The Indian aviation sector has witnessed remarkable growth and transformation in 2024, driven by strategic government policies, infrastructure development, and a commitment to innovation and sustainability. The Ministry of Civil Aviation’s (MoCA) Annual Report 2024 provides a comprehensive overview of these achievements, highlighting key trends and developments that are shaping the future of Indian aviation. This article delves into the report’s key highlights, analyzing their implications for the industry and potential opportunities for investment and M&A activity.
Strategic Policy Initiatives
A significant milestone in 2024 was the passage of the Bharatiya Vayuyan Adhiniyam, 2024, a legislative reform aimed at modernizing India’s aviation sector. This act replaces the colonial-era Aircraft Act, 1934, aligning Indian aviation regulations with contemporary needs and global standards. The Adhiniyam addresses the need for clarity, efficiency, and ease of doing business in the aviation industry.
Another pivotal policy is the continued success of the Regional Connectivity Scheme (RCS-UDAN), a key component of the National Civil Aviation Policy (NCAP), 2016. This scheme aims to create affordable and economically viable air travel on regional routes. The report highlights the following achievements of RCS-UDAN:
- Operational Routes: 619 RCS routes connecting 88 unserved and underserved airports have been operationalized.
- Passenger Growth: More than 148 lakhs passengers traveled through RCS-UDAN, connecting 2.94 Lakh RCS flights.
- Viability Gap Funding (VGF): INR 3933.36 Crore disbursed by RACFT to Selected Airline Operators (SAOs).
Infrastructure Development
A significant focus of the MoCA has been on developing and upgrading airport infrastructure across the country. The report highlights several key projects:
- New Terminal Buildings: Inauguration of new terminal buildings at Tiruchirappalli International Airport, Dehradun Airport, and 12 other airports, with a combined capacity to serve more than 6 Crore passengers annually.
- Greenfield Airports: Government of India has accorded ‘In-principle’ approval for setting up of 21 Greenfield Airports across the country, with 12 already operationalized.
- Expansion and Upgradation: Significant upgrades and developments in airport infrastructure at various airports, including modernization of runways, aprons, and taxiways.
- Airports on 100% Green Energy: As on 31.12.2024, 80 airports have switched over to 100% green energy usage.
Passenger and Freight Traffic
The Indian aviation sector has witnessed substantial growth in both passenger and freight traffic. The report highlights the following trends:
- Domestic Passenger Growth: Scheduled domestic airlines operated a total of 10.6 lakh flights carrying 153.7 million passengers, a growth of 13% compared to the previous year.
- International Passenger Growth: 66.8 million passengers were carried on international routes, a growth of 22.3% compared to the previous year.
- Freight Growth: The report does not contain figures for the current year but is likely to have increased on the trends of past years.
Table: Key Traffic Statistics (FY 2023-24)
| Category | Volume (Millions) | Growth (%) |
|---|---|---|
| Domestic Passengers | 153.7 | 13% |
| International Passengers | 66.8 | 22.3% |
Chart: Domestic and International Passenger Traffic Growth
(A bar chart would visually represent the growth trends in domestic and international passenger traffic over the past few years. It should show the consistent and upward trend).
Investment in Airport Infrastructure
In 2024 The National Infrastructure Pipeline (NIP) has envisaged CAPEX of more than Rs. 91,000 crore for airport infrastructure development. The financial outlay for the period is divided into share of AAI that is Rs 25,000 crore and the remaining expenditure is to be borne by Airport Developers under PPP mode. The expenditure till December 2024 amounts to approx. Rs. 84,300 crore has been incurred under NIP.
MRO Sector Development
The government has introduced several policies and regulations to bring India’s MRO sector at par with global peers and support growth of MRO industry in India. MRO Sector will continue on this growth trajectory with Uniform GST and increased operational timelines for good import/export. In line with growth the Directorate General of Civil Aviation (DGCA) and its expansion of aviation activities like licencing, traffic handling and more is essential.
Other Key Highlights
- Digital Initiatives: Digi Yatra has been launched at 24 airports, providing a seamless and paperless journey experience for passengers.
- Drone Technology: Significant milestones have been achieved in the drone sector, with increasing authorizations and Unique Identification Numbers (UINs) generated.
- Green Aviation: Commitment to achieving Carbon Neutrality & Net Zero, with 80 airports switched over to 100% green energy usage.
- Airspace Efficiency: Implementation of Flexible Use of Airspace (FUA) has led to significant savings in flight time, fuel usage, and reduction in carbon emissions.
Implications for Aviation M&A
The positive trends and strategic developments highlighted in the Annual Report 2024 have significant implications for M&A activity in the Indian aviation sector:
- Increased Investor Confidence: The government’s commitment to modernizing and developing the aviation industry is likely to attract further investment from both domestic and international players.
- Opportunities in Regional Aviation: The success of RCS-UDAN creates opportunities for investment in regional airlines and related infrastructure.
- MRO Sector Growth: The government’s focus on promoting the MRO sector presents opportunities for M&A activity in this segment.
- Demand for Infrastructure: The ambitious plans for airport infrastructure development will drive demand for construction and engineering services, creating opportunities for companies in this sector.
- Technological Innovation: The increasing focus on digitalization and automation will drive demand for technology solutions in the aviation industry, creating opportunities for tech companies and investors.
Conclusion
The Indian aviation sector is poised for continued growth and transformation in the coming years. The Ministry of Civil Aviation’s Annual Report 2024 provides valuable insights into the key trends and developments shaping the industry. By understanding these trends and leveraging the opportunities they present, investors and businesses can capitalize on the significant potential of the Indian aviation market.
