Aligning India’s Aviation and Tourism Sectors

A Sweet Spot Awaits to be Tapped for More Comprehensive Growth

The time has come for all stakeholders from the Government and industry to be on the same page. Synergies resulting from such collaboration will make growth in both aviation and tourism more efficient and impactful.

Arvind Singh
Former Secretary Tourism, GoI and former Chairman, Airport Authority of India

While the initial post Covid surge in tourism in India was fuelled by ‘revenge tourism’ by domestic travellers, it has gained in strength in subsequent years. In recent times, we have witnessed significant growth in both domestic and outbound travel whereas inbound numbers are nearing the pre Covid figures. The domestic travel spurt has been aided by visible growth in road, rail and aviation infrastructure during the last decade. These trends have led to high hotel occupancy rates, growth in average tariffs and high-capacity addition by leading chains during this financial year.

Highways have seen additions in total kilometre lengths year after year and we have seen several new and iconic projects commence operations including expressways, tunnels, bridges, the coastal road and trans harbour sea link at Mumbai. Railway electrification work has seen substantial progress and new routes and trains such as the Vande Bharat has eased travel for both inter and intra state state commuters. The civil aviation sector has grown by leaps and bounds in terms of number of passengers, flights to newer locations, rise in number of airports and aircraft in service in the country.

The number of domestic air passengers in October 2024 is 12 percent higher than the pre Covid numbers while the figure for the first seven months of this FY is 12.6 percent higher than the pre Covid levels.

A recent study expects international passenger traffic for Indian carriers to grow by 15 – 20 percent in the current FY. As a result, airlines have seen higher yields this year.

The AAI and private airport operators have an ambitious capex plan to develop/upgrade brownfield airports and build greenfield airports to cater to the rising demand for air travel.

Several new airports have come up under the UDAN scheme and over 15 million passengers have flown on UDAN flights since the scheme was rolled out. The plan is to operationalise 1,000 UDAN routes (579 routes in operation already) and to develop 100 unserved & underserved airports/heliports/water aerodromes in the near future; 85 such facilities have been put into operation by now.

Leading airlines have placed large orders for new aircraft to meet the expected growth in passenger numbers.

India ranks 6th globally in terms of Travel & Tourism sector’s total contribution to GDP and is one of India’s leading service industries. India offers inspiring world heritage sites and niche products that have fuelled the sector’s growth and opened up large employment opportunities. The vision of the Government of India is to earn $ 56 billion in foreign exchange and create 140 million jobs in the sector by 2030.   The recent G20 presidency provided a unique opportunity to showcase the country’s diversity and rich traditions to the visiting delegates from member countries. Further, the Vision 2047 Viksit Bharat exercise aims at goals of a $ 1 trillion tourism sector and 100 million inbound tourist arrivals. Achieving these ambitious goals will require implementation in a mission mode with emphasis on digital initiatives, green tourism, skill development, incentivising the private sector and developing robust destination management organisations.

The developments in the two important sectors of aviation and tourism cannot happen in silos. There is need for collaboration between the sectors both at the government and industry levels. This will lead to greater efficiencies and better planning of investments. For example, investments in new circuits and destinations by State and Central Governments may be planned as a collaborative exercise, leading to better implementation and creation of the required aviation infrastructure.

There are several examples of aviation infrastructure lagging behind the growth in tourist travel to some destinations while there are also instances of excess capacity at other locations. Likewise, we see a section of industry join issue with other stakeholders often: on subjects such as refunds by airlines, sticky and high fares on certain sectors and in certain seasons.

The time has come for all stakeholders from the Government and industry to be on the same page. Synergies resulting from such collaboration will make growth in both aviation and tourism more efficient and impactful.


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