The Economic Survey emphasises the need to enhance the efficiency and sustainability of airlines while expanding airport capacity to support economic expansion. The survey underscores the importance of collaboration among the government, industry stakeholders, and international partners to bolster Indian airlines and improve long-haul connectivity.
Improving efficiency and viability of airlines
The survey emphasised the critical importance of enhancing the efficiency and viability of airlines in India to maintain a leading position in aviation. It highlighted the need for concerted efforts to ensure environmental sustainability while maximizing the sector’s significant potential. Collaboration among the government, industry stakeholders, and international partners was underscored as essential for achieving these goals.
The survey also stressed the importance of investments in infrastructure, skill development, and sustainability initiatives as key drivers for the future growth of India’s aviation industry.
Growth of MRO sector
The survey highlights the growth of the MRO (Maintenance, Repair, and Overhaul) sector and the expanding drone industry as crucial for the future of aviation services in India. It acknowledges forthcoming challenges, notably the need to comply with international environmental standards like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) starting in 2027.
“The airline industry is a highly competitive segment, susceptible to external shocks, such as oil prices, exchange rates, epidemics, wars, and equipment issues. These shocks can affect the operations of an airline and impact its viability, hence the development of capabilities in segments, such as MRO, leasing and skilling are needed to further support the airlines,” it noted.
Infrastructural upgradations in aviation sector
The survey highlights the government’s dedication, outlining a capital expenditure plan exceeding Rs 26,000 crore from FY2020 to FY2025 aimed at developing and modernizing airports throughout India. It also acknowledges significant investments by the Airport Authority of India (AAI) and other operators, totaling approximately Rs 72,000 crore, aimed at improving airport infrastructure.
“The number of airports in India has more than doubled since 2014. However, there is a need to augment this capacity by adding more airports as well as expansion/upgradation of existing airports in the next five years,” the survey said.