GLOBAL AVIATION S U M M I T 2 0 1 9 15 – 16 January 2019 | The Grand Hyatt, Mumbai Vision 2040 for the Civil Aviation Industry in India Knowledge Partner GLOBAL AVIATION S U M M I T 2 0 1 9 15 – 16 January 2019 | The Grand Hyatt, Mumbai Vision 2040 for the Civil Aviation Industry in India Knowledge Partner GLOBAL AVIATION S U M M I T 2 0 1 9 15 – 16 January 2019 | The Grand Hyatt, Mumbai Vision 2040 for the Civil Aviation Industry in India Knowledge Partner Federation of Indian Chambers of Commerce and Industry Federation House Tansen Marg New Delhi 110001 Sandip Somany T +91 11 2335 7364 F +91 11 2332 9369 President E [email protected], www.ficci.in CIN: U99999DL1956NPL002635 ISO 9001 : 2015 Certified MESSAGE I compliment the Ministry of Civil Aviaon, Government of India for taking this important iniave of organising the Global Aviaon Summit on 15th -16 th January 2019 in Mumbai with the overarching theme “Flying for All” The Indian aviaon sector is on a high growth path which is currently among the top seven global aviaon markets. It is expected to become the third largest market in the world by 2022. India now handles the third largest domesc traffic aer USA and China. It is likely that growth of this sector will be further boosted. However, the unprecedented growth being witnessed in the Indian aviaon sector is sll significantly lower than its untapped potenal. This opens opportunies for investment in new growth areas in the domain of civil aviaon. As this programme will bring all key stakeholders of the global aviaon sector on one plaorm, I am confident that the deliberaons in the Global Aviaon Summit will further facilitate growth of this important segment of our naonal economy. I wish the Summit all the success. I wish the Summit all the success. 10 January 2019 Sandip Somany Industry’s Voice for Policy Change Federation of Indian Chambers of Commerce and Industry Federation House Tansen Marg New Delhi 110001 Sandip Somany T +91 11 2335 7364 F +91 11 2332 9369 President E [email protected], www.ficci.in CIN: U99999DL1956NPL002635 ISO 9001 : 2015 Certified MESSAGE I compliment the Ministry of Civil Aviaon, Government of India for taking this important iniave of organising the Global Aviaon Summit on 15th -16 th January 2019 in Mumbai with the overarching theme “Flying for All” The Indian aviaon sector is on a high growth path which is currently among the top seven global aviaon markets. It is expected to become the third largest market in the world by 2022. India now handles the third largest domesc traffic aer USA and China. It is likely that growth of this sector will be further boosted. However, the unprecedented growth being witnessed in the Indian aviaon sector is sll significantly lower than its untapped potenal. This opens opportunies for investment in new growth areas in the domain of civil aviaon. As this programme will bring all key stakeholders of the global aviaon sector on one plaorm, I am confident that the deliberaons in the Global Aviaon Summit will further facilitate growth of this important segment of our naonal economy. I wish the Summit all the success. I wish the Summit all the success. 10 January 2019 Sandip Somany Industry’s Voice for Policy Change Foreword CONTENT Executive Summary 1 1 Introduction 5 Amber Dubey Manoj Mehta 2 Traffic Projection: Vision 2040 11 Partner and Head - Aerospace and Defence Head - Civil Aviation KPMG in India FICCI [email protected] [email protected] 3 Airports 19 4 Airlines 31 ndia's civil aviation industry is the pride of the nation. It is playing a key role in connecting 5 Air Cargo 45 Indians to the remotest corners of the country and to the world. It is bringing people from the Iacross the world to discover the huge business and tourism opportunities in India. 6 Maintenance, Repair and Overhaul 53 In December 2018, Indian aviation completed 52 consecutive months of double digit growth. 7 General Aviation 63 With a growing economy, rising incomes, supportive policy environment and intense competition among airlines, the growth story is likely to continue. The rapid expansion in India's 8 Aeronautical Manufacturing 71 airport and air navigation infrastructure will fuel it further. 9 Remotely Piloted Aircraft 79 With just 187 million passengers (to, from and within India) in FY 2017-18, many believe this is just the tip of the iceberg. The best of Indian aviation is yet to come. 10 Air Navigation System 85 This Vision 2040 document highlights the growth potential in different sub-sectors of Indian 11 Ground Handling 93 aviation and the key action steps required thereof. We hope that this document leads to further deliberations and ne-tuning of the path to 2040. 12 Aviation Security 99 A vision is only as good as its execution. With growing collaboration between the policymakers, 13 Aviation Safety 105 industry and academia, we believe that India can surprise the world by not just meeting but exceeding the Vision 2040 targets. 14 Aviation Financing 113 KPMG thanks FICCI for the opportunity collaborate on this important initiative. We look forward 15 Human Resource Development 121 to your kind insights and feedback at [email protected] and [email protected]. 16 Vision 2040: Monitoring Mechanism 129 Foreword CONTENT Executive Summary 1 1 Introduction 5 Amber Dubey Manoj Mehta 2 Traffic Projection: Vision 2040 11 Partner and Head - Aerospace and Defence Head - Civil Aviation KPMG in India FICCI [email protected] [email protected] 3 Airports 19 4 Airlines 31 ndia's civil aviation industry is the pride of the nation. It is playing a key role in connecting 5 Air Cargo 45 Indians to the remotest corners of the country and to the world. It is bringing people from the Iacross the world to discover the huge business and tourism opportunities in India. 6 Maintenance, Repair and Overhaul 53 In December 2018, Indian aviation completed 52 consecutive months of double digit growth. 7 General Aviation 63 With a growing economy, rising incomes, supportive policy environment and intense competition among airlines, the growth story is likely to continue. The rapid expansion in India's 8 Aeronautical Manufacturing 71 airport and air navigation infrastructure will fuel it further. 9 Remotely Piloted Aircraft 79 With just 187 million passengers (to, from and within India) in FY 2017-18, many believe this is just the tip of the iceberg. The best of Indian aviation is yet to come. 10 Air Navigation System 85 This Vision 2040 document highlights the growth potential in different sub-sectors of Indian 11 Ground Handling 93 aviation and the key action steps required thereof. We hope that this document leads to further deliberations and ne-tuning of the path to 2040. 12 Aviation Security 99 A vision is only as good as its execution. With growing collaboration between the policymakers, 13 Aviation Safety 105 industry and academia, we believe that India can surprise the world by not just meeting but exceeding the Vision 2040 targets. 14 Aviation Financing 113 KPMG thanks FICCI for the opportunity collaborate on this important initiative. We look forward 15 Human Resource Development 121 to your kind insights and feedback at [email protected] and [email protected]. 16 Vision 2040: Monitoring Mechanism 129 Executive Summary 1 Executive Summary 1 Executive Summary ndia is the seventh-largest country by area and the second-most populous with over 1.35 billion people. It is one of the fastest growing economies of the world and is likely to become Ithe fth largest in 2019. The Indian aviation market is on a high growth path. Total passenger traffic to, from and within India, during Apr-Nov 2018 grew by around 15% year on year as compared to around 6% globally. India is now the seventh largest aviation market with 187 million passengers (to, from and within India) in FY 2017-18. It is expected to become the third largest by 2022. This growth is being driven by a growing economy, rising incomes, intense competition among airlines and a supportive policy environment. The National Civil Aviation Policy (NCAP 2016) signaled the government's intent to radically alter the sector's growth trajectory. NCAP's agship program - Regional Connectivity Scheme (RCS or UDAN) is taking ying to the masses by offering subsidised fares as low as USD 35 for a one hour ight. The government decided to privatise its national carrier Air India and helicopter company Pawan Hans, something unthinkable in the past. Initiatives like Nabh Nirman (for airport capacity augmentation), Digi Yatra (for paperless travel) and AirSewa (for online passenger grievance redressal) etc. are bringing in radical changes. The tax structure for Aviation Turbine Fuel (ATF), Maintenance, Repair and Overhaul (MRO) and aircraft leasing may be gradually aligned with leading global jurisdictions. If the trend continues, India would become one of the top aviation hubs by 2040. The passenger traffic is expected to grow six-fold to around 1.1 billion. India has one of the largest aircraft order books currently with pending deliveries of over 1000 aircraft. Its commercial airline eet is likely to grow from 622 in March 2018 to around 2359 in March 2040. India may have around 190-200 operational airports in 2040. Its top 31 cities may have two airports and the cities of Delhi and Mumbai three each. The incremental land requirement is expected to be around 150,000 acres and the capital investment (not including cost of acquiring land) is expected to be around USD 40-50 billion.