A new sunrise for India’s aviation industry in 2022!

By Sanjeeb Kumar Sahoo

As net industry losses are expected to reduce to $11.6 billion in 2022 after a $51.8 billion loss in 2021, the aviation industry is poised to breathe easier. The last two years saw a significant rise in cargo activity amid new consumer habits backed by the e-commerce boost. The urgent need for medical supplies also fuelled the increase in operations.

The rise is continuing into 2022. The International Air Transport Association (IATA) reported that there was a 9.1% increase in air cargo demand in September. October saw a 9.4% increase.

Indian aviation industry will see new entrants in this year as Akasa Air — the new airline backed by ace investor Rakesh Jhunjhunwala and aviation veterans Aditya Ghosh and Vinay Dube — got the no-objection certificate (NOC) from the Ministry of Civil Aviation (MoCA) to launch commercial flight operations in the first half of August. And Jet Airways is all set restart domestic operations at the earliest in 2022 as a full-service carrier.

Last year, the National Company Law Tribunal (NCLT) approved the Jalan Kalrock Consortium’s resolution plan for Jet Airways, two years after the once-storied full-service carrier went into insolvency proceedings. Recently, the winning consortium of Jet Airways said it wants to infuse funds in the airline and has approached the NCLT to fast-track implementation of the resolution plan approved by the insolvency court in June this year.

Globally, there have been several low-cost startups emerging in recent years. The likes of PLAY and Norse Atlantic Airways have been making a name for themselves in Europe. With some experience under their belt, planned transatlantic expansions should be a seamless transition for the airlines. Those that have been slightly longer in the game will also be expanding their networks. For instance, French bee, which recently launched services to New York, will be heading to Los Angeles next spring.
There is also plenty of potential heading eastward with airlines looking to offer low-cost long-haul solutions. flypop is edging closer to deploying its A330s to India from the United Kingdom in order to cater to underserved markets.

In the meantime, the government of India plans to divest brownfield assets such as airports, thereby increasing competition in this sector under the National Monetisation Pipeline (NMP). At least 25 additional airports have been identified for monetisation in the next three years.

Furthermore, there has been an increased focus on iexpanding regional connectivity. In terms of the RCS-UDAN scheme, 948 valid routes have been awarded. Of these, 395 routes connecting 63 unserved and underserved airports, including six heliports and underserved airports, six heliports and two water aerodromes, have been operationalised. As per data, under UDAN 4.1, 168 routes were awarded during the year. The Ministry of Civil Aviation (MoCA) has set a target of operationalising as many as 100 unserved and underserved airports and starting at least 1,000 RCS routes by 2024.

The article was published on 2nd January Print Edition, 2022

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