India is now the world’s most populous country. Although it is hard to pinpoint an exact date, India’s population officially surpassed China’s earlier this year and now stands at 1.43 billion and counting.
India’s economy is growing alongside its population. Last year’s roughly 7 percent GDP growth was among the best in the world. Within that booming economy, one sector that has truly taken flight is aviation.
According to the latest long-term industry forecast from global consultancy Oliver Wyman, India’s commercial aviation sector is set to grow by 8 percent annually over the next decade, making it the fastest-growing market in the world by quite some margin. By comparison, the Oliver Wyman report predicts a 5.2 percent annual growth rate for China’s aviation sector, and 1.5 percent growth for those of North America and Europe.
India’s maintenance, repair and overhaul (MRO) sector is also expected to boom, with Oliver Wyman calling for 12.4 percent annual growth through 2033 (second-place China will see its MRO sector expand by 6.9 percent annually).
While it might be tempting to simply chalk up the rosy forecast for India’s aviation market to its demographic growth, Satair’s Account Director for South Asia, Vinod Dattani, said it’s not quite that easy. India’s aviation success is just as much a matter of policy as it is population, he said.
“One of the biggest driving factors out here is the willingness of the government to support the aviation industry,” Dattani told the Satair Knowledge Hub from Delhi.
Dattani said that governmental decisions to lower and simplify taxes within the MRO sector, double civil aviation infrastructure by 2025 and encourage domestic manufacturing through the ‘Make in India’ initiative were some of the driving forces behind the aviation sector’s growth.
The liberalisation of the aviation sector, particularly the privatisation of Air India, is also a key factor.
“As a government company, Air India wasn't doing all that well but they were the market leaders here,” Dattani said. “When the market leader was not doing well, the industry as a whole was a bit neglected. But with privatisation, there’s now a lot more competition between the operators and there's a lot more demand for the MROs to do maintenance work within India.”
Air India, which began as Tata Air Services in 1932, returned to Tata Group control in January 2022 with a $2.4 billion purchase that, in the words of the airline, “completed a full circle back to its roots.”
After just a year in private hands, Air India announced the largest order of new passenger aircraft in history when it agreed to buy 470 new planes – 250 from Airbus and 220 from Boeing. The total purchase price was roughly $70 billion.
“After taking over the airline from the government, the Tata Group was in a commanding position to negotiate with both Airbus and Boeing to a level where they would feel confident placing such a large order,” Dattani said. “I think the Tatas realized that the best way to move forward would be to have a newer fleet, which would not only make for better comfort levels for its customers but would also have better fuel efficiency.”
Dattani said that with the purchase including orders for 60 widebody aircraft, Air India clearly “has bigger ideas about being a global player rather than just looking at the domestic market.”
The Air India purchase, while historic, is only part of the country’s rapidly expanding fleet. The Oliver Wyman report predicted that India’s fleet would more than double by 2033 – going from the current 626 aircraft to 1,350. Minister of Civilian Aviation Jyotiraditya Madhavrao Scindia has expressed even more optimism, saying that the doubling of the fleet would happen as soon as 2027.
With this rapid expansion, the need for MRO services will also grow. Dattani said the domestic MRO industry is well-positioned to handle the uptick in business. India already has some of the best airframe MROs in the region and there is an increased focus on establishing more component MROs as well.
“Airlines can get most of the airframe work done within the country but then when it comes to the other components, they have to send the aircraft out,” he said. “The airlines want India to have that one-stop solution and Most of the people I speak to in the MROs are looking to focus on having all the capabilities under one roof.”
Unlike other parts of the globe, India does not have to worry much about having the labour force needed to accommodate MRO growth. While it’s been estimated that the industry will need at least 600,000 new technicians over the next decade, Dattani said that India is much better positioned than other regions. There is no imminent shortage of mechanics like there is in North America, where the Oliver Wyman report predicts a shortfall of more than 12,000 mechanics, which amounts to 14% of the region’s total mechanic workforce
“There’s no mechanic shortage in India,” he said. “I don’t see India running into problems because of the size of the population and because literacy levels are rising. Academically, we are very strong.”
He added, however, that the quality of education at India’s aircraft maintenance engineer (AME) programmes should be “finetuned” so that young mechanics enter the workforce with more practical skills.
All in all, Dattani shares the same optimism in India’s aviation sector that led to Oliver Wyman’s rosy forecast and Air India’s historic purchase.
“Having spent two decades in this industry, and comparing the growth I’ve seen over the last to what I've seen in the past decade and a half, I'm not surprised at all that India’s fleet is on the verge of doubling,” he said.
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This blog is driven by Satair Marketing & Communication with input from both internal and external contributors.
Satair is a world leading provider of aftermarket services and solutions for the civil aerospace industry. Satair is a stand-alone company and Airbus subsidiary.