dynamic industry.
Over the past decade, India’s aviation sector has been growing at an impressive rate of 10%, which is 2.5 times faster than the global average.
This growth has led to intense competition, with new players like Akasa Air, and Fly91, entering the market.
This sector plays a significant role, contributing 5% to India’s total economy and providing jobs for over 4 million people.
In 2020, the Indian airline market was worth $20 billion, and it’s expected to double to $40 billion by 2027. While most of this comes from domestic travel, international journeys are slowly recovering from the pandemic.
India has become a hub for budget-friendly airlines, with IndiGo and SpiceJet leading the way, catering to the growing middle class eager to travel more.
Sky’s the Limit: Opportunities Ahead
The demand for airplane maintenance and repair services in India is set to soar as air travel becomes more popular. Currently valued at $900 million, the Indian aviation maintenance market is projected to reach $4.33 billion by 2025, growing at 14-15% annually.
The recent mega deals proves that there is a need for more aircrafts to match the growing demand in the industry.
Drones, unmanned aerial vehicles, are gaining popularity in various industries, with the Indian drone industry expected to generate revenue of up to $1.8 billion by 2026.
Research and Development
India’s aviation sector is experiencing a research and development surge, increasing its airport count from 74 in 2013-2014 to an expected 220 by 2024-2025. Government-private sector collaborations and infrastructure investments aim to create numerous jobs in the next decade, while passenger numbers are on the rise.
The future looks bright, especially for international travel and cargo. Government initiatives like UDAN have improved regional connectivity. Plus, technological advancements such as AI and automation are bringing efficiency and cost savings.”
Government Support
The increasing demand for air travel in India has prompted the government to provide support.
- NABH (NextGen Airports for Bharat) Nirman: An initiative to significantly expand airport capacity to handle a billion trips annually in the next 10-15 years.
- GIFT City Advantage for Aviation Sector: Offering incentives for aircraft leasing and tax benefits.
- Regional Connectivity Scheme: Enhancing air connectivity to smaller cities and northeastern states.
- AAI Startup Policy: Promoting innovation and improving airport services through collaboration with stakeholders.
A New Era of Growth: Expanding Infrastructure
- India recognizes that building infrastructure is key to a successful aviation industry. Thanks to the UDAN scheme, the number of airports has increased from 74 in 2014 to 140 in 2022, including 31 international ones. Plans are in place to have more than 200 airports in the next five years, with 21 new airports approved. Both government and private investments are fueling these ambitious projects.
- Earlier this year, Air India ordered 470 jets from Boeing and Airbus. IndiGo ordered 500 A320neo planes, the largest deal by a single carrier in civil aviation history.
- In 2023, IndiGo and Air India collectively hold 81.3% of India’s domestic market. IndiGo leads with 56.2%, while Air India, under Tata group’s control, increased its share last year.
One of the fastest-growing markets
In conclusion, India’s aviation industry has skyrocketed, now ranking as the world’s third-largest market, with an expected 685 million air travellers by 2042, a remarkable increase from 165 million in 2019.
As per a June Barclays report, Indian airlines boast the world’s second-largest order backlog, making up nearly 7% of the global total, trailing only the United States. With these impressive statistics, we anticipate India’s aviation sector will continue to reach new heights in the future.
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