Assignment

On
Aviation future in India

Submitted to: Submitted by:

Mr. Sushant yadav Naveen 2158

Assistant professor 2 nd year

Department of management

Indira Gandhi university ,Meerpur,Rewari

 Aviation future in India

Air India, Indigo, Vistara, Spice Jet, Go Airlines, and Akasa Air are just a few of the 15
scheduled airlines operating in India. According to the ministry's annual report for 2022, they
operated 9.43 lakh scheduled flights in 2022 as opposed to 7.31 lakh in 2021, a 29% increase.

With the entry of Rakesh Jhunjhunwala's Akasa Air into a sector that is already extremely
competitive, the Indian aviation industry is now undergoing change. Now that the
government has abolished the ceiling and floor on airline ticket prices, the sector is likely to
become even more disorganised. This might start a pricing war between the major airlines,
which would lower travel costs for passengers, especially around the holidays. (DEOL, 2021)

What does the future hold for our aviation business as the globe continues to open up and
countries work to rationalise fuel prices? This is explained below. But first, let's list the
airlines that make up the Indian aviation sector. (Press Release, 2022)

List of Indian Airlines

The top Indian airline firms are listed below. Afterwards, we'll discuss them and their market
share for July '22.

Market Share (%) for Indian Airlines

Vistara 10.4 

SpiceJet 8.2

Spice First 8.2

Air Asia 4.6

SpiceJet 8.2

indigo 58.8

(Sharma, 2023)
Current Trends in the Aviation Sector

Travel by Air

India is the third-largest air passenger market in the world after China and the United States.
Almost 166 million of the 189 million passengers in India in FY 22 were domestic travellers,
an increase of 58% from the 105 million passengers in FY 21. Yet, from 10 million to 22
million, or a rise of 118% YoY, compared to FY 21, there were more foreign passengers. The
Indian aviation sector is expected to carry 400 million passengers annually in seven to 10
years. (One, 2022)

Domestic airlines carried 70% more passengers from January to July 2022 than they did over
the same time last year, or more than 6.7 crores, up from 4 crores.

Yet US-based aircraft maker Boeing anticipates that Indian airlines would raise the next year,
increasing their capacity by at least 25%, the aviation industry would see the greatest growth
rate—7% per year—by 2040. ICRA expects domestic traffic to approach pre-covid levels by
FY24. (Dwivedi, 2022)

From FY16 and FY22, even freight traffic saw a CAGR of 2.52%. Airports in India are
anticipated to be able to handle 17MMT of freight by FY40, up from 3MMT at the moment.
(One, 2022)

No. of Airports

Current size is 129 but the government has envisage increasing the no. of operational airports
to 220 by 2030.

Latest in aviation

PM gati Shakti national master plan evisages the creation of system interconnected and multi
modal transportation

Yearend review :2022 ministry of civil aviation

During last 7 years seven more airports were constructed/ declared as international airport

India will become a hub of drone technology

Economic servey2021-22

Also, India has become the third-largest domestic aviation market in the world and is
expected to overtake the UK to become the third-largest air passenger market by 2024. Indian
aviation also contributed 5% of the GDP, creating a total of 4 million jobs.

Fuel prices for Aeroplan turbines (ATF)

Around 45% of an Indian airline's operating costs are made up of ATF. ATF cost about 50%
higher in January. Boeing claims that the fuel costs for Indian airlines are 90% higher than
those of their foreign rivals. ATF petrol is furthermore subject to VAT, which can range from
15% to 30% depending on state tax regulations. The price should be cut to between 1 and 4
percent, according to the civil aviation ministry. (One, 2022)

Also, the ATF pricing lacks enough transparency. Currently, the price is determined using
worldwide import parity pricing, which does not account for the true cost of producing ATF.
State-owned OMCs seek to transition to a benchmark based on the MOPAG (Mean Price
Adjusted Gross) to boost pricing stability. (Mean of Platts Arab Gulf) (Mean of Platts Arab
Gulf) (Majumder, 2022)

Also, the aviation sector is in trouble due to rising debt levels. In FY 2023, they are projected
to total roughly Rs 1 lakh crore. The situation has gotten worse as airlines continue to suffer
significant losses.

Conclusion

Spice Jet has secured loans under the government's ELCGS programme. The majority of
Indian airlines are now operating at a loss and seeking to finance their operations through
debt. But, with economies picking up and people eager to fly once again, the future of the
aviation sector appears promising. The government's efforts to encourage greater investment
in the aviation sector will help them achieve their goals even more.