Air India: Will flights be smooth in 2024?

A rapid increase in tourists to India and a growing affluent population are driving growth in the country’s general aviation sector. However, despite being competitive, the Indian aviation industry needs to overcome certain challenges to optimally exploit its opportunities.

The recent conclusion of WINGS India 2024 saw various airlines achieving the set targets. Akasa Airlines has announced a firm order for 150 fuel-efficient Boeing 737 MAX aircraft. The latest order, consisting of 737 MAX 10 and 737 MAX 8-200 jets, will provide the company with a stable flow of aircraft deliveries until 2032 and strengthen the company’s domestic and international expansion plans .

According to CAPA India’s latest report, Indian airlines currently have orders for 1,620 aircraft, which are expected to rise to 2,000 by March 2025. This increase is achieved as a result of Air India converting some of its 370 options into firm orders every few months, supplemented by the possibility of further orders by other Indian airlines.

According to the Boeing Commercial Market Outlook 2023, more than 2,700 new aircraft will be introduced in South Asia over the next 20 years, 90% of which will be destined for India. The growth projections also call for around 37,000 pilots and 38,000 mechanics in the region, which is primarily led by India.

In 2023, Indian airlines ordered more aircraft than any other country’s airlines. Total orders for Western aircraft are second only to the United States. “India will be the most exciting aviation market of the 21st century, with domestic and international transport growing rapidly over the long term.However, to support this once-in-a-generation growth, India’s physical and institutional , a complete rethinking of the skills infrastructure,” the CAPA report quotes.

Competitiveness

In addition to its huge home market, India is perhaps the most advantageously located of the world’s five largest aviation markets (the others being the United States, China, the United Kingdom, and Japan) and serves as a hub for the rapidly growing intercontinental corridor. I am fulfilling my role.

Because the United States is a geographically end-market, it has limited opportunities to serve as an international hub. India could reach China’s size within 12-15 years. However, while China has an aviation industry with a high degree of central government control and planning, this is not the case in India. Both China and Japan have locations where hub potential is limited to trans-Pacific routes. The UK has the capacity to handle traffic between North America and Europe, and the volumes are certainly high. However, these will also be the slowest growing markets going forward. As we have seen, Australia is most similar to India in terms of market concentration. But by the end of this decade, the Indian market will be almost five times the size of Australia’s, making the similarities between the two countries less relevant and Australia becoming a marginal market, according to analysis by CAPA India.

India is therefore in a unique position, being the third largest, fastest growing and one of the most advantageously located markets to handle a large domestic market and hub traffic. India needs to decide what kind of market it needs to be and develop a strong institutional framework with this in mind.

Current performance

Marking a new dawn for the Indian aviation sector, Civil Aviation Minister Jyotiraditya Scindia unveiled India’s first Airbus A350 aircraft on the opening day of Wings India 2024. “The A350 is a game changer for Air India. It will not only improve passenger levels.” It will not only gain experience but also open up new routes and expansion opportunities. Together with the complete interior refurbishment of the legacy widebody fleet starting mid-year, this fleet and product upgrade will be a key pillar in Air India’s return to the upper echelons of the global aviation industry. ” said Campbell Wilson, his CEO and MD of Air India.

A350 aircraft sustainability marks another milestone. Powered by the powerful and fuel-efficient Rolls-Royce Trent We are strengthening it. In February 2023, Rolls-Royce announced that it had ordered 68 Trent XWB-97 engines from Air India, with options for a further 20 engines to power the Airbus A350-1000. The Tata-owned airline has also ordered 12 Trent XWB-84 engines, the only engine option for the Airbus A350-900. Kishore Jayaraman, Managing Director of Rolls-Royce India, said: “Our engines in partnership with Air India will be 50% SAF (sustainable aviation fuel) compliant from day one.”

On the sidelines of Wings India 2024, Airbus India and South Asia president and MD Remi Meillard said Airbus will double its procurement from India from the existing $750 million to $1.5 billion by the end of 2010. Stated. Specifically, India will need 2,840 new aircraft and 41,000 pilots over the next 20 years, as well as 47,000 technical staff.

Echoing similar sentiments, Salil Gupte, head of Boeing’s India division, had earlier told Entrepreneur India: The country is projected to receive more than 90 percent of South Asia’s aircraft deliveries, requiring more than 2,400 new aircraft, while its cargo market will expand significantly, with a fleet of 15 aircraft by 2042. 80 aircraft, and is expected to drive $135 billion in aviation demand. Commercial Services” highlights that there is a huge demand for 37,000 pilots and 38,000 maintenance technicians in South Asia over the next 20 years.

overcome challenges

India’s high taxes on Aviation Turbine Fuel (ATF) pose multifaceted challenges to the domestic aviation industry. ATF represents a significant portion of an airline’s operating costs, in some cases reaching 40-45 percent. These high taxes strain the financial viability of airlines and can lead to reduced margins, the withdrawal of a small number of routes, and increased fares, hindering the growth of the airline industry. In response, the government lowered prices. ATF prices have been reduced by Rs 4,162.5 (3.9%) to Rs 101,993.17 per kilolitre in the national capital region, according to a price notification by state-run fuel retailers. Jet fuel prices have fallen for the third consecutive month. Following the reduction, IndiGo announced that it had stopped collecting fuel charges from airline tickets, nearly three months after introducing the tax in response to soaring jet fuel prices.

Maintenance, repair, and overhaul (MRO) capabilities have become essential to having an appropriately sized fleet. Ensuring aircraft safety and reliability requires significant investment in MRO infrastructure and expertise. This initiative not only increases safety, but also fosters job creation and technological advancement in aviation. According to CII’s analysis, the main challenge lies in his MRO of components and engines, where most of the expenditure occurs. But it takes 10 years for a new aircraft model to enter service at a local repair station. His efforts to strengthen India’s MRO capabilities, particularly components and engines, are essential to support the growing aviation sector, create jobs and improve technological capabilities.

In the short term, the industry will need to address several key challenges over the next year or two. In addition to ongoing severe supply chain issues, airlines must now deal with the impact of revised flight time restrictions. “With recent revisions to flight duty time limits, airlines may have to increase the number of pilots by nearly 20 percent to remain compliant with operating current schedules, let alone future growth. This is happening now. “We are currently at a time when there is a structural shortage of pilots globally. ” the CAPA analysis is quoted as saying.

There are currently 160 aircraft on the ground, which could increase to around 200 by the end of March 2024, accounting for almost 25% of registered aircraft, so supply chain issues are This will be an immediate concern. Uncertainty persists because no one can determine a deadline by which these issues will be resolved or exclude the possibility that further problems will arise. To make further leaps, these hurdles must be addressed.

The Indian aviation market size is estimated to be USD 13.54 billion in 2024 and is projected to reach USD 23.24 billion by 2029, at a CAGR of 11.41 percent during the forecast period (2024-2029). will grow, Mulder Intelligence said in its latest analysis. .