VISION 2040 FOR THE CIVIL AVIATION INDUSTRY IN INDIA
The National Civil Aviation Policy (NCAP 2016) signals the government’s intent to radically alter the sector’s growth trajectory. NCAP’s flagship programme – Regional Connectivity Scheme (RCS or UDAN) is taking flying to the masses by offering subsidised fares as low as $35 for a one-hour flight.
India will become one of the top aviation hubs by 2040. The passenger traffic is expected to grow six-fold to around 1.1 billion. India has one of the largest aircraft order books currently with pending deliveries of over 1000 aircraft. Its commercial airline fleet is likely to grow from 622 in March 2018 to around 2359 in March 2040.
By 2040, India will assemble nearly 70 per cent of its commercial aircraft demand and also export to other countries. India will establish its own aircraft leasing industry which may handle almost 90 per cent of aircraft being ordered in India by 2040.
By 2040, India will witness a boom in usage of drones and helicopters, especially in urban commuting and medical evacuation. With a supportive policy regime, India could become a global leader in research, design and manufacturing of drones and anti-drone systems.There could be over 200 amphibious aircraft located across India’s coastline and waterbodies.
India may have around 190-200 operational airports in 2040. Its top 31 cities may have two airports and the cities of Delhi and Mumbai three each. The incremental land requirement is expected to be around 150,000 acres and the capital investment (not including cost of acquiring land) is expected to be around $40-50 billion.
The government may consider establishing a Nabh Nirman Fund (NNF) with a starting corpus of around $2 billion to support low traffic airports in their initial phases. The concept of land pooling may be used to keep land acquisition costs low and to provide landowners with high value developed plots in the vicinity of the airports.
Ground handling and airport operations will be highly automated and driven by electric ground support equipment. Check-in, bag drop, immigration clearance, retail shopping etc. will be automated, with minimal human
intervention. Indian airports will invest heavily in cloud computing capabilities, which will enable integration of different safety and security data sets such as security camera feeds, facial recognition, luggage scans, security incident reports etc.
Air cargo throughput is projected to quadruple to 17 million tonnes in FY 2040. Cargo processing will be completely paperless and dwell times reduced to just 1-2 hours. India’s freighter fleet is likely to expand multi-fold with the growth in e-commerce. India will gradually become a trans-shipment hub for entire South Asia.
The tax structure for Aviation Turbine Fuel (ATF), Maintenance, Repair and Overhaul (MRO) and aircraft leasing may be gradually aligned with leading global jurisdictions. India’s tax structure and repossession processes will be equally or more attractive than those in leading global jurisdictions. The elitist tag and high tax incidence on GA may gradually go away. A significant course correction in policies, taxation and customs procedures will enable growth of India as a global MRO hub by 2040, handling nearly 90 per cent of the MRO requirements of large Indian carriers.
Over the next 5-8 years, all Indian aircraft will be flying on the satellite-based GAGAN system developed by Airports Authority of India and Indian Space Research Organsation. This will lead to better airspace utilisation and safer operations despite reduced aircraft separation. GAGAN signals will also be used by other sectors like shipping, highways, railways and agriculture etc. India will witness a massive upgrade of its aviation education and skilling infrastructure. Its affordable and high-quality aviation education system will attract students from across the globe.
DGCA may be converted into a fully-independent Civil Aviation Authority, with its own sources of funding and freedom to recruit professionals at market-linked salaries. Most transactions with DGCA will be automated with minimal human interface.