Building a Bright Future for India's Aviation Sector
28 August 2014 – Airports Council International (ACI) World Director General Angela Gittens met earlier this week with senior Indian aviation officials in New Delhi to discuss the future of aviation in the country. With a population of over a billion people and a growing middle class now just beginning to discover air travel, India last year enjoyed traffic growth of 6.2% compared to the previous year. This growth is expected to continue, and the Indian airport sector needs to be prepared to handle increased passenger numbers and more cargo in the coming years.
"India is full of potential with a large population in a large country with a growing middle class," said Gittens. "However it still has a long way to go in view of the fact that other countries with similar or lower population bases handle relatively larger volumes of passenger traffic." India is not currently in the top ten countries in terms of airport passenger volume (see table below).
One of the key challenges for Indian aviation is the development of airport infrastructure. In this regard ACI discussed with government officials the need for India to have the right economic regulatory framework in place to encourage the development of this much needed infrastructure.
The world is recognizing that airports are businesses in their own right as they vie to gain air services for their communities. As such, the need for strict economic regulation in every case is now outmoded and regulators tend to focus more on service quality rather than strict price control.
ACI discussed the upcoming privatizations of additional airports. Ms. Gittens stressed that the process needed to be transparent and that all stakeholders needed to understand what the features of the new concession model will be. The current concessions have been successful in providing a steady source of subsidy to the smaller Indian airports and the much needed capital investments in the larger airports. However, the current regulatory model has yielded poor returns for the investors and could stifle development in India's airports in the long run.
"ACI offered its support to India's attempts to further develop its airport infrastructure and find the right regulatory framework to achieve the desired goals. Other countries have faced this dilemma and we will provide examples for the government to explore. Aviation is key for the social and economic development of cities, regions and nations, and connectivity to the global market is essential. India should be one of the three largest aviation markets in the world. ACI wants to see India take its rightful place in the aviation world."
The ACI team included Asia Pacific Regional Director Ms. Patti Chau and ACI World Economics Director Dr. Rafael Echevarne.
