TATA SIA Airlines has released a report titled, ‘Maximising the contribution of aviation to the Indian economy’, prepared for the company by CAPA- Centre for Aviation.
With an anticipated 3-fold increase in domestic air traffic, the Indian aviation sector has the potential to contribute to over 5 per cent of the GDP and create economic value of up to USD 250 billion on an annual basis by 2025. By 2050, it could generate direct employment for more than 2.3 million people. Looking at the global data and international best practises, the report underlines the need for a supportive supply and regulatory environment to realise the aviation industry’s transformative potential. This in-depth research based study of the entire aviation sector is intended to inform and sensitise policy makers and other stakeholders about the enormous benefits of liberalising aviation in the country.
Prasad Menon; Chairman of TATA SIA Airlines Limited, Mukund Rajan, Director on Board, TATA SIA Airlines, Phee Teik Yeoh, CEO of Vistara and, Kapil Kaul, CEO, South Asia, CAPA India released the report in Delhi recently.
Speaking on the occasion, Menon, said: “The purpose of this report is to provide a comprehensive and structured understanding of the aviation sector and to highlight the significant areas that have the potential to transform India’s aviation sector. CAPA is a well-known advisory and research organisation respected in the industry for their expertise in aviation. We partnered with them to look at how economies and people around the world have benefitted from liberalising the aviation sector. This report will provide valuable insights for greater partnership between government and businesses.”
The report highlights that aviation can play a critical role in delivering many of the government’s priority inititiatives including inbound and domestic tourism development, the ‘Make in India’ programme, enhanced trade competitiveness and broad-based socio-economic development.
The report reveals that the incremental domestic traffic handled in the last ten years was almost three times greater than in the previous 50 years. This clearly indicates that Indian aviation is yet to achieve its true potential.
This requires the attention of the highest levels of government to establish a clear vision and roadmap for the sector and create an enabling environment. In a country with low penetration of aviation, where only an estimated 1-2% of the population travel by air and the annual per capita seats are less than a quarter that of China, Indonesia or Thailand, the results of this nurturing could be transformative for the economy.
Laying out the current state of aviation in India and the enormous potential it offers, Director on Board, TATA SIA Airlines Limited, Rajan, said: “TATA SIA Airlines Limited wants to be a long term player and a supportive participant in the government’s efforts to bring about transformation in the aviation sector. As part of a group that pioneered civil aviation in this country, it will be our endeavour to enable the government to realise the Prime Minister’s vision for India and to help bring people, countries and regions closer. India needs to aspire to create a world class and competitive airline industry that can hold its own. We have proven we can do this across sectors – IT services, metals, automobiles, pharmaceuticals, hospitality and others. There is no reason we cannot do this in aviation. ”
Kaul said, “We have completed 110 consulting and research projects in India & South Asia for more than 100 Indian and global clients since 2003, across the entire aviation value chain including airports, airlines, general aviation, ground handling, cargo, express, logistics and infrastructure, air traffic management, maintenance, training, technology, distribution, aircraft acquisition and leasing and investor due diligence – – but this is the first time that a structured report on the entire aviation sector has been commissioned by a direct stakeholder on the need to make aviation in India competitive and viable. While preparing this report we examined global regulatory, policy, fiscal and strategic frameworks across the top aviation markets in the world to understand how aviation had helped economic growth, job creation, businesses and consumers.”
The report concludes that India is blessed with undeniably strong fundamentals to become a global leader in aviation. The aviation sector is at a critical juncture when it needs government and businesses to form a strong partnership and create a collaborative environment to truly transform the industry and establish India as a global aviation hub.
