Indian aviation has potential to become world’s No 1 by 2030

A Ficci-KPMG report seeks conducive policies and regulatory framework for the crucial sector to take off in a big way

• At present, Indian civil aviation industry is among the global top 10
• Indian carriers look to double their fleet by 2020 to 800 aircraft
• Aviation jobs to rise from 62,000 in FY-11 to 117,000 by FY-17
• Asia Pacific region likely to emerge as largest aviation market by 2032
• MRO market size is estimated to be about $700 million

Hyderabad: Indian civil aviation industry, currently among the global top 10 with a size of around $16 billion, is capable of becoming world’s third largest aviation market by 2020 and global number one by 2030 as there is a large untapped market in the country, a Ficci-KPMG report revealed. The report titled ‘Enhancing Air Connectivity’ released at the Indian Aviation 2014 exhibition here on Thursday stated the phenomenal growth in India would be witnessed due to the fact that access to aviation still remained a dream for nearly 99.5 per cent of the country’s population. “In order to become a top aviation market, all round improvements are required in airports, air navigation, cargo, MRO, general aviation and human resource development. Besides, policies and regulatory framework need to be futuristic, pro-active and aligned to stakeholder expectations,” it explained.

According to the report, the country’s aviation sector is on a high growth trajectory now, albeit with minor hiccups. It has ushered in a new wave of expansion driven by Low Cost Carriers (LCC), modern airports, Foreign Direct Investments (FDI) in domestic airlines, cutting edge information technology (IT) interventions and a growing emphasis on no-frills airports (NFA) and regional connectivity.

"India is blessed with a great geographic location, a large upwardly mobile middle class and immense tourism opportunities. We have just touched the tip of the aviation iceberg,” said Amber Dubey, Partner and India Head of Aerospace and Defense, KPMG, a global consultancy firm.

He however cautioned against challenges such as problems related to policies, procedures, regulations and taxes which had been hindering progress of the crucial sector. “These are all man-made problems and hence can be surmountable. The central government and the eastern states have brought in many reforms in the aviation policy, procedures and taxation. We hope this trend continues and spreads to other states in the country", he added.

The report notes that the next generation of aviation growth in India will be triggered by regional airports. At present, there are around 450 used, unused and abandoned airports and airstrips across the country, which can be developed for promoting air connectivity. Besides, several Tier 2 and 3 cities are still unconnected or underserved.

The report further stated that the most significant development in the Indian domestic market was the growing dominance of the low-cost carrier model, which in FY-13 accounted for almost 70 per cent of the domestic capacity. LCCs have driven the growth in aviation and tourism through low fares, introduction of regional routes and periodic discount offers. Full service carriers plan to shift more seats to their low cost offerings in line with market trends. Indian carriers plan to double their fleet size by 2020 to around 800 aircraft,” it added.

As per KPMG estimates, the total manpower requirements of airlines are expected to rise from 62,000 in FY-11 to 1.17 lakh by FY-17. Overall, the aviation sector will need about 3.5 lakh new employees to facilitate growth in the next decade. The report also underlined the need for an increased focus on maintenance, repair and overhaul (MRO) segment whose current size is pegged at $700 million.