Is India’s civil aviation infrastructure growing enough to match the aspirations of airlines that have placed mega aircraft purchase orders?
India’s civil aviation sector is at an inflection point. Earlier, it was seen more as a limited and elitist service. The monumental change Prime Minister Narendra Modi has brought about is that he has democratised the services of civil aviation for all Indians.
That is reflected in the numbers. In 2013-14, there were 6 crore passengers; now the airlines are carrying about 14.5 crore passengers (annually). Pre-Covid, our high was about 420,000 passengers a day. In the non-peak season this year, we crossed 460,000 on a single day. This indicates a new demand surge in the sector.
Also, the fleet size of aircraft grew from sub-400 in 2014 to about 700 now. So, there has been a 75% increase in the number of aircraft in nine years.
Coming to infrastructure, we had 74 airports in 2013-14 but, today, if you include heliports and waterdromes (for seaplanes), the number has gone up to 148. A huge expansion of physical infrastructure is already visible.
Where will the numbers go from here?
India will have a fleet size of 1,200-1,400 planes by 2030, up from the current 700. We will have enough airport capacity. I am looking at the number of airports growing from 148 now to close to 230-240 during this period. I am also looking at passenger traffic growing from the current 14.5 crore (145 million) a year to almost 42 crore by 2030, which means a three-fold increase. So yes, there is a long journey yet to be covered.There’s already air congestion in metro cities. How will you address it?
In six metros (Mumbai, Delhi, Kolkata, Bengaluru, Chennai and Hyderabad), throughput capacity on an annual basis is roughly about 221 million passengers which, I expect, will rise to 410-430 million in the next 4-5 years. The target for Delhi airport is to go from 70 million to 109 million, making it one of the largest airports in the world. The nearby Jewar airport (in Greater Noida, UP) will come up by 2024, with an initial capacity of 12 million passengers.
As far as the Mumbai airport is concerned, we have capped the capacity at the current level of 54 million passengers per annum. But Navi Mumbai airport is being built, which will add another 50 million capacity in the next 5-6 years. There are similar plans for other metro airports too.
Aren’t you concerned about duopoly, with IndiGo and Tata Group-owned airlines capturing almost the entire market? Isn’t that a reason for the skyrocketing airfares in the country?
I don’t agree with this assessment. If you look at the aviation industry in the past 20 years, you must have witnessed airlines shutting down, for example, Kingfisher, Jet Airways, et al.
For the first time in many years, we have seen the birth of a new airline in the form of Akasa Air. It has grown from two to 12 planes and will eventually have about 72 planes. That is their ambition. Also, UDAN is a game-changer not just in democratising aviation but also in spawning multiple regional airlines, say Star Air, FlyBig and IndiaOne Air.
As we speak, a few others are coming on board. What we have seen is an emergence of multiple players. I consider the Indian aviation industry to be a dynamic space — as the product and service offerings of a carrier improve, it will gain market share, and if those offerings decline, it will lose market share.
But a steep rise in airfare is a reality.
For me, what is important is the offering to the customers at a reasonable price point. About a couple of months ago, there was an issue with regard to pricing. I called a meeting with all the airlines on June 5 and sorted it out. Many passengers experienced high fares in sectors such as Delhi, Leh, Mumbai, Srinagar etc.
It was not premeditated. It was caused by two factors — one, there was an unprecedented demand in the high summer season, and two, GoAir, that was flying 54 aircraft, was grounded, creating a sudden capacity constraint. But fares have come down by 25-30% in most cases and up to 65-70% in select few. As we speak, you can buy a Delhi-Hyderabad ticket for Rs 4,500 which is comparable to train fare.
Do you think trains, particularly Vande Bharat or Rapid Rail, may pose a serious challenge to the economics of short-distance carriers?
In a country of 140 crore people, there will be a huge demand for transportation. Therefore, I don’t believe that road, rail and air are competitors to each other. These modes are complementary. The choice of a customer will depend on distance, departure time, price point, et al.
