Author: Abhijith Ganapavaram and Nandan Mandayam
NEW DELHI (Reuters) - Prime Minister Narendra Modi's high-profile attendance at the global airline meeting this week highlights how much support India has in its aviation prosperity to support broader development goals, but its ambitious force is the gathering force.
Unsettled by uncertainty across the aviation sector, India’s largest airline sold orders for new aircraft after a record deal two years ago.
But the rapid pace of growth risks will lose steam without addressing aircraft shortages, infrastructure challenges and tax issues.
Hosts with neighboring Pakistan have also led to large and expensive detours around Pakistani airspace, requiring more fuel and passenger care.
People familiar with the matter told Reuters that the carrier has asked the Indian government to waive some fees and provide tax exemptions, but it is unclear whether it will help despite the high wording.
New Delhi said it hopes India will become a global aviation hub created along the Dubai route, currently handling most of India's international traffic.
"In the coming years, the aviation industry is expected to be a hub for large-scale transformation and innovation, and India is ready to accept these possibilities," Modi told global aviation leaders on Monday.
However, this transformation will require billions of dollars in investment in airports and industry supply chains, as well as regulatory reforms.
Punch holes below weight
These numbers look promising.
IATA predicts that passenger flows in India will triple in the next 20 years, and the country aims to increase the number of airports to 2047, from 157 to 400 in 2024.
"We are quickly becoming a strategic connection country... India is also a natural connector for the sky and aviation," said Ram Mohan Naidu, the Indian Civil Aviation Minister, in New Delhi.
After the United States and China, India already has great growth potential.
According to IATA, India's most populous country accounts for about 17.8% of people, but only 4.2% of global air passengers.
IATA data shows that a record 174 million domestic and international passengers in India flew in 2024, while 730 million passengers in China.
"This prospect may be very positive for the Indian economy and the air transport industry. However, this result cannot be guaranteed," IATA said in a report on the Indian market.
Industry executives and analysts say more is to expand aviation-related infrastructure, update rules, reduce taxes and make life for airlines easier.
"Even regulators would agree that they need to update their regulations because India has no reason to slam its weight. In fact, it weighs very much less than its weight," said Subhas Menon, director general of Asia Pacific Airlines.
For example, Dubai-based Emirates said it needed to relax capacity restrictions on foreign airlines to enable the industry to reach its full growth potential.
"For every seat we offer, especially on the top of the hill, we have three to 10 people trying to get it," UAE President Tim Clark told reporters.
Among other issues, India lacks sufficient domestic maintenance, repair and overhaul facilities to take care of its fleet, so it relies too much on foreign stores, especially engines in the face of fierce competition for repair slots.
IATA Director-General Willie Walsh said global airlines were seated on the ground because there were not enough facilities to serve them.
"I think the fuselage maintenance is a huge opportunity for India because you need labor and you need skills. That's what I know India is investing in," Walsh said.
Global airline growth is being extended by extended delays due to supply chain issues to deliver new, more fuel-efficient aircraft.
India's largest airline, Indigo, has been leasing aircraft to expand internationally while waiting for new aircraft. This week, it partnered with France-KLM, Virgin Atlantic and Delta to use the network of these airlines to expand the scope of Indigo tickets.
(Reported by Abhijith Ganapavaram and Nandan Mandayam of New Delhi, other reports by Shivansh Tiwary; Writing by Lisa Barrington; Editing by Jamie Freed and Mark Potter)