Economic Survey 2023 | India's civil aviation sector booms with 'great potential' — air travel rebounds

The country's civil aviation industry has "great potential" because of rising middle-class demand, increased disposable incomes, and favourable demographics. Air travel has also recovered since the relaxation of the coronavirus pandemic-related curbs, according to the Economic Survey.

The survey for 2022-23, tabled in Parliament on Tuesday, listed various factors that are helping the civil aviation sector, including the UDAN scheme, which has considerably enhanced regional connectivity through the opening of airports in the hinterland.

Under the UDAN (Ude Desh ka Aam Naagrik) scheme, which is aimed to facilitate/ stimulate regional air connectivity by making it affordable, the total number of tourism routes has increased to 59 and presently, 51 are operational.

"The civil aviation sector in India has great potential owing to growing demand from the middle class, growth in population and tourism, higher disposable incomes, favourable demographics, and greater penetration of aviation infrastructure," the survey said.

With the containment of COVID-19 infections and the lifting of travel restrictions worldwide, the survey said, air travel has rebounded.

While in FY21, there was a considerable decline in air traffic — a fall of 54 percent — and passenger traffic handled — a decrease of 66 percent — last financial year witnessed a recovery.

"The current financial year has further shown a rebound, with both passenger and cargo movement close to the pre-COVID-19 levels. The total number of passengers carried in December 2022 stood at 150.1 lakh, which was 106.4 percent of the pre-Covid level (average for 11 months from April 2019 to February 2020)."

"During November 2022, total air cargo tonnage stood at 2.5 lakh MT, which is 89 per cent of the pre-Covid levels," the survey said.

The government has also approved Rs 4,500 crore for the revival of existing unserved/ underserved airports/airstrips of the state governments, Airports Authority of India (AAI), public sector undertakings and civil enclaves.

In-principle approval has also been granted for the setting up of 21 greenfield airports.

More than one crore air passengers have availed themselves of the benefit of the UDAN scheme since its inception.

An amount of Rs 104.19 core has already been reimbursed to the Airport Authority of India in the form of viability gap funding (VGF) during FY21 and FY22 towards the UDAN.

While mentioning bank credit, the survey said there was a decline in credit to shipping and aviation.

"Uncertain growth prospects in the global markets and uneven credit allocation to the transport sector led to a decline in credit to the shipping and aviation sector by 7.9 percent and 8.7 percent, respectively, in November 2022," it said.

The survey noted that sectors like inland water transport and civil aviation that have significant untapped potential are also being encouraged sufficiently.

Parallelly, the focus is also on improving coordination among different stakeholders and ministries. This will help resolve compliance issues and increase the efficiency and effectiveness of investments, it added.

In her first address to the joint sitting of the Parliament on Tuesday, President Droupadi Murmu said India has become the third largest aviation market in the world and is growing rapidly, with the number of airports increasing to 147 from just 74 in 2014.