Union Minister Scindia: Indian civil aviation set for transformation and global expansion

Air India

Speaking at the CII Annual Session 2023, Union Minister Jyotiraditya Scindia addressed a session titled "Transforming the Aviation Sector" on May 24 in New Delhi.

The minister emphasized that civil aviation has now emerged as a fundamental pillar driving economic growth throughout the country.

"Civil aviation brings a dividend of 3.1 percent in terms of economic growth and 6.1 percent in employment growth," the minister said. He emphasized that the civil aviation sector in India is on the cusp of fundamental change. "Every industry in the world goes through stages of infancy, growth, and maturity. Civil aviation in India is just about in its take-off stage, as far as its growth phase is concerned," Scindia said.

Encouraging domestic airlines to expand their operations globally, Scindia urged them to embrace risk and volatility. He highlighted that while domestic markets are highly competitive with slim margins, they offer relative stability.

On the other hand, international markets provide higher revenues but come with greater volatility. The minister urged airlines to take calculated risks and confront volatility, emphasizing the importance of representing India's presence in the international aviation arena. He stated, "Because India's flag has to fly in the international space."

The minister drew attention to Air India's record-breaking order of 470 aircraft, the largest in international civil aviation history. He pointed out that the Prime Minister has democratized civil aviation in the country and expressed the government's strong focus on improving last-mile connectivity.

He further noted, "Over the past four to five years, civil aviation has experienced a remarkable compounded annual growth rate of 10.6 percent. The domestic passenger count has surged from approximately 60 million in 2013-14 to 144 million today. During the same period of nine years under Prime Minister Narendra Modi's leadership, the number of airports, waterdromes, and heliports in the country has doubled, reaching 148."

Scindia highlighted that the government's role extends beyond regulation and encompasses facilitation. He stressed the significance of collaborating with all stakeholders and addressing their concerns. According to him, by resolving their pain points and creating an enabling environment for growth, India's civil aviation sector and the nation as a whole can thrive.

Referring to the shift in dynamics, the minister noted that the traditional concept of airports and connectivity being centered around industrially and tourism-prominent cities has been reversed. He pointed out that today, industrialists and tourists are drawn to locations with airports and convenient connectivity.

Recognizing this shift, the minister emphasized the necessity of establishing a comprehensive airline civil aviation ecosystem in India. He further highlighted the importance of developing key verticals associated with aviation, such as maintenance, repair and overhaul (MRO), flying training organizations, and ground handling within the country.

Expressing optimism, he added, "I see no reason why India cannot be a leader in aerospace manufacturing over the next 15–20 years," he said, adding that India has the right market capability and is the largest-growing market in the world. The minister also said that it is about time to set up an international civil aviation hub in India.

Salil Gupte, Chairman of the CII National Committee on Aerospace and President of Boeing India, expressed that it is the opportune moment for India to accelerate its growth, considering the arrival of approximately 2,200 aircraft in the country over the next 20 years. Gupte stated, "To accomplish this, we must focus on developing localized training programs, sourcing parts locally, and establishing robust MRO services."

He further added that the focus in manufacturing needs to be on moving from building on foreign OEMs' blueprints to developing blueprints themselves and owning the intellectual.