India’s aviation sector has new signs of hope as the Government plans to open 100 additional airports by 2024, according to people with knowledge of the matter. According to various reports surfacing online, Prime Minister Narendra Modi is planning to improve the infrastructural projects of the country. The plan to open 100 airports is a part of this infrastructural revival. Government has reportedly committed an investment of 1 trillion rupees towards building new airports. Overall, the infrastructural overhaul intends to make the economy of the country to $5 trillion by 2025.
Domestic Fleet Size will increase to 1,200 by 2024
Although the details are not revealed, the reports claim that the Government will announce 1000 new aviation routes connecting towns and villages. The Government will also initiate steps to start plane-lease financing business in the country. Another part of the plan is to increase the number of locally trained pilots to 600 a year. To ensure the job availability of these many pilots, the Government will also increase the domestic fleet size to 1,200 by 2024.
China is another country which has announced the plan to open 450 commercial airports by 2035.
The aviation sector has high hopes about the revenue from India’s middle class. There is an increasing trend among the middle-class choosing aviation as their preferred travel option. The trend has also attracted foreign players such as Singapore Airlines Ltd and AirAsia Bhd to establish domestic units.
Plans to reduce tax rates and jet fuel cost of aviation section
Tax burden still acts as a hurdle for the aviation sector. Another difficulty is the high aviation fuel price. According to sources, the Government is well-aware of these issues and is making serious consideration to make the situation bearable. The Government intends to rationalize the tax regime by next year.
In September 2019, the Government already reduced corporate tax rates. The action has placed India on the global map, on par with some of the countries having low tax rates in Asia, like Vietnam and Indonesia. This raises the hopes to bring in foreign investments to India amidst the trade tensions existing across the countries.