India's aviation sector ready to take off
Can the Indian aviation sector fly high once again? This is the question uppermost in everybody’s mind. With the pandemic waning out and skies opening up, the revival of the aviation sector looks bright. The Government of India on its part is offering incentives to tourists with a free visa for 5 lakh tourists till March 31, 2022.
Though the aviation sector is high risk and several players are struggling to survive, the domestic traffic in India has doubled from 61 million in 2013-14 to 137 million in 2019-20 registering a growth of over 14 per cent per annum as per the economic survey released by the Government of India.
One of the reasons for the optimism of revival of aviation sector is the rising middle class in India and the aspiring youth who form a majority of the population.
The Government is also keen on improving air connectivity and giving a boost to privatization, modernization and expansion of airports. Under the Regional Connectivity Scheme (RCS) of UDAN programme of the Government, 153 airports including 12 aerodromes and 36 helipads have been identified for operation.
It is not easy for the sector to bounce back due to rising fuel price. Aviation turbine fuel accounts for 40% of the cost of running an airline in India. The estimated losses incurred by airlines and airports in India in the financial year 2020-21 is approximately Rs 19,564 crore and Rs 5,116 crore, respectively. Also, during the pandemic period, domestic air passenger traffic declined by 0.3 per cent (2019-20) and by 61.7 per cent in 2021. However, experts in the industry say that the sector will bounce back as all sectors of the industry are witnessing growth.
After almost two years, regular international flights resumed on March 27, 2022 and 1,22,195 passengers flew internationally. The peak season for air travel is between March and June and the next few months will show if the aviation sector will hit sky high.
