The aviation industry is undergoing major changes. (symbolic)
India is celebrating the eighth anniversary of the UDAN (Ude Desh Ka Aam Nagrik) scheme. This is a testament to the success of the government’s vision to transform air travel. From PwC to Deloitte, every industry expert reiterated the success of Udaan and how it has enabled citizens of tier II and III cities to travel by air. Let’s take a look at what experts say about UDAN.
PwC said the Regional Connectivity Initiative (UDAN) would be more helpful in connecting smaller tier-2 and tier-3 cities in India to the aviation market. This brings numerous opportunities for economic growth and regional development, resulting in a more inclusive aviation landscape.
Promote tourism and trade
Elaborating on the change, Sky One chairman Jaideep Mirchandani said air travel has moved from exclusive to routine for a number of reasons, including the expansion of air services to smaller cities. This also promotes business travel, tourism and trade, thereby creating jobs and economic development in these areas.
Sustainable aviation fuel becomes game changer
A Deloitte report sheds light on the future of sustainable aviation fuel (SAF) production in India. By 2040, India is expected to produce 8-10 million tonnes of SAF, with an estimated capital investment of $70-85 billion (Rs 60-700 million). The investment is expected to create 1.1 to 1.4 million jobs in the SAF value chain while reducing annual crude oil import bills by $5 to $7 billion.
Reduce carbon emissions
Furthermore, using agricultural residues as feedstock to produce SAF may increase farmers’ income by 10-15%, providing a sustainable alternative to waste burning practices. The report states that this initiative can reduce carbon emissions by 20-25 million tons per year, while supporting the aviation industry’s decarbonization efforts.
future development
According to IBEF, demand for air travel is increasing in India. It is expected that by 2042, the demand will exceed 2,200 aircraft. In addition, more than 30 airport development projects are currently underway in the Northeast, further enhancing connectivity and infrastructure in the region.
Joshua Wu, director of Alton Aviation Consulting, also said India has the right ingredients to achieve this goal and they are moving in the right direction. The Indian aviation industry faces many adverse circumstances. We’re seeing a lot of activity, and this is just the beginning.
Airport project tax exemption
The Indian government continues to encourage the development of the aviation industry through various initiatives, including 100% tax exemption for airport projects for 10 years and exemption from customs duties for MRO service providers. The government plans to waive royalties and give steep discounts on lease rents to encourage MRO units to set up facilities at their airports.
Foreign direct investment approved
Furthermore, allowing 100 per cent foreign direct investment (FDI) in greenfield and brownfield projects through the automatic route reflects India’s commitment to attract investments in the global aviation industry. Between April 2000 and March 2024, foreign direct investment inflows into the Indian air transport industry, including air cargo, reached US$3.85 billion.
The golden decade of airlines
Rahul Bhatia, managing director of InterGlobe, said the way this government is working in the aviation sector is something I have never seen in 30 years. Akasa Air CEO Vinay Dubey also said that the golden decade of the airline is coming. The UDAN initiative has not only transformed air travel in India through advancements in sustainable aviation and digitalization initiatives, but has also positioned the country as a potential leader in the global aviation market. As experts agree, Udhan’s journey is the beginning of an exciting future for the Indian aviation industry.
