Aviation Sector - India's Outlook on the Aviation Sector 2022

Introduction

Aviation is the activity surrounding mechanical flight and the aircraft industry. In India, Aviation is categorized as military and civil aviation. These are the two major airspace users in the world. Private, commercial, and government-owned aircraft primarily transport cargo and passengers fall in the civil aviation category. Military aviation includes state-owned aircraft engaged in transport, training, security, and defence. 

Aviation is one of the most effectively used modes of transport in the current scenario. Both aviation sectors are essential for the development of economies and stability across the globe.

The Indian Aviation sector has undergone a huge evolution from the year 2000 to 2019. The below table and pie chart represent the change in figures in every domain. The number of scheduled airlines went more than double and non-scheduled ones got multiplied by nearly three times. The number of aircraft in use by the sector increased from 225 to 680 in number. There is a huge increment in the number of operating airports from merely 50 in 2000 to 137 in 2019.

Evolution of Indian Aviation Sector

Evolution of The Indian Aviation Sector
2000
Scheduled Airlines	199
Non-Scheduled Airlines	39
No of Aircrafts	225
Cargo handled	7300
No of Operational Airports	50
2019
Scheduled Airlines	506.1
Non-Scheduled Airlines	106
No of Aircrafts	680
Cargo handled	3560.02
No of Operational Airports	137

The segmentation of the aviation sector evolved through the years 2000 to 2019. As represented by the tables and the graphs, the segmentation of both scheduled as well as non-scheduled airlines has increased over the years. However, the share of cargo declined. 

Growth of Aviation Sector

The aviation sector has been growing at a good pace around the world including India as an integral part.

The below table and graph show the growth of passenger traffic from the year FY-16 to FY-20. The trend has been increasing in terms of both domestic as well as international passengers. The number of domestic passengers increased from 168.89 million in FY-16 to 274.5 million in FY-20. The number of international passengers increased from 54.72 million in FY-16 to 66.54 million in FY-20.

Passengers (year-wise)- in millions
Financial Year	International	Domestic
FY 16	54.72	168.89
FY 17	59.29	205.68
FY18	65.48	243.28
FY 19	69.48	275.22
FY 20	66.54	274.5

Cost of Indian Aviation Sector 

The Indian Aviation sector incurs a sphere of costs to run the industry which includes the cost of fuel, user charges, price of ticket sales, and many more expenses. The following table shows the approximate cost structure of the aviation industry in India during the year 2018-19. The highest expenditure, around 38%, is done on Fuel whereas the lowest, around 2%, is done on Pax services. 

The approximate cost structure of the aviation  industry in India, 2018-19
Flights Equipment Maintenance & Overhaul	8.80%
User charges	8.60%
Ticketing Sales and Promotion	2.40%
Other Expenses	10.00%
Depreciation and amortization	3.50%
Flight Crew Salary & Expenses	4.90%
Pax Services	2.00%
Fuel	37.40%
Rentals of Flight Equipment	14.60%
General and Administrative	7.80%

Government Initiatives

UDAN- Ude Desh ka Aam Naagrik

UDAN is a scheme launched by the Government of India for common citizens of the country. It is a program under Regional Connectivity Scheme (RCS). UDAN aims to make travel by air affordable in all sections. Moreover, it is dedicated to improving job growth in the industry, developing air transport infrastructure, and boosting the economy. 

UDAN is the first of its kind innovatively designed scheme for unifying India by enhancing air connectivity.

In a single year, the two stages of UDAN are anticipated to generate around 33 lakh RCS seats (airfare capped) via fixed-wing aircraft and 2 lakh RCS seats (airfare capped) via helicopter operations. As a result, 35 lakh additional seats at market rates will be available to travellers.

The central government is planning to open 100 additional airports by 2024, as part to retrieve the economy of the country. They plan to start 1000 new routes connecting small towns and villages. 

Conclusion 

The aviation sector is a large sector not only in India but across the world. The civil aviation industry in India has emerged as one of the fastest-growing industries in the country during the last few years. The scope for growth in this sector is immense. 

The aviation sector has been growing at a good pace around the world including India as an integral part.  

Government and government-owned airlines also have a delegate role in the industry. 

Aviation i.e. air-driven vehicles have their stand in the market and have supremacy in terms of services offered over the competitors. 

Written by-Srishti Kumar