Budget 2023: Industry Expects Thrust To UDAN, Give Wings To Aviation Sector

Budget 2023: Industry Expects Thrust To UDAN, Give Wings To Aviation Sector

Along with the growth in air traffic, the region has experienced growth in aviation infrastructure, especially in terms of more routes and the development of airports. The industry anticipates that the next Budget will give the aviation sector wings, keeping in mind the past growth in air traffic.

The ambitious regional connectivity scheme UDAN (Ude Desh ka Aam Nagrik) is one such scheme of the government and it is going to add more feathers to its cap in the coming time. While 453 routes have already been started under the scheme connecting cities across the country and operationalizing 70 airports, more routes and airports will be added to the list with the rising demand for affordable air travel.

The UDAN scheme is applicable for a period of 10 years from the date of its notification. The government has set a target to operationalize 1,000 UDAN routes during the currency of the scheme and to revive and develop 100 unserved and underserved airports, heliports, and water aerodromes by 2024.

Suprio Banerjee, Vice President & Sector Head - Corporate Ratings, ICRA Limited, said:

"Focus on continuous improvement in regional connectivity through regional connectivity scheme (RCS) has been an ongoing focus of the government and we expect that to continue. Improving existing infrastructure and capacity at some key airports besides setting up newer airports has also been the need of the hour. Further, connectivity with the underserved/unserved airports to boost tourism needs improvement."

Similarly, the development of new airports as well as airport infrastructure has also recorded corresponding growth and Industry experts said that the momentum will continue in the next financial year. The total number of airports has nearly doubled from 74 in 2014 to over 141 in 2022.

Keeping in view the growth in aviation traffic, the government has accorded in-principle approval for setting up 21 Greenfield Airports across the country. Out of these, many Greenfield airports including Durgapur, Shirdi, Kannur, Pakyong, Kalaburagi, Orvakal (Kurnool), Sindhudurg, Kushinagar, and Donyi Polo, Itanagar, and Mopa have been operationalized.

Liberatha Kallat, Chairperson & Managing Director, DreamFolks Services Limited said:

"The global aviation industry has made a remarkable recovery, as travel restrictions have been lifted and a significant increase in air travel demand has been observed. Travelers are flocking to their favorite destinations, eager to check items off their bucket lists. India, ranking at the top among South Asian countries on the Global Travel Development Index, has seen a drastic increase in travelers, taking advantage of attractive all-inclusive packages and discounts. This has resulted in fast-paced growth driven by positive travel sentiments. The air travel recovery continued throughout November 2022, with total traffic rising 41.3% compared to the same period in 2021. The Asia-Pacific region continued to report the strongest year-over-year results, with all regions showing improvement. The demand for premium services has also risen drastically, driven by domestic leisure travel, Meetings, Incentives, Conferences, and Exhibitions (MICE), business travel, and foreign tourist arrivals (FTA). Travelers seek a variety of airport services, including lounges, food and beverage, spa, meet and assist, airport transfer, transit hotels, and nap rooms among others to enhance their travel experience. Hence, the government should announce special incentives for the use of sustainable technologies and practices in the construction and operation of airports, such as eco-friendly sleeping pods, and energy-efficient lounges. Furthermore, the government can announce tax incentives for the development of premium airport lounges, restaurants, and other amenities & investing in the development of high-end airport services and technologies, such as self-service kiosks, premium check-in and baggage handling, and airport transfers while renovating existing & upcoming airports".