Civil Aviation Minister Ajit Singh said the Central government had envisaged an investment of $12.1 billion in the airports sector during the 12th Plan period, and of which, $9.3 billion was expected to come from the private sector for construction of new and low-cost airports and expansion and modernisation of existing ones.
“Rapidly expanding air transport network and opening up of the airport infrastructure to private sector participation have fuelled the growth of the air traffic in India,” he said in his inaugural address at India Aviation 2014, an international exhibition and conference on civil aviation, in Hyderabad on Wednesday.
The minister said the air traffic density in India, however, was very low at 72, as compared to China (282), Brazil (231), Malaysia (1,125), the US (2,896) and Sri Lanka (530).
“This indicates the untapped market potential, given the projected burgeoning young population and rising disposable income levels in future. We are looking into further expanding the sector by promoting regional and remote-area connectivity,” he said, adding that work on more than 50 low-cost airports, located in remote and interior areas of the country had already been initiated by the AAI.
India is currently the ninth largest aviation market, handling 121 million domestic and 41 million international passengers with more than 85 international airlines operating to India and five Indian carriers connecting over 40 countries.
The Indian airport system is poised to handle 336 million domestic and 85 million international passengers by 2020, making it the third largest aviation market. Also, commercial fleet size is expected to grow from 400 today to 1,000 aircraft by 2020.
Singh said the government had taken initiatives to attract foreign direct investment (FDI) in the sector. “The biggest game-changer in this direction has been the decision to allow 49 per cent FDI by foreign airlines in Indian carriers. The results of this policy are already visible, as two new scheduled airlines Air Asia and Tata SIA are in the process of starting their operations in near future. This is in addition to the FDI of $350 million by Etihad into Jet Airways,” he said.