Boosting connectivity to smaller cities
The government of India recently announced a comprehensive 5-year plan to build and expand 50 new airports across Tier-2 and Tier-3 cities. This much-needed, ambitious plan comes amidst a record surge in Indian domestic air traffic, which touched 477,554 on September 2, only outnumbering the second-best number of 470,751 achieved on April 21 this year.
FY24 in fact saw a remarkable YoY growth of ~ 13% in domestic passenger traffic at 154 MN, which surpassed the pre-COVID levels of 142 MN in FY2020. Airlines’ capacity deployment is another indicator, that grew 6% YoY in May 2024, ~ 2% higher than April 2024. This trend is expected to continue in FY2025 as well. The key parameters around passenger traffic, domestic passenger load factor, and capacity deployment showed healthy improvement, while fuel prices (cost side) inched higher.
Naturally, buoyed by such robust domestic air traffic growth, GoI has decided to expand the airport reach to underserved cities and towns. And if one looks at the growth of domestic traffic trends, this will boost passenger figures enormously.
Revisiting last decade
A quick comparison of where domestic aviation stood in 2014 vis-à-vis where it presently throws up some stark numbers.
In April 2014, India had 215 domestic routes, while by April 2024, that number had shot up to 540. In 2014, India had 74 operational airports, and by 2023, that number had expanded to 149.
Comparing the top 5 domestic aviation markets, India was the smallest in 2014 with 8 MN seats, followed by Indonesia on the 4th and Brazil on the 3rd. Today, India is the 3rd largest market, after the US and China.
A key enabler to the domestic traffic growth has been the Regional Connectivity Scheme – Ude Desh Ka Aam Nagrik (RCS-UDAN), which was launched in 2016 to enhance connectivity to unserved and underserved airports in the country. Today, with 517 RCS routes operational, connecting 76 airports, UDAN has facilitated air travel for over 1.3 Cr people. The recent announcement by GoI will aid this further.
The Plan
A key feature of the plan is to develop Bihta Airport, which will serve as the secondary airport for Bihar’s capital, Patna. The foundation ceremony of Bihta is expected to be in 2024 end, and this could be a breather for Patna Airport which is expected to reach its maximum capacity by the early 2030s. A few features of Bihta will include over 60 check-in counters, and more than 15 self-check-in kiosks, with peak passenger handling ability per hour of 3,0001. The airport will be expected to have an annual capacity of up to 5 MN passengers over the next 2 decades.
Other portions of the 5-year plan include the development of greenfield airports at Ankleshwar and Dwarka in Gujarat. Spiritual tourism will likely get a massive boost for devotees through this development.
Aside from airports, the 5-year plan also contains a roadmap for opening new civil enclaves at several Air Force stations. This would include locations like Thanjavur in TN, Hasimara in WB, and Thoise in Ladakh.
Some upgrades in overall air traffic infrastructure are also part of the plan. Key ones are an adaptation of VFR (Visual Flight Rules) operations for narrow-body aircraft like Airbus A320 at Agatti Airport, implementation of IFR (Instrument Flight Rules) operations for narrow-body aircraft at Pantnagar Airport (Uttarakhand), expansion of Mysuru airport to handle narrow-body aircraft. These will aid movement and traffic handling at each of these airports in a phenomenal manner, leading to greater domestic traffic.
Bharat takes flight
The only risk envisaged in the robust demand trajectory could be a possible uptick in airfares, to compensate for increased operational expenses owing to a rising jet fuel price environment. Following the pandemic, crude oil prices reduced substantially, hitting $19/barrel in April 2020. Ever since, however, prices have inched higher, reaching ~ $83/barrel in May 2024. Geopolitical disruptions have been the main reasons for the same. While between April 2023 and March 2024, ATF prices were lower YoY, any tendency of a hike here can cast some spanner to domestic traffic surge.
Notwithstanding any seeming headwind, domestic air travel has burgeoned. A quick view of domestic daily flight departures from May 25, 2020, till May 2024 amply attests to this fact.
(Source: MoCA, DGCA, ICRA Research)
With the recent announcements by GoI, this will get a further fillip.
Integral Humanism and Antyodaya have been the core tenets of BJP’s ideology. Deen Dayal Upadhyaya famously remarked – “It is our thinking and principle that these uneducated and poor people are our Gods. We have to worship them. It is our social and human dharma.” The ‘Sabka Vikas’ tenet of present-day Central Gov has hinged squarely on this ideology. Making air travel accessible and affordable to all has been but one small, yet significant, cornerstone of this vision.
As the Government gets working on building 50 airports over the next 5 years, Bharat eagerly awaits its next flight to surmount uncharted heights.
