India's Aviation Sector Reaching Out To New Horizons
INTERVIEW
India's Civil Aviation market is witnessing a fundamental change with the passenger traffic expected to double in the next few years. India has become the third largest domestic aviation market in the world. Speaking at a curtain raiser event on ‘Wings India, 2022’, Civil Aviation Minister Jyotiraditya Scindia said that India presently handles the third largest domestic traffic after the US and China. Through the Ude Desh ka Aam Naagrik (UDAN) - RCS (Regional Connectivity Scheme), Tier II and Tier III cities have been included in the aviation map, enabling passengers from these areas to avail flight services as well as assisting businesses to flourish. However, the fact that flight services penetration is only about 9-10 percent of the country's total population indicates that the potential for further growth and expansion is humongous. Speaking with Bhupendra Singh of All India Radio for Employment News, Union Minister for Civil Aviation, Shri Jyotiraditya Madhavrao Scindia said that his ministry now aspires to lend a further push to regional connectivity by launching the Small Aircraft Scheme under which smaller aircrafts which include up to 19-20 seaters and helicopters will provide last mile connectivity. Outlining the ministry's target for the coming years, the Minister informed that there are going to be lakhs of employment opportunities in the drones sector and the MRO (Maintenance, Repair and Overhaul) domain as many global aircraft manufacturers have expressed interest in setting up MRO units in India.
Question: UDAN (Ude Desh ka Aam Naagrik) has been your Ministry's hallmark of success. How many new air routes have been operationalised so far under this scheme and how many more are in the offing?
Shri Jyotiraditya M Scindia: UDAN is an extremely ambitious programme to increase connectivity and penetration to the last mile in India. Currently in India, we have 144 million discrete flyers which indicate the penetration of around 9 to 10 per cent of our total population. It was the Prime Minister Narendra Modi's dream and his Sankalp that we must democratize the air travel. Therefore, UDAN is a huge leap forward towards that goal. UDAN is a scheme that was started in 2016. As on date, we have close to about 419 operational routes through UDAN which never existed before. We have close to 66 airports that have been established. Airports, Waterdromes and Heliports have been established through UDAN in areas which were never on the Civil Aviation map prior to this scheme. Through this scheme, we have had about close to 1,80,000 flights till date that have been operated and close to 95 lakh common people have travelled by air because of this scheme. That is a revolution that UDAN has brought for the common man in our country. The idea of UDAN was born from the concept of execution and fruition through the scheme and now we are not stopping at this. Now we are starting the Small Aircraft Scheme which will look at up to 20 seater aircraft which will provide that last mile connectivity through smaller aircraft, Cessna Caravan, Beechcraft, sea planes and helicopters. We have close to 7500 kilometers coastline in our country. There are many smaller countries and states that have provided connectivity through sea planes, so we are looking at the Small Aircraft Scheme which we have been put in place along with UDAN 4.2. The bids are out. We are hopeful to put in place about 100 sea plane routes, of the roughly 350 routes, we have put into that bidding round. I am hopeful that we will see the emergence of many more routes in sea planes through this new Small Aircraft Scheme. It is a monumental change in the way Civil Aviation has operated because Civil Aviation has always concentrated on international - domestic- larger metro domestic- large metro domestic. But we are now looking at Tier 1- Tier 2 - Tier 3 cities while increasing that connectivity. There are many stories that are worth mentioning, such as the stories of Darbhanga, Jharsuguda, Rupsi, Kishangarh where travel to air was inconceivable. In the last five years, we have had a range of about 30,000 passengers to almost 5,00,000 passengers from the small cities that were never on the air navigation map prior to this scheme.
Question: India aims to lend a further boost to its exports through the One District, One Product scheme. Do you see UDAN-RCS playing a major role in facilitating exports by non-coastal districts?
Shri Jyotiraditya M Scindia: Absolutely! We believe that a part of UDAN -RCS is also the very ambitious Krishi Udan 2.0 where we have brought about convergence between eight ministries that will provide a further impetus to agriculture and other products of the districts. Where it has a comparative advantage is that in case of perishable goods and therefore, those being transported not only from one district to the other, but also from one state to the rest of the world. For example, Assamese Lemons are being transported today to London. Jackfruit from Tripura is being transported all the way to Germany and to London. And we are confident that through this even pisciculture, fisheries sector will be able to transport their produce much quicker to other parts of the country and to other parts of the world.
Question: To cater to the rising air traffic, there is a renewed push for setting up new airports and expanding the current ones. Kindly share some details about the new airports that are likely to be operationalised in the next two-three years.
Shri Jyotiraditya M Scindia: We were at a 144 million discrete travelers in 2019 before the pandemic hit us. This year, we closed to roughly about a 100 million discrete travelers. I see that going up to 200 million discrete travelers by as early as year 2025-26. In the last year after coming out of a very terrible pandemic year, we went up by around 72%. Our CAGR (Compounded Annual Growth Rate) prior to that has been between 10.6% to 15 percent. So, India is one of the fastest growing aviation-led countries in the world today. So, having said that, there has to be an increased level of focus on both developing infrastructure, increasing the fleet size as well as putting in place the ecosystem of civil aviation. As far as developing infrastructure is concerned, I am pleased to inform you that the country which had only 74 airports until 2014, under Prime Minister Shri Narendra Modi's very alert eyes and his commitment and direction to the civil aviation department, we have built close to about 67 airports/ waterdromes/heliports in the last eight years. Therefore, we have 141 airports/water-dromes/ heliports all over the country today from 74 only eight years ago. That is the story from the past to present. Now comes the story from the present to the future. I am looking at a target of 220 airports/waterdromes/ heliports by the year 2025. So, we are looking at increasing today's number by almost 50% in the next 4-5 years. Immediately, our expansion plans are the following: - z
· Under the Airports Authority of India (AAI), we are looking at spending around Rs 20,000 crores in 42 Brownfield projects that include expansion of terminals, expansion of runways, etc.
· Almost about Rs 5000-6000 crores in three new airports - Holongi, Dhullera and Hirasar.
· As far as the private sector is concerned, we are looking at an investment of close to about Rs 40000 crores in their current 7 Brownfield airports.
· We are looking setting up four new Greenfield airports at roughly another Rs 20000- 30000 crores. Those four are Bhogapuram, Mopagoa, Navi Mumbai and Jhewar. So, all in all, we are looking at a total capacity expansion and capex figure of close to Rs 98000 crores over the next three years.
· We are also looking at construction of 7 Greenfield airports between the government and the private sector
· Expansion plans of 49 airports in the next three-four years. What will be the result? Delhi currently services around 70 million passengers throughput at the airport today. The expansion in Delhi will take it up to a 100 million. So we will be at the level of New York, JFK, Chicago, or Atlanta - the largest airports in the world. Mumbai today is at 60 million. Navi Mumbai will put in place an added capacity of 30- 40 million to start with. Both Bangalore and Hyderabad are between 15-20 million today which will go to roughly about 40 million each in the next one year. So, you are looking at a capacity of roughly 160 million passenger throughput today going to above 300 million in the next two years or so. So, that is the geometric progression of scale we are looking at in the civil aviation sector.
QUESTION: Your ministry has given a new lease of life to the drone industry. What kind of skill development and employment opportunities are we looking at in this sector?
Shri Jyotiraditya M Scindia: After the Drone Policy has been introduced, we have already put in place almost 15 DGCA certified drone schools. A person need to be only 12th standard pass to be able to apply and go through a drone pilot training course which will take about one and a half to two months. As soon as applicant gets the certificate from the drone school, they will be eligible for a job which will earn him/her an income of almost Rs 30000 per month. I see that as a huge employment multiplier in India because as I see, we will need atleast 100,000 drone pilots in next two to three years because the applications of drones are tremendous both on the manufacturing side and the services side. I see this is a huge opportunity as an industry which has only 60 crore turnover today. We have put in place a PLI (Production Linked Incentives) scheme which guarantees Rs 120 crore in terms of pure incentives only - double the turnover of today's industry. I see this growing from an investment point of view to close to 5000 crore in the next two to three years. Employment of almost 10,000 direct jobs in this area. The second most important aspect is the services part of drones. That services industry, I see that as almost close to a 500,000 employment generator and close to about Rs 10000- 15000 crore industry in the days to come. We have 12 ministries of the Government of India that are employing and deploying drones as we speak, therefore, creating the demand. Drones or any new industry requires three legs to be able to stand on- (i) market friendly policy, which we have brought about in the form of the New Drone Policy we launched last August. (ii) Incentives Schemes- within one month of the policy we brought in the PLI Scheme for Drones. (iii) Creation of Demand - we have done this through 12 line ministries of the Government of India using drones as per the Prime Minister's directive. Let me also underline and say this is only because of the Prime Minister that we are today seeing drones at the forefront of the new scalable opportunity and his dream is that India must not be a follower but a leader and we have pledged to ensure that India becomes a global drone hub by the year 2030 as per his directions. The Prime Minister has brought about complete transformation in the way we look at opportunities and make sure we that translate them for India as a huge employment multiplier and an economic force.
Question: Just a few weeks ago, IndiGo became the first airline in the country to land aircraft using the indigenous navigation system GAGAN. What stage of implementation is GAGAN at?
Shri Jyotiraditya M Scindia: First of all, you need to understand the concept of GAGAN to start with. It is important for all of us and our consumers also to understand this. What happens when you start increasing connectivity is that there is a certain amount of congestion that takes place. That congestion results in tremendous amount of traffic in mainly the metro areas and the unserved airports as well which puts pressure on the air navigation systems known as ANS and the air traffic management system known as ATM. At the end of the day, the ANS and ATM are critical, and I must emphasize, critical, in ensuring the safety factor of flying aircrafts. Therefore, the computerized satellite system which is GAGAN, which is known as WAAS (Wide Area Augmentation System) internationally, becomes a complement, not a substitute, to the ANS and ATM to be able to navigate aircrafts. It's a new technology through which, without human interference, you'll have safe piloting and guiding of aircraft down to landing. This has only been done in the western world so far. Therefore, it is only the innovation capability of our scientists and our engineers that has made it possible in India. Therefore, the first safe landing has taken place, as you mentioned by an Indigo Aircraft in a tier-2 airport and we are confident in building this up. It is part of the system that we are monitoring. Now that we have got proof of concept, we need to put in place all the safety parameters before we roll it out on an incremental basis. But suffice to say that our eyes are on this and we will make this a reality in India in the coming days as the penetration goes up more and more in terms of air travel.
Question: In becoming an MRO (Maintenance, Repair and Overhaul) hub, how does India stand to benefit?
Shri Jyotiraditya M Scindia: Today, the MRO industry in India is about $2 billion. 85% of this work is done outside India and therefore the domestic industry accounts for only 15 percent of the business. We had a fleet capacity of 400 aircraft in 2014, that even accounting for the COVID period, has grown to a fleet of about 715 aircraft today. We are adding close to about 120 aircraft in fleet size on an annual basis. Therefore, now is the time through these large numbers of aircrafts that are being established in India that companies look at setting up their MRO facilities in India. We already have many domestic MRO that are set up, many companies that are doing close to their 15-20% part of their business but I would like the OEMs (Original Equipment Manufacturers) to come into India. Therefore, even on my visit to the US, that is something that I have tried to push and urge companies to set up MROs in India. There are many companies that are seriously looking at India. Companies like Boeing, Airbus, Pratt and Whitney, SAFRAN are already looking at India and I would urge many more companies to look and India. This can become the base for reverse engineering, that is servicing engines for the rest of Asia, for the rest of the globe out of India because we are geographically also well placed. Which is why I have also recast the MRO policy. The earlier MRO policy was extremely regulatory heavy and rent seeking in its nature. We have completely redone the MRO policy. Royalty has been completely done away with. Rents have been normalized to regular levels. Very clear clauses have been put in terms of renewal and therefore we have made it much more market friendly in order to attract companies.
(The interviewer is Correspondent, All India Radio News, New Delhi.
He can be reached at airnews.bhupendra@gmail. com)