India is preparing for a massive air traffic surge to handle as many as a 100 crore passengers in next 15-20 years, while air travel becomes affordable and airfares drop well below an Uber ride and less than half of an autorikshaw ride. The total number of passenger trips in India are expected to touch 100 crore per year compared with the forecast of about 50 crore trips a year by International Air Transport Association (IATA) in the next 15-20 years, Minister of State for Civil Aviation Jayant Sinha said on Tuesday. He was addressing the media at the International Aviation Summit to talk about the milestone of 50 months of double-digit growth in Indian aviation sector.
“Congratulations to the Indian aviation fraternity for a sustained 50 months of double-digit passenger growth. We are committed to building the ecosystem for a billion trips a year,” Sinha said in a tweet on his Twitter handle. In February this year, Sinha had said that the total number of air passengers in India was approximately 11 crore, which would rise to 20 crore by March-end.
Meanwhile, Sinha reiterated that presently traveling in an auto rickshaw is costlier than air travel in the country. “Today, airfare is less than that of an auto-rickshaw. You’ll ask how is that possible? When two people take an auto-rickshaw they pay fare of Rs 10 which means they’re charged Rs 5 per km but when you go by air you are charged Rs 4 per km,” he said.
In April, IATA had said that Indian aviation industry is on track to clock 50 straight months of double-digit domestic air passenger growth in October 2018 as the near term outlook continues to be bright.
Promoting air travel and making it more affordable for the middle class has been one of the agendas of the Narendra Modi-led government. The government in April 2017 had launched the UDAN (Ude Desh Ka Aam Nagrik) scheme and about 45 unserved and underserved airports were connected under the scheme.
Furthermore, Sinha added that the government is in discussion with GST Council on getting Aviation Turbine Fuel (ATF) under GST. It is notable that the aviation ministry has been demanding for the inclusion of ATF fuel under GST regime. The move is expected to help bring down the cost as airlines, which have been reeling under huge losses, would get input tax credit.
As per the recent study by CAPA India, domestic airlines may incur a combined loss of upto $1.9 billion in the current financial year, mainly on account of rising fuel costs and low air fares. CAPA India believes that air fare have not risen to compensate the higher costs and except Indigo, no other airline in the country has strong enough balance sheet to withstand higher costs and lower yields.