Aviation set to take off under Modi government

There is a tide in the affair of men, which taken at the flood, leads to fortune! – William Shakespeare

Finally, the Indian Aviation sector is having its moment in the sun!

India is going to overtake Great Britain as the fifth largest economy in the world, in nominal GDP terms and in keeping with the overall growth trend, this year our airline sector is set to become the third largest in the world with around 450 airplanes already plying across the skies and another 900 new airplanes on the order books. In the next 10-15 years, we will overtake China and US in passenger movement per year.

Before 1960, India had just 18 functional airports, including the ones in metros. For the next 50 odd years the total number of airports added was just 80, at an average of approximately 2 or less airport being constructed per year. It therefore suffices to say that under successive governments the aviation sector was allowed to persistently stagnate for the last 50 years.

In 2016 the number of airports stood at 98, and by end of 2017 this figure had grown to 131. Even after this, if one were to look at the number of airports that we have, compared to some of our developed peers, we will realize that we have a huge gap to fill.

CountryNominal GDPNo. of cities with >10,000 peopleNo. of Total AirportsAirport for every 100 cities
USA$19.42 trillion30355194171
China$11.8 trillion81244254
Japan$4.84 trillion74314419
Germany$3.42 trillion163033020
UK$2.5 trillion63730648
India$2.45 trillion29371316

Even a cursory glance would reveal that our city (housing 10,000 people and above) to airport ratio is very low. Smaller countries such as Japan, Germany have a higher number of airports per 100 cities. What it means is that we have the potential to grow our airport infrastructure by around 300% without saturating it.

The aviation sector in India last year registered a growth of 17.69%. Over the next few years, this rapidly growing aviation sector is slated to create around 4 million jobs. Given that for every 100 jobs generated by aviation, there are another 610 jobs generated in dependent industries, overall creation of around 4 million jobs in aviation sector would in turn lead to a creation of around 25 million jobs across dependent sectors, industries and businesses.

Large number of jobs in this sector, would in turn, lead to a rise of regional economy and growth of other sectors such as tourism, providing employment to millions of jobless youth, who would otherwise be migrating to larger cities, metros, thereby straining the urban infrastructure. Aviation, apparently, is a great disrupter of the urban migration cycle too!

This government, therefore, has realized what a great enabler this sector can be. Just last week the prime minister laid the foundation stone for Mumbai’s second airport, an airport that took 50 long years to graduate from an idea.

The government has shown additional intent, to ride the aviation tide through various other measures. Why else, one could argue, would they move someone of the calibre of Jayant Sinha to this sector. Predictably there have been a slew of reforms that have been unleashed since then. Some of these are enumerated below:

Announcement of the National Civil Aviation Policy:

In June 2016, for the first time in India an integrated Civil Aviation policy was launched with an aim to promote aviation and tourism. Under this policy there was a concerted plan to revive no-frill airports with a cost outlay of 50 to 100 crores per airport!

The Udan or Regional Connectivity Scheme:

Launched in October 2016, this aims at taking aviation to the masses through regional connectivity and no-frill airports.

Under this scheme the cost of certain percentage of seats will be capped at Rs.2500/- and the gap in revenue for the operator will be funded by central and state govt through the viability gap funding program.

Under Round 2 of the Regional Connectivity scheme, already 325 airport routes have been awarded to airlines and helicopter services, with an intent to service remote and hilly areas.

Funding for airport development:

Airport operators will spend $3.5 billion for brownfield(existing) expansion in Delhi, Mumbai, Bangalore, Hyderabad and another $3.3 billion for greenfield (new) airport development over the next few years.

Infrastructure development:

As a part of the infrastructure development, 160 airports in the country are being revived.

In addition to this, 13 cities have been identified to develop a Common User Domestic Cargo Terminal, for providing a range of cargo handling services under one roof!

Delhi shall be developed as an Aviation Cargo Hub for both domestic and international cargo.

New development work will also commence at Lucknow, Deoghar, Rajkot and Allahabad airports.

An integrated passenger terminal building equipped to handle 6.35 million passengers per annum is scheduled to come up at Lucknow Airport.

Highway cum Airstrips:

Starting this year, Mr. Gadkari’s ministry will be constructing 17 highway-cum-airstrip on priority basis. These highways are designed to serve the purpose of airstrips whenever required.

Skill development:

Needless to say, that all this infrastructure development and strategic initiative will be of no use without the presence of skilled manpower to run the show. The government is therefore looking at Skill India initiatives to ramp up the labour pool to meet the needs of the aviation sector.

To a bystander it seems pretty obvious that aviation has fired the imagination of our prime minister, finding mention in his subsequent speeches. The only question that remains to be answered however, is how much time will it take before the industry reaches cruising altitude. Meanwhile, it is time for us to fasten our seat belts and keep our tray tables in an upright position while we move into a new orbit!

References:

https://thegeographist.wordpress.com/2016/04/07/largest-cities-uk-population/

http://worldpopulationreview.com/countries/china-population/cities/

https://www.statista.com/statistics/241695/number-of-us-cities-towns-villages-by-population-size/

http://chartsbin.com/view/1395https://en.wikipedia.org/wiki/List_of_airports_in_Japan

https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_03.html

https://www.investopedia.com/articles/investing/022415/worlds-top-10-economies.asp

 

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