Cheap fuel, easier FDI rules have put wind under aviation sector

Our Bureau New Delhi | Updated on January 20, 2018


Increase in domestic and international traffic is also driving the sector’s growth

The fall in aviation fuel prices spells good news for domestic carriers, according to the Economic Survey 2015-16. Aviation fuel accounts for nearly 40 per cent of the operating expenses of airlines in India.

Easing of FDI policies in civil aviation and strong growth in passenger traffic also bring cheer, said the Survey.

Era of expansion

It said the civil aviation industry is experiencing a new era of expansion, driven by factors such as increased private participation under the private-public partnership (PPP) model, development of greenfield airports, restructuring and modernisation of existing airports and an increase in low-cost carriers.

Major initiatives have been taken to augment airport infrastructure, said the Survey.

This includes providing ‘in-principle’ approval for setting up a new airport at Dholera (Gujarat), and providing ‘site clearance’ for setting up new airports at Bhiwadi (Rajasthan), Bhogapuram, Dagadarthi and Oravakallu (Andhra Pradesh). In addition, greenfield airports at Mopa in Goa, Navi Mumbai , Shirdi and Sindhudurg in Maharashtra, Shimoga, Hassan and Bijapur in Karnataka, Kannur in Kerala, Pakyong in Sikkim, Holongi in Arunachal Pradesh, Datia in Madhya Pradesh, Kushinagar in Uttar Pradesh and Karaikkal in Puducherry are at various stages of planning/execution, the Survey said.

It added that the development of small airports in tier II and III cities such as Hubli and Belgaum (Karnataka), Kishangarh (Rajasthan), Jarsuguda (Odisha) and Tezu (Arunachal Pradesh) is progressing.

The Survey showed that in April-November 2014, 10.85 crore domestic passengers and 3.52 crore international passengers used Indian airports while domestic air traffic increased 20.4 per cent and international passenger traffic by 7.8 per cent.

Published on February 26, 2016

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