By Vijay Grover
India stands firm as the third-largest aviation market in the world, with vast potential to add a much greater footfall and have an even bigger market size. Forecasts by the International Air Transport Association (IATA) predict a 5.8% compound annual growth rate (CAGR) for India’s commercial aviation sector over the next 20 years. Projections by the Federation of Indian Chambers of Commerce and Industry (FICCI) suggest the country’s air traffic could reach 960 million by 2033, nearly tripling the 2020 figure.
The country’s growth has sparked an increase in the demand for passenger and cargo aircraft, with Boeing and Airbus predicting a need for 42,000 and 37,400 aircraft by 2037.
India’s per capita air travel holds vast growth potential, standing in contrast with other developed and developing economies. This underscores the urgency for infrastructural upgrades. Interestingly, India stands out among Brazil, Russia, India, China, and South Africa (BRICS) due to its lack of indigenous civilian aircraft manufacturing capabilities. This is despite the burgeoning market and the historical presence of an aircraft production facility at Hindustan Aeronautics Limited (HAL). This situation could give India the dubious distinction of being the world’s top importer of civilian aircraft.
Addressing this challenge, the Indian government is promoting the indigenous development of Regional Transport Aircraft (RTA). An allocation of INR 10,000 crore has already been earmarked for the RTA project under a Special Purpose Vehicle (SPV), in line with the Ude Desh ka Aam Naagrik (UDAN) initiative, which aims at making air travel affordable. An inter-ministerial task force, revealed in a 2018 report, has been established to assess the feasibility of the RTA project, which was initially launched by National Aerospace Laboratories (NAL) and HAL in 2007.
HAL exited the project in 2015 due to NAL’s early failures. However, despite previous setbacks, India’s renewed focus on RTA development could potentially put it among nations that manufacture such aircraft, like the United States, France, and China. Even China has begun exporting its COMAC C919.
NAL is at the forefront of civilian aircraft development, with the Council of Scientific and Industrial Research (CSIR) overseeing the project. The focus, presently, is on three designs – the RTA, Saras MK II, and Hansa. Although the progress has been muted, it has earned the anticipation of the aviation sector. There is optimism as the government, under Prime Minister Narendra Modi, seeks to invigorate the industry.
In a recent interview, Dr Abhay A. Pashilkar, Director of CSIR-NAL, disclosed that India’s first ‘clean sheet’ design of the RTA would require an estimated $2 billion in funding. An SPV will oversee the design phase, set to conclude in September, with NAL, HAL, and DRDO actively engaging domestic and international private partners for efficient execution. Once the design phase completes, a detailed project report will be presented to the government for approval, paving the way for full-scale engineering development.
The call from PM Modi for indigenous commercial passenger aircraft production aligns with recent developments, such as the approved land allotment for a partnership between Tata Advanced System Limited (TASL) and Airbus Defence and Space to manufacture C-295 Military Transport Aircraft. This underscores the drive towards domestic production.
Parallelly, other NAL projects, namely Saras MK II and Hansa, are progressing. The 19-seat Saras MK II, intended for regional connectivity, is in the detailed design phase, with manufacturing and prototype development due to start next year. HAL is expected to produce 15 SARAS MK II units post-certification. The Hansa light trainer aircraft, geared towards addressing the demand for commercial pilots, awaits its final type certification from the Directorate General of Civil Aviation (DGCA).
These strategic initiatives align with the predicted expansion of India’s commercial aviation sector. The Indian aviation industry is set to contribute significantly to India’s per capita GDP growth over the next decade. Output and employment multipliers of 3.25x and 6.1x suggest every INR 100 of aviation output could generate INR 325 of economy-wide demand, and 100 aviation jobs could result in 610 overall jobs.
The Ministry of Civil Aviation (MoCA) has launched several programmes to accommodate this projected growth, including plans to increase the number of airports from 140 to 220 by 2025. Since 2014, India has built 66 new airports and currently operates 16 major ones, with plans to expand this number to 45 by upgrading 26 brownfield airports and building four new greenfield ones.
While India’s economic activities have historically concentrated in a few urban clusters. There is a wind of change in the aviation sector. Utilising the power of the huge population to increase the market size means that citizens of Tier 2 and Tier 3 cities must be brought into the fold. As the middle-class population grows and infrastructural improvements and increased internet usage continue, these cities are attracting more residents.
Although the majority of air traffic is still handled by the top 10 to 15 airports, smaller airports are beginning to handle an increased share. Recognising this trend, the Civil Aviation Ministry is focusing on expanding and modernising the nation’s aviation network, particularly in Tier 2 and Tier 3 cities, with plans to operationalise 100 more airports within the next five years.
In April 2023, MoCA launched the fifth round of the Regional Connectivity Scheme (RCS) – UDAN, aimed at enhancing connectivity to India’s rural and regional areas. This initiative forms part of the government’s broader strategy to improve last-mile connectivity and democratise air travel. The scheme has shown significant progress, with over 12.3 million passengers flown on flights under RCS UDAN since its inception, as confirmed by General (Dr) V. K. Singh (r), the Minister of State for Civil Aviation in a written response to a question in the Lok Sabha on 20 July 2023.
Consequently, new regional players have shot to the limelight in recent years.
Enter New Regional Players…
Star Air, for instance, has already established a strong network across 17 destinations. In a bid to foster enhanced connectivity within the country, this airline is facilitating easy travel between cities such as Ahmedabad, Bhuj, Jaipur, Jamnagar, Mumbai, Tirupati and others.
While this airline covers West and South India, another significant player in the industry, is making waves in the eastern part of the country. IndiaOne Air is operating flights to five destinations, including Cooch Behar, Kolkata, and Jamshedpur.
Flybig, too, is expanding operations to 11 destinations via 24 daily flights. The airline unveiled plans for further expansion into North India last month at the Paris Air Show. It announced it would extend its service to regions like Uttarakhand, Uttar Pradesh, and Punjab. With the impending addition of Dehradun, Pithoragarh, and other locales, Flybig’s growth trajectory is on a steadfast rise.
Goa-based Fly91, which is expected to start commercial operations later this year, is planning to operate with a fleet of ATR 72-600 to cater to unserved and underserved Tier 1 and 2 cities. JettWings Airways, headquartered in Guwahati, is set to be another new entrant in the sector. It recently received the No Objection Certificate (NOC) for operating Scheduled Commuter Air Transport Services in India. The airline aims to initially serve the Northeast and Eastern regions.
Challenges On The Horizon
Despite this progress, several challenges hinder the full realisation of UDAN. These include delays in land acquisition due to state government inefficiencies, new operators struggling to obtain Schedule Commuter Operator permits, Coastal Regulation Zone (CRZ) and Environmental Clearances challenges, unavailability of suitable aircraft, long lead times for small aircraft deliveries, difficulties in obtaining spare parts from international markets, and leasing issues.
Furthermore, infrastructural developments under the jurisdiction of the State Government, Union Territory, or Public Sector Units have occasionally failed to meet scheduled deadlines.
The MoCA has claimed it has instituted stringent monitoring protocols to ensure the timely completion of upgrade works and to resolve operational bottlenecks at airports.
Outlook For RTA, RCS
The Indian aviation industry is undergoing an exciting transformation. With the rapid expansion of the country’s middle class, a growing economy, the mushrooming of new regional airlines dedicated to underserved routes, indigenous RTA efforts, and government commitment to enhance air travel, the sky is indeed the limit.
Despite challenges, there’s every reason to believe that India’s air travel revolution will continue to gain momentum, given the broad government support, the resilience of its people, and the relentless pursuit of progress.
Vijay Grover is the Editor of Indian Aerospace & Defence
