INTRODUCTION

The term AVIATION is mostly referred to denote mechanical air transportation, comprising
primarily of aircrafts and helicopters and in recent years covering technological
advancements like drones. The Aviation industry is centred around the same, encompassing
all aspects of air travel and related activities that facilitate it. A partial segment of this is
narrowed down and forms the AIRLINE industry.
The Indian Aviation industry can be traced back to 1912, when the first aircraft took flight
from Karachi to Delhi, opened in association of Imperial Airways and under the name of
Indian Air Services. The 20th century was dominated by government owned aircrafts, owing
to the restrictive economic policies of the country. However, with the opening of economy to
private and foreign players, and the adoption of the Open Sky Policy, private players started
entering the field from the 2000s. Over two decades, the industry has seen a tremendous
growth pattern, becoming one of the fastest growing industry of the country during the past
three years. It has become the third largest domestic aviation industry in the world and on
track to overtake UK to become the third largest passenger capacity holder in coming couple
of years.
Looking at the quantitative figure, the passenger traffic has grown at a CAGR of 11.3%
during FY16 – FY20, domestic growing at a rate of 12.91% and international at 5.01%, with
a 5.32% credit going to freight traffic growth. The below infographic from AAI shows
movement data of different types of crafts currently operating in India.

Activity in AAI Airports

83.30% 80.50%
90.00%
80.00%
70.00% 60.18%
60.00%
50.00% 39.80%
40.00%
30.00% 16.69% 19.51%
20.00%
10.00%
0.00%
Aircraft Movt Passenger Traffic Freight Traffic

In order to cater to this upsurging growth and demand for crafts, the government has actively
been monitoring the sector and introducing new crafts, facilities, investments and
opportunities, in order to ensure smooth and efficient growth. The table below shows the no
of crafts, pads and scheduled and non-scheduled flights that operate in the country as of now-
 Scheduled Airlines Distance Flown 1549.7 Million km

Non-Scheduled Airlines 72

Air Passengers 341.05 Million

No of Aircrafts 680

No of Airports 153

Cargo Handled 3.33 MMT

However, this steep and profitable growth of the sector has been possible only because of the
advantages that India offer backed up by the supporting government policies, initiatives an
investment. Few of the most prominent among them are as follow –
1. Robust Demand – Owing to immensely huge population of the country, there is a
huge increase in the working-class group with a widening in the middle-class
demographic. Giving a boost to opportunities in the sector

2. Increasing Investments – With contracts and negotiations in place, the Indian aviation
industry is expected to receive an investment of Rs 420-450 Billion, targeted to cater
to projects like the Jewar Airport, runways upgradation, facilities augmentation,
TruStar Airlines, setting up of aerodromes in Andaman and Nicobar Islands etc

3. Policy Support - The government has undertaken many initiatives and policies to
ensure the sectors growth –

a. Open Sky Policy – encompass the bilateral agreements between two countries
that negotiate and establish routes for efficient and smooth international
passenger and freight travel

b. 100% FDI – with foreign investments of up to 49% and 100% FDI, the
government has successfully increased the number of scheduled flights taking
place and development of new greenfield projects in many states with an
investment value od Rs. 1405 Crore

c. UDAN - under which the government has started 78 new routes to enhance
connectivity to remote areas and catered to medical assistance and
requirements under its Lifeline Udan wing to help fight Covid-19

4. MRO – With the second highest expenditure after fuel and accounting for 12-15% of
total revenue, this segment has attracted a lot of investments and future setup of new
factories and warehouses, coupled with the increase in manpower and passengers, is a
huge boost to the sector.