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Aviation growing more than railways, number of travelers expected to double to 400 million

Aviation Sector: The growth opportunities for airlines are tremendous, as the number of passengers will double from the current 200 million to 400 million in the next seven to 10 years. Union Civil Aviation Minister Jyotiraditya Scindia has said this. Speaking at an ASSOCHAM event on CEO’s Round Table Discussion, the Minister said that in Aviation (AC-Segment) it is competing closely with Railways.

The minister said, “Railways today carry 12.5 crore passengers in first and second class ACs, on the other hand airlines carried 14.4 crore domestic passengers to the destination before the pandemic and in the next 5 to 10 years, civil aviation will be able to operate this limited segment. It will prove to be a shield for transportation.” The Union Minister said that Railways is growing at 5.6 per cent CAGR while civil aviation is growing at 10.3 per cent CAGR.

Talking about the growth, Scindia said that from the fleet size of around 400 aircraft in 2013-2014, it has now grown to around 700 aircraft. And it can go up to 1,200 in the next 5 years.

He said, “In 2013-2014 we had only 74 airports, we have added 67 airports alone in the last 8 years. Most of the future growth is going to come from regional airports, the growth rate in metro airports is in 2010-2015. The growth in non-metro airports has increased from 10.8 per cent in 2010-2015 to 31 per cent currently. Government is formulating new policies to enable rapid growth of the industry. And working relentlessly to remove the obstacles.”

Speaking in the interactive session, Ajay Singh, Senior VP Assocham and CMD SpiceJet, said, “The Government and the Civil Aviation Minister have been very proactive in engaging with the sector, they have given us their time and they are aggressively addressing the needs of the sector. We have been talking about this whole concept of taxes on fuel for the longest time and it is Minister Scindia who reached out to the states regarding this issue and VAT on fuel on behalf of many of them. There has been talk of reducing it from 25-30 per cent to 0-5 per cent. The success of the regional connectivity plan, the success of the disinvestment of Air India can also be credited to the minister.”

ASSOCHAM Secretary General Deepak Sood said, “This forum is important for the aviation sector, as it will play a vital role in the development of India as a growth promoter and as a nation. This sector has been hit by the pandemic and Currently under stress, but it has shown resilience and recovered the growth trajectory.”

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