Hyderabad, March 12 (IANS) India, which is poised to become the third largest aviation market in the world by 2020, offers tremendous opportunities for foreign investors, Civil Aviation Minister Ajit Singh said here Wednesday.
Inaugurating India Aviation 2014, the country’s largest civil aviation event here Wednesday, he underlined the need for increasing international collaboration in the sector.
Ajit Singh said the Indian government envisaged an investment of $12.1 billion in the airports sector during the 12th Plan period, of which $9.3 billion is expected to come from the private sector for construction of new airports, expansion and modernisation of existing airports and development of low-cost airports.
The minister said the move to allow 49 percent Foreign Direct Investment (FDI) by foreign airlines in Indian carriers was the biggest game changer in attracting FDI and roping in private investment.
“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 the near future,” he said.
Ajit Singh said that this was in addition to the $350 million FDI by Etihad in Jet Airways.
Indian airports are poised to handle 336 million domestic and 85 million international passengers by 2020, making India the third largest aviation market. The commercial fleet size is expected to grow from 400 to 1,000 aircraft by 2020.
India, which is currently the ninth largest aviation market, is handling 121 million domestic and 41 million international passengers with more than 85 international airlines flying to India and five Indian carriers connecting over 40 countries.
Noting that air traffic density in India was very low at 72 compared to 282 in China and 2,896 in the US, Ajit Singh said this indicated untapped potential given the projected burgeoning young population and rising disposable income levels in future.
The minister said the government was looking to expand the sector by promoting regional and remote-area connectivity. It recently announced a policy, which prescribed several financial and other concessions to the operators connecting regional and remote area airports.
The Airports Authority of India (AAI) has already initiated work on more than 50 low-cost airports in remote and interior areas.
Ashok Lavasa, secretary for civil aviation, said the passenger and cargo throughput in India registered compounded annual growth rate of 13 and 10 percent respectively during 2003-13. The passenger handling capacity of airports rose from 72 million to 233 million during the last five years.
By 2020, the overall air traffic is expected to grow at an annual average growth rate of 10.1 percent. Domestic traffic is expected to grow at 11.4 percent and international traffic is expected to grow at 9.5 percent.
Andhra Pradesh Governor E.S.L. Narasimhan, French Ambassador Francois Richer and US Trade and Development Agency director Leocadia Zak also spoke.
More than 250 aviation companies from 18 countries are exhibiting their products and services at the five-day international exhibition and conference being held at Begumpet Airport.
As many as 18 aircraft including the world’s largest passenger airliner Airbus A380 and Boeing 787 Dreamliner are on display.