The air traffic in terms of the passenger, as well as freight transported, has been multiplying significantly every passing fiscal year. The air traffic is being projected to grow at a compound annual growth rate (CAGR) of 10%, every year through 2015-2020. By 2030, if the CAGR holds, the numbers for passenger traffic is predicted to reach 850 million. Government has taken many key initiatives to drive the growth of this sector such as- Constructing highways-cum-airstrips, awarding routes to airlines as well as helicopter operators with the objective of enhancing flight services to hilly and remote areas at discounted rates, allocating funds vastly for the airport building and modernization projects etc.

  • The Government aims to egg on the increase in GDP per annum. The GDP is expected to reflect as much as 1,26,000 by 2020 and 2,40,000 by 2030, growing at a rate of 5% since 2015. The trend has been further testified by the growth in air traffic from Tier-2 and Tier-3 cities. The CAGR on traffic from these cities is expected to exhibit a growth rate of 13% every year, making for 51% of the annual air traffic.
  • The target is to capitalize on the growing trend of domestic travel by air made possible by affordable prices, with the vision to increase the number of airports that see traffic of 1.5 million passengers per annum, to 70 by 2030; as of 2015, the number was 24.
  • Banking on the impressive CAGR of air traffic per year, in the bigger picture, the Government wants to make Indian Airways the third largest passenger market in terms of million origin-destinations. Given the forging of business and cultural ties with many of the developed nations such as the United States, speculations of several destination routes being chartered are rife. This further opens up the market for Foreign Direct Investment, as the Centre believes the lucrative market will invite the US and other carriers to claim a stake in the same. The prospects of a partnership in the Indian passenger market has been turning heads from international air carriers, recent times.

FDI inflows in air transport (including air freight) between April 2000 and September 2017 stood at USD 1.59 billion. India is estimated to see an investment of USD 25 billion in the next decade in the airports sector, and traffic growth of 13 per cent.