Aviation has the potential to overtake Railways in passenger volumes: Scindia

When we started in the Covid environment, the sector was pretty much at a standstill. The sector was experiencing losses of up to $370 billion globally and up to $2.9 billion domestically. All areas of the ecosystem were pretty much in a shutdown mode, and that’s where the journey began. We have gradually opened up domestic civil aviation, reaching 100 per cent by October and international skies was opened in February-March this year and I am happy to note and report that we have almost reached our pre-pandemic levels for domestic and international civil aviation.

Recently, the ATF price hike has had a huge bearing on our cost structure because almost 40 per cent of our cost structure is fuel. And, an industry that is going through huge losses, it also impacts 40 per cent of the revenue. Combine that with the fact that price elasticity is very high, hence an increase in fares would also impact demand. So it’s been a double-edged sword but it’s an area where the sector is maneuvering itself very carefully. In the last two weeks or so, we have witnessed a certain amount of reduction but it’s still a healthy range between 3.3 and 3.8 lakhs a day.

The potential in India is huge, a country of 1.3 billion people. You had close to 144 million pre-pandemic travelers by air which is roughly a penetration of about 10-11 per cent and therefore the potential is huge in the number of travelers we can get to travel by air. The CAGR for airlines is close to 10.6 per cent and for Railways its about 5.6 per cent. I see the potential to see civil aviation outgrowing the Railways potentially in the years to come. But along with passenger traffic, we are also looking at airports and that is an important part of the wheel of civil aviation. We had 74 airports prior to 2014, we added 67 airports and we are adding one more now. So we will be at 141 which is almost double the capacity in eight years. Airports such as Deogarh, Kushinagar, Kishangad, Roopsi, Jhasuguda which were not on the civil aviation map but are contributing to 75,000 to 5 lakh passengers a year. Multiple flights from these smaller airports are full.

On greenfield, the new airports that we are looking at under Udaan, and also new large greenfield airports, such as MOPA in Goa, Jewar which will start with 12 million in 2026, and handle up to 70 million at one point. The second part of the airports is increasing capacity of the current airports.

Delhi today is at close to about 70 million, we will go to 100 million in the next two months add to that the capacity coming on board with Jewar which is 12 million in phase one and 70 million in phase 2. It has the potential to become the busiest airport in the world after JFK and Atlanta. So, Delhi will be at 170 million once it reaches its full capacity with both.

Similarly, for Mumbai, it is at 60 million along with Navi Mumbai, it will go to 80-85 million in the coming years. Ditto with Bengaluru and Hyderabad which have a capacity of 25-30 million going up to about 45 million each. Add to that Kolkata and Chennai both of which are getting new terminals to augment their capacity by 30-40 per cent. So all in all, we are talking about a capacity of 400 million passenger throughput capability just in these six metros alone.

Udan has flown close to 1.9 lakh flights, and it’s close to about 423 routes that are flying today and 1 crore passengers have flown. We are now doing international Udan for which bidding is complete.

Our penetration is very low on the helicopter sector, hence, I have come up with a new policy which has done away with INFC and TLC charges, and parking charges, incentivising them and making sure that we try and put in helipads in every State. We are setting up over five heliports in the country. We have provided 20-25 routes to Uttarakhand and 13 to Himachal in addition to North-East. 

We have also come out with a small aircraft scheme which is for sub-20 seaters or helicopters or seaplanes. But the leasing cost is extremely high which cannot be appropriated for smaller aircraft, so we looked at a third model where we take on the leasing cost as part of the subsidy. The first round of that has also occurred under Udan 4.2 and we are very hopeful to be able to provide this connectivity through seaplanes and smaller sub-20 seater aircraft. 

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