All You Need Know About India Aviation Industry and Their Developments

Abinaya Arangarajan Abinaya Arangarajan
Aug 22, 2021 7 min read
All You Need Know About India Aviation Industry and Their Developments

Everyone affinities to travel in the airline once in their lifetime and two-thirds of people in India have experienced their dreams. We all know, India is renowned for the Civil and Military aviation industry according to the International Air Transport Association.

Starting its Voyage on 18th February 1911 by covering 9.7 kilometers from Jumna River to Nainin and ultimately becoming the burgeon aviation market in the world. Epiphany, India Aviation industry became the blue ribbon and prognosticate to rank third largest aviation market in the world by 2024.

In the remote times, those people who are rich could afford the airline ticket, besides there is not much development made from the side of Indian Aviation industry.

As time ticks away, we are here eventually becoming the fastest-growing aviation market and owning 128 operational airports as of now.

The history of the Indian Aviation industry incipient back in 1911, where the plane was set as a tool to carry out mail across the Yamuna river to Naina. When it comes, domination of aviation- IndiGo stands top of the list, along with Spicejet, Vistara, AirAsia India and Air India.

Furthermore, these six aviation networks connect nearly 80 cities across India and play a vital part in the development of the Indian Aviation Industry. On the other hand, Indian Military Aviation would never let us down in bestowing a major role.

The three crucial constituents of military aviation in India are the IAF, Wings of the Army and the Navy where the Indian Air Force is the worldโ€™s 4th largest air force. As well as, it is stated that the military aviation industry is plotting aerospace research to study the aviation model related hardware and software.

Market Size of Indian Aviation industry
Government Initiatives & Developments in the Indian Aviation industry
Major players in the Indian Aviation Industry
Condition of Indian Aviation Industry In the COVID Pandemic
FAQ

Market Size of Indian Aviation industry

Day by day, the number of travellers in India board gradually accelerated, which is reported as the industry quadrupled in size and expected passengers to be tripled around 560 million by 2037.

Notably, the Indian aviation industry is the third-largest aviation industry in the world and stands 5th largest market regarding aircraft passengers in both domestic and international.

Indian Aviation industry represents oligopoly characteristics and also sees a great impact in 2010- 2019 where a CAGR of 13.4% augment in the domestic passenger traffic, whereas the international grew at a CAGR of 9.3%.

As is the case, the ongoing pandemic lucidly tumours the Indian aviation industry which incurred 2.9 billion in 2020 and 4.1 billion in the current fiscal year 2021-22, where the industry faced a decline in India's passenger traffic.

Government Initiatives & Developments in the Indian Aviation industry

A Scheme for Indiaโ€™s unserved and under-served airports

According to the National Civil Aviation Policy 2016, a scheme has been framed in order to enlighten the connectivity to Indiaโ€™s unserved and under-served airports. Additionally, the scheme also focuses on the price of a one-hour journey to be estimated at around 2500 INR.

Indian Aviation industry may look into Investment upto USD 5 billion

In the next four years, the Indian Aviation industry may look into USD 5 billion worth of investment and anticipate nearly 25 Billion foreign investment to enter the airport sector by 2027.

The report by the government of India permitted 100% FDI on the Indian Aviation industry in order to consolidate the connectivity overseas. We could witness, UK group invest 950 Crore in Turbo Aviation New airline Trustar.

Indian aviation industry set to build water aerodromes

In 2021, the Indian aviation industry is set to build two water aerodromes in Assam and Andaman & Nicobar island to entice tourism as well as GDP. Besides, the government is planning to launch 14 more water aerodromes across India.

Indira Gandhi International Airport

The Indira Gandhi International Airport in Delhi is set to dilate in order to augment passengers, which subsumes new instalments such as Terminal point, additional runway and other advanced facilities.

On the Government side, they are working diligently to maintain the sustainability of the Indian Aviation industry by providing financial services to many airports across the country under the UDAN scheme for advancement and development.

Zurich Airport International to corroborate in development of Jewar Airport

Zurich Airport International is corroborated to design or operate Noida International Airport for the next 40 years on the development of Jewar Airport.

Runways at seven airports across the country

Prior to March 2022, the Airports Authority of India concurred to establish runways at seven airports across the country.

Krishi Udaan scheme

Krishi Udaan scheme is introduced under Union Budget 2021-22, to reduce air pollution by letting 50% for agri-perishable and ameliorate air cargo transportation in North-east states of India.

Market share of Major Airlines in India
Market share of Major Airlines in India

How Do Airline Companies Make Profit?
With travel returning to normal soon, it is interesting to know more about some strategies that the airline companies use to make profit.

Major players in the Indian Aviation Industry

In 2015, 22 airlines were operating in India. The Indian aviation industry has grown so much since then and the top players in the Indian Aviation Industry as of 2020 are:

Interglobe Aviation (IndiGo)

IndiGo is an Indian airline based in Gurgaon, Haryana that offers low-cost travel. The company was founded in 2006 by Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal. The airline is the largest in terms of passengers carried and fleet size with having a domestic market share of 59.24% as of August 2020.

SpiceJet

SpiceJet is another low-cost airline based in Gurgaon, Haryana. The company is the second-largest airline in India by the number of passengers carried and it holds a market share of 13.6% as of March 2019.

The company was established as an air taxi provider and was acquired by Ajay Singh and renamed SpiceJet in 2004 and took off its first flight in May 2005.

Jet Airways

Jet Airways is a Mumbai based Indian International airline founded by Naresh Goyal that started as an air taxi operator in 1993 and became a full-fledged airline in 1995 and started its International flights in 2005.

It was one of the largest Indian airlines with a market share of 21.2% in February 2016. But due to competition and price war, the company underwent a downfall leaving it Bankrupt and forcing the company to cease its operations in April 2019. The company is due to come back at the end of 2021.

Air India

Air India is previously known as Tata Airlines and was founded by J. R. D. Tata in 1932. After 1945, the airline was made into a public limited company and was named Air India.

Air India is headquartered in New Delhi and is owned by the Government-owned Enterprise, Air India Limited. It is the Largest International carrier out of India and holds a market share of 18.6%.


Akasa Airline - Can this Ultra-low-cost airline Redefine Air travel in India?
Rakesh Jhunjhunwala, the Warren Buffet of India, is all set to launch his airline, Akasa Airlines but Can it redefine air travel in India?. Lets find out.

Condition of Indian Aviation Industry In the COVID Pandemic

Indian Aviation Industry consists of both military aviation like Indian Air Force(IAF) and civil airlines like IndiGo. While Government controlled Airlines like Air India, Alliance Air and IAF have been a saviour by carrying medical cargo during these COVID times, the civil airlines have seen a tremendous loss that is estimated to be INR 210 billion in FY 2020-21.

To compensate for the loss, the Centre allowed for a hike in fares of airlines by 30% which only worsened the situation. During April-October 2020, domestic flights had been declining over 70% while International flights have declined at 77%. IndiGo and SpiceJet reported having lost INR 31 crore per day during the first half of 2020.

Conclusion

The COVID pandemic has not only made us cancel our planned trips with friends and family but also has many industries on the brink of a complete shutdown and has made the economies of top countries crumble.

The Indian Aviation Industry was one of the main industries that took a downfall due to the COVID situation around the globe with many countries still not lifting their ban on International travel. And this loss would tremendously affect the GDP of the country as the aviation industry contributes $72 billion to the GDP of India.

It is predicted that the Indian Aviation Industry will bounce back to its pre-pandemic level by 2022 or 2023.

FAQ

What is the Indian Aviation Industry?

Aviation Industry is the business sector in which all types of aircraft are manufactured and operated. According to International Air transportation Association(IATA), Indian Aviation Industry is the fastest-growing aviation industry in the world and is set to be the third-largest aviation market in the world by 2024.

What is the revenue of the Indian Aviation Industry?

The aviation industry in India has seen a loss for the FY2020-21 due to the COVID-19 pandemic. The estimated net loss by ICRA for the fiscal year 2020-2021 was INR 210 billion.

How many branches does the Indian Aviation Industry hold?

The Indian aviation industry is classified into two branches: Civil aviation and Military aviation. Indiaโ€™s aviation manufacturing hub is situated in Bangalore and holds a 65% share of this economic sector.

Must have tools for startups - Recommended by StartupTalky

Subscribe to StartupTalky

Get the latest insights delivered to you right in your inbox

Great! Next, complete checkout for full access to StartupTalky.
Welcome back! You've successfully signed in.
You've successfully subscribed to StartupTalky.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.
Grow your Skills and advance your career with LinkedIn Learning ->