India on way to become 3rd largest aviation market by 2020

The FICCI-KPMG ‘India Aviation Report 2016’, launched at the civil aviation exposition in Hyderabad, reveals that with 81 million trips, India’s domestic aviation market grew at over 20.3% during January to December 2015-the highest growth rate recorded in the world. It further said that India is well on its way to become the third largest aviation market by 2020, owing to increasing disposable incomes, fall in prices of Aircraft Turbine Fuel (ATF), increase in tourism, visa reforms, etc. have placed India in a unique position. This is bringing the country closer to achieving its vision of becoming the largest aviation market by 2030.
The report highlights that the National Civil Aviation Policy (NCAP 2016) is likely to provide a significant fillip to the industry. The various fiscal and monetary incentives, liberal policies focused on ‘ease of doing business’ and enhanced push for regional and global connectivity are extremely positive.
Steps taken to revive and operationalise around 160 airports in India, if chosen carefully, will improve air connectivity to regional and remote areas. Public-Private Partnerships (PPP) in the sector will get substantial support from the state in terms of financing, concessional land allotment, tax holidays and other incentives. The report strongly suggests that in order to ensure high-geared growth, it is imperative to broaden the base of domestic flyers through greater air connectivity in Tier 2/3 cities. Many Indian states have taken positive initiatives, largely in the field of development of airports, reduction in sales tax rates on ATF and direct subsidy to airlines for improvement of connectivity.
The government and industry are engaged closely in addressing the various opportunities and challenges in the aviation sector; and that’s a welcome sign. The collaboration needs to be strengthened and institutionalised. With positive macro-economic factors, low ATF prices and industry-friendly government policies, India is well placed to achieve its vision of becoming the third largest aviation market by 2020 and the largest by 2030.