A reckoning for India’s aviation sector

UPSC Syllabus: Gs Paper 3- Infrastructure (Airports)

Introduction

India’s civil aviation sector stands at a critical stage of rapid growth and rising stress. Passenger traffic, fleet size, airport capacity, and economic contribution have expanded significantly. At the same time, operational breakdowns, safety concerns, pilot shortages, and regulatory gaps have exposed structural weaknesses. The December IndiGo disruption highlighted systemic strain. The sector now faces a decisive moment where expansion must align with institutional strength and safety.

Status of India’s Aviation Sector

• India recorded 43 million air passengers in FY24, growing at 15% YoY, with daily passengers crossing 5 lakh in 2024.
• The sector contributes 5% to GDP, supports 4 million jobs, and adds $72 billion in gross value to the economy.
• Fleet strength stands at 941 aircraft (2025), while 162 airports (up from 74 in 2014) are operational, with metro capacity targeted to reach 468 MPPA.
• India handled 3,365.65 MMT air cargo in FY24, strengthening logistics and e-commerce supply chains.
• India leads globally in gender diversity with 15% women pilots (3× global average).
• Sustainability advances include 73 airports using 100% green energy.

Major Concerns Related to India’s Aviation Sector

1. Operational breakdowns and financial strain:The June 2025 crash, large-scale cancellations, and prolonged delays disrupted passengers and weakened confidence. Both IndiGo and the Air India group are preparing for major losses as profits have declined sharply.
2. Overstretched expansion model: India operates over 840 aircraft and carries more than 350 million passengers annually, making it the world’s third-largest domestic market. This rapid expansion has outpaced institutional and manpower capacity.
3. FDTL and crew incompatibility: The revised Flight Duty Time Limitations reduced night operations and tightened flight-hour ceilings. Even the 60-hour weekly cap, higher than the healthy 40-hour benchmark, proved incompatible with existing crew strength.
4. Severe pilot shortage: India needs 7,000 pilots between 2024–26 and 25,000–30,000 over the next decade. Only 5,700 Commercial Pilot Licences were issued between 2020–2024. Trainer shortages, simulator limits, and type-rating constraints restrict supply, while 236 temporary foreign approvals in 2025 remain a costly stopgap.
5. Regulatory capacity deficit: Nearly 50% of DGCA technical posts remain vacant despite growing fleet size. Disruptions are managed through exemptions instead of strict enforcement, reflecting fragile oversight.
6. Duopoly and systemic risk: IndiGo holds 63–65% of domestic traffic and the Air India Group holds 27–28%, together controlling nearly 90% of the market. IndiGo operates as the sole carrier on 4% of routes, so disruptions lead to loss of connectivity.
7. Structural financial vulnerabilities: Failures of Kingfisher Airlines, Jet Airways, Go First and others show weaknesses such as cost competition, weak regional demand, poor management, infrastructure limits, and ATF price volatility linked to the U.S. dollar.

Initiatives Taken

1. Grant of NOCs to regional carriers: In December 2025, NOCs were granted to Shankh Air, Al Hind Air, and FlyExpress. These aim to improve regional connectivity and serve unattended routes.
2. Expansion under the UDAN scheme: The UDAN scheme operationalised 625 routes and 85 airports, including 102 new routes in the Northeast, targeting 1.5 crore commuters. It seeks to strengthen regional access and reduce dependence on major carriers.
3. National Civil Aviation Policy (NCAP): This aims to improve the international footprint of India-based airline services. Airlines can commence international operations, provided they deploy 20 aircrafts or 20% of their total capacity (whichever is higher) for domestic operations.
4. Open sky policy: Aims to liberalise the aviation sector in India by opening the airport sector to private participation. Currently, 6 PPP airports are being developed and 60% of airport traffic is handled under PPP.
5. Open Sky Air Service Agreement: Open Sky Air Service Agreement allows for airlines from the two countries to have an unlimited number of flights as well as seatsto each other’s jurisdictions. India has signed these agreements with multiple nations like the US, Greece, Jamaica, Japan, Finland, Sri Lanka.
6. FDI Policies : 100% FDI is being allowed under the automatic route for greenfield projects, whereas 74% FDI is allowed under automatic route for brownfield projects.
7. Tax and Duty cuts: 100% tax exemption has been provided for airport projects for a period of 10 years. Indian aircraft Manufacture, Repair and Overhaul (MRO) service providers have been completely exempted from customs and countervailing duties.
8. GAGAN (GPS-Aided Geo-Augmented Navigation): Developed jointly by AAI and ISRO, GAGAN is India’s own Satellite-Based Augmentation System (SBAS). Operational since 2015, it enhances the accuracy and integrity of GPS signals, improving navigation, especially for approach and landing, and enabling precision approaches at non-instrumented airports, thereby significantly enhancing safety, particularly in challenging terrains.
9. Bhartiya Vayuyan Adhiniyam, 2024: This is a landmark piece of legislation that came into effect on January 1, 2025, replacing the nearly century-old Aircraft Act of 1934. It modernizes India’s aviation system, aligning it with contemporary needs and global standards (like the Chicago Convention and ICAO).

Need for a Systemic Solution

1. Rising safety violations: By late 2025, 19 DGCA safety notices cited FDTL breaches, quality lapses, unauthorised cockpit access, and expired emergency equipment. This shows operations are near unsafe limits.
2. Lack of operational buffers: Globally, airlines maintain 20–25% spare crew capacity, while Indian carriers operate at near-total utilisation. Minor disruptions therefore spread across the network.
3. Future demand pressure: India accounts for 2% of global air traffic, and domestic demand may reach 715 million passengers by 2030. Without structural reform, growth may convert into recurring crisis.

Way Forward

1. Expand workforce and training capacity: Pilot training, simulators, and type-rating facilities must expand before further fleet growth.
2. Strengthen regulatory enforcement: DGCA vacancies must be filled, and rule-based enforcement must replace exemption-based management.
3. Stabilise cost structure and regional support: Effective UDAN implementation, better slot allocation, coordinated Tier-2 and Tier-3 infrastructure, and measures to address ATF volatility are essential.
4. Learn from past failures: Earlier airline collapses show the risks of aggressive expansion, weak governance, and financial mismanagement. Structural reform must prevent repetition of these patterns.
5. Promote ‘Start-up India’ initiative in the aviation sector-Entrepreneurship must be promoted in the maintenance, repair, and overhaul (MRO) facilities of the aviation industry.
6. Rationalisation of taxes- Tax rationalisation must be initiated in aviation fuel taxes (State and Central, which in India are among the highest in the world), air cargo and airport operations.
7. Safety Management Systems (SMS) Effectiveness: Ensure that all aviation service providers (airlines, airports, MROs, ATC) have fully functional and effective SMS that are integrated into their daily operations and decision-making. Regulators should audit the effectiveness of these SMS, not just their presence.

Conclusion

India’s aviation sector reflects both impressive expansion and emerging structural strain. Strong passenger growth, infrastructure expansion, and policy reforms coexist with pilot shortages, regulatory gaps, and safety concerns. With demand projected to reach 715 million passengers by 2030, sustained progress now depends on strengthening oversight, workforce capacity, financial stability, and resilience to ensure balanced and safe growth.

Question for practice:

Illustrate the key structural challenges facing India’s aviation sector and explain why rapid expansion without matching institutional capacity has led to systemic stress despite significant growth and policy reforms.
Source: The Hindu