Government bullish on India's aviation growth amidst MRO infra expansion, regulatory reforms

Airport development

Aviation Secretary Vumlunmang Vualnam has expressed the government's unwavering confidence in the continued development of airport infrastructure across India.

Speaking at the CAPA Summit, Vualnam revealed discussions regarding the enhancement of 453 potential airstrips, signaling a concerted effort to bolster the aviation landscape.

"The ministry has reviewed the full list of 453 airstrips in the country and around 157 of them are operational, he said and added that more airstrips would be developed as brownfield projects," Vualnam said while speaking at the CAPA India Aviation Summit.

He added that efforts will be made to jointly develop more defence airfields for civil aircraft operations.

Among the focal points of discussion is the improvement of the aircraft Maintenance, Repair, and Overhaul (MRO) infrastructure, with imminent tax reforms expected to further facilitate growth in this sector. Encouraging industry stakeholders to capitalize on India's vast potential, Vualnam urged the establishment of MRO facilities within the country.

The ministry would ensure a conducive ecosystem for airlines and their expansion.

"The ministry is working to ensure that taxation would not be a bottle neck for the MRO (Maintenance, Repair and Overhaul) organisations," the secretary said.

Moreover, preparations surrounding the Cape Town Convention Bill, aimed at safeguarding aircraft lessors in cases of airline insolvency, are reportedly in advanced stages. With the advent of the new government, it is anticipated that the bill will assume top priority, potentially streamlining regulatory frameworks within the aviation sector.

He said the paper work is ready for enacting the legislation in order for India to ratify it.

Adding to the optimistic outlook, Kapil Kaul, Chief Executive Officer and Director at CAPA India, underscored projections indicating a doubling of India's aircraft fleet over the next five years.

Additionally, the Airports Authority of India is slated to allocate approximately $4 billion toward expanding airport infrastructure in non-metro cities, with plans to privatize 25 more airports in the forthcoming financial year.

He also said that the government is committed to ensure the use of Sustainable Aviation Fuel (SAF) to keep pace with the requirements.

In its outlook for FY2024-25, Capa India said domestic air traffic is projected to rise 6-8 per cent to 161-164 million and international traffic by 9-11 per cent to 75-78 million.

(This is a developing story, stay tuned for more details)