Budget 2024: Indian Airlines Order 1,000 New Aircraft, says FM Sitharaman
Presenting the interim budget, Finance Minister Nirmala Sitharaman announced that the Indian aviation sector has witnessed significant growth under the policies of the Modi government 2.0. She mentioned that Indian airlines have ordered 1,000 new aircraft, contributing to the sector's expansion. The Finance Minister highlighted the doubling of the number of airports in India to 149 and the addition of 517 new air routes, facilitating the travel of up to 1.3 crore passengers. Sitharaman assured that the Central government remains committed to further expanding the network of airports and introducing new air routes.
"The aviation sector has been galvanized in the past ten years. The number of airports have doubled to 149. The rollout of air connectivity to tier-two and tier-three cities under the UDAN 19 scheme has been widespread. Five hundred and seventeen new routes are carrying 1.3 crore passengers. Indian carriers have proactively placed orders for over 1000 new aircraft. Expansion of existing airports and development of new airports will continue expeditiously", Sitharaman said.
Under the ownership of the Tata Group, Air India has finalized orders for 470 aircraft, comprising 250 from Airbus and 220 from Boeing. The Boeing order includes 190 B737 MAX, 20 B787, and 10 B777X planes. Additionally, the deal encompasses options for an extra 50 Boeing 737 MAX and Boeing 787, making a total of 290 planes, with an estimated value of $45.9 billion at list price. Meanwhile, IndiGo, a prominent low-cost carrier in India, is set to acquire 500 aircraft.
Besides this, Nirmala Sitharaman also said that the government will spend 11.10 percent more on infrastructure, which is on par with India's nominal growth estimate. Sitharaman's remarks come as global industry experts are optimistic about India as a growing market in the aviation sector. Joshua Ng, a director at Singapore-based Alton Aviation Consultancy said: "A lot of investment is required in India and FDI is flowing in", citing the progress of Singapore Airlines and Tata Group joint venture aimed at rebuilding Air India.
Alan Lim, the Singapore-based aviation consultant, said that intra-city trips could be a big thing in India. "India has a lot of congested cities and Urban Air Mobility (UAM) has the potential to succeed in those areas. Transportation demand is going to grow and intra-city trips are going to create sufficient demand to build a UAM market. Overall, it is a very exciting growth story for both traditional and new technologies in aviation", Lim said.
Boeing India President Salil Gupte said that India is one of the fastest-growing civil aviation markets globally and Indian airlines have placed orders for around 1,500 planes. Commenting on Sitharaman's announcement regarding the expansion of airports in India, Siddharth Tandon, Partner, Indirect Tax, BDO India said, “Expansion of existing airports and the development of new airports along with the extension of UDAAN scheme for regional connectivity would remain an area of key focus aiding tourism and development".
