Aviation

Overview

The civil aviation sector has been one of the fastest growing industries in India in the past 3 years. India is currently considered the 3rd largest domestic civil aviation market in the world. The year on year growth in the international and the domestic passenger traffic increased to ~16.5% reaching a total of ~308.8 million individuals while the domestic passenger traffic increased at a rate of ~18.9%. Although the growth numbers are extremely positive, the sector has a large untapped potential with several growth opportunities because air transport continues to remain expensive in India. The FDI policy on Airports permits 100% FDI in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route

 

With the advent of the ‘Make in India’ initiative, the government is trying to localise production of aircrafts in India. Government owned enterprises are also trying to indigenously design and manufacture new regional jet aircrafts and helicopters for both defence and private sector. Earlier the focus was on assembling the aircraft in India but in the recent years there has been a shift from assembling the aircraft to manufacturing the components used in the aircrafts by way of acquisition of foreign technology or by foreign suppliers setting up manufacturing facilities in India.  

Growth Drivers

  • India’s aviation industry is expected to witness ~USD 15.6 billion worth of investments in the next five years.
  • Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers have been completely exempted from customs and countervailing duties
  • India plans to increase the number of operational airports to 250 by the year 2020
  • In India, ~USD 8.6 billion worth of components are purchased every year wherein majority of these components are imported.

Key Players

International

  • Airbus
  • BAE Systems
  • Bell Helicopter
  • Boeing
  • Dassault
  • Honeywell Aerospace
  • GE Aviation

Indian

  • Bharat Forge
  • Hinduja Group
  • Hindustan Aeronautics
  • Mahindra Group
  • Reliance Industries

 

Market Statistics

  • India is the 3rd  largest domestic civil aviation market in the world
  • India’s total passenger traffic stood at ~309 million in FY18
  • There was a growth of 18.28% in the domestic passenger traffic in FY18. Passenger traffic reached ~243 million in FY18 and is expected to touch ~298 million by FY20
  • The domestic freight traffic was ~1.2 billion tonnes while the international freight traffic was ~2.2 billion tonnes in FY18.