Indian Aviation Industry has been one of the fastest growing aviation industries in the world. Since 2011, domestic traffic has grown at CAGR of 13%, whereas international traffic has grown at a CAGR of 8%. The high economic growth and rising middle class population in India during the last decade presented strong growth opportunities for the Indian aviation sector. In order to augment economic growth and promote sector development, the government initiated several policies and enabling measures to support the creation of high-quality infrastructure and efficient delivery of services. As a result of this, India witnessed double digit growth in air travel over the last decade.
Covid-19 has caused disruptions in economic activities and transport industry, especially aviation, all over the world. The slowdown in the economy has led to significant fall in air travel demand, adding dismay to the sector’s recovery in short to medium term. The Indian aviation industry's capacity and passenger growth have been significantly impacted since the Covid-19 pandemic. The Ministry of Civil Aviation (MoCA) stopped international travel operations with effect from March 23, 2020, and domestic travel operations with effect from March 25, 2020. Post the initial recommencement of operations of the scheduled domestic flights with effect from May 25, 2020, to a limited extent, i.e. maximum one-third of their respective approved capacity of Summer Schedule 2020, the MoCA permitted increasing the capacity to 45% with effect from June 27, 2020, and further to 60% with effect from September 2, 2020. However, the recovery in domestic passenger traffic has been rather subdued, even though there is substantial sequential improvement. With effect from November 11, 2020, the MoCA has increased the permitted capacity to 70% and further to 80% with effect from December 3, 2020. Currently, the Indian airlines are operating domestic flights at around 80% of their pre-Covid levels.
The aviation industry has repeatedly shown the resilience to come back stronger, bolder and smarter from previous crises. The operations at airports have been digitised and technology has provided a complete revamp of the operating model. For example, touchless check-ins, contactless and paper-less immigration, digitisation of cargo processes resulting in paperless transactions. With all the recovery prospects, the domestic passenger demand is expected to reach its pre-Covid levels in a period of 2-3 years in FY 23, whereas international demand recovery is expected to be relatively slower, taking 3-4 years and likely to reach its pre-Covid levels by FY24.
PwC’s Aviation Advisory Services is a dedicated team offering advisory services in the aviation sector and is one of the most renowned advisors in the civil aviation consulting space. The team has been successful in developing its mark in aviation advisory space in a short span of time and serving majority of important stakeholders, both public sector clients including ministry, regulators, state-governments, etc. and private sector clients covering stakeholders such as airport operators, airlines, investors, etc.