indian civil aviation – indian civil aviation –––the ......build “brand india”: apart...

South Asia’s leading aviation advisory and research practice

Indian Civil Aviation Indian Civil Aviation Indian Civil Aviation Indian Civil Aviation –––– The USD250 The USD250 The USD250 The USD250

billion investment opportunitybillion investment opportunitybillion investment opportunitybillion investment opportunity

February 2019

[email protected]

© 2019 CAPA India

DisclaimerDisclaimerDisclaimerDisclaimer

The information and analyses contained in this report have been prepared by Centre for Asia

Pacific Aviation India (CAPA India). The contents of the document are confidential.

While every effort has been made to ensure that the report adheres to the highest quality

and accuracy standards, CAPA India assumes no responsibility for errors and omissions

related to the data, calculations or analysis contained herein, and in no event will CAPA India,

its associates, subsidiaries, directors or employees be liable for direct, special, incidental or

consequential damages (including but not limited to damages for the loss of business profits,

business interruption and loss of business information) arising directly or indirectly from the

use of (or failure to use) this document.

This document contains forward-looking statements. Such statements may include the words

‘may’, ‘will’, ‘plans’, ‘estimates’, ‘anticipates’, ‘believes’, ‘expects’, ‘intends’ and similar

expressions. These statements are made on the basis of existing information and simple

assumptions. Such forward-looking statements are subject to numerous caveats, risks and

uncertainties, which could cause actual outcomes to be materially different from those

projected or assumed in the statements.

IMPORTANT NOTES

Use of any data, information, or portions of this document without prior written

consent of CAPA India is strictly prohibited. Data is for illustrative purpose only.

Some data points/numbers have been approximated for confidentiality.

© 2019 CAPA India 5

Source: CAPA India research and analysis

Investments and economic impact growth of civil aviation is estimated to Investments and economic impact growth of civil aviation is estimated to Investments and economic impact growth of civil aviation is estimated to Investments and economic impact growth of civil aviation is estimated to

continue to outperform GDP growth through 2040continue to outperform GDP growth through 2040continue to outperform GDP growth through 2040continue to outperform GDP growth through 2040

India's GDP size Civil aviation’s economic

impact (estimated)

Civil aviation investments

2003

2018

2040e

Civil aviation has a multiplier effect on the economy through direct, indirect, induced impact.

The industry’s economic impact is estimated to have increased from less than 1% of GDP in 2003 to

almost 7% of GDP in 2018. It is projected to increase to almost 9% of GDP, or USD1.1 trillion by 2040.

The comprehensive scale and potential of the industry is yet to be covered in totality which prompted

CAPA India to initiate this study.



Indian civil aviation: A USD250 bn investment opportunityIndian civil aviation: A USD250 bn investment opportunityIndian civil aviation: A USD250 bn investment opportunityIndian civil aviation: A USD250 bn investment opportunity

2018

Airport Fleet Ground handling MRO Cargo Misc.

100% = USD250 bn

2040e100% = USD48 bn

Indian civil aviation industry has attracted cumulative investments of USD48 bn during last 15 years.

By 2040, the industry could attract an additional USD250 bn.

90%+ of incremental investments are expected on aircraft acquisition and airport development.

5.3x



Civil aviation industry in India attracted cumulative investments of USD48 bn Civil aviation industry in India attracted cumulative investments of USD48 bn Civil aviation industry in India attracted cumulative investments of USD48 bn Civil aviation industry in India attracted cumulative investments of USD48 bn

during 15 years. This value is 8.6% of all completed projects in India.during 15 years. This value is 8.6% of all completed projects in India.during 15 years. This value is 8.6% of all completed projects in India.during 15 years. This value is 8.6% of all completed projects in India.

USD10 bn (almost equally split between AAI & private

operators)

USD 30 bn (value of a/c); fleet 550

USD0.4-0.5 bn

USD0.3 bn

USD0.3 bn

USD 0.3-0.4 bn

USD 6 bn

Airports (incl. ANS)

Scheduled airline

fleet

Ground Handling

Cargo

Miscellaneous

MRO

General aviation +

Training fleet


Notes: INR:USD=70Source: CAPA India research and analysis

Airport and associated investments envisaged by 2040Airport and associated investments envisaged by 2040Airport and associated investments envisaged by 2040Airport and associated investments envisaged by 2040

USD 60-65 bn, to cater to an estimated airport traffic of

almost 2 bn

Brownfield &

Greenfield

USD2-2.5 bn (at 12-15 airports)Cargo

USD 0.5 bnFBO



By 2040, value of aircraft fleet to be inducted are estimated at USD161By 2040, value of aircraft fleet to be inducted are estimated at USD161By 2040, value of aircraft fleet to be inducted are estimated at USD161By 2040, value of aircraft fleet to be inducted are estimated at USD161----173 bn 173 bn 173 bn 173 bn

(on deal price)(on deal price)(on deal price)(on deal price)

Fleet

Scheduled operators General aviation

Narrowbody Business jets

Widebody Helicopters

Regional

USD106-111 bnUSD10-12 bn, for an

estimated fleet of 600-620

USD36-40 bnUSD5-6 bn, for an

estimated fleet of 820-840

USD4-4.5 bn


USD4.3-4.4 bn (1.3-1.4 for non-scheduled, and 3 for

scheduled)

USD 1.7-2.0 bn

USD1.0 bn (for 3000-3300 a/c) includes cost of other

infrastructure and replacement of current capacity

USD1.0 bn

Notes: INR:USD=70Source: CAPA India research and analysis

Investments envisaged in other aviation segments, by 2040Investments envisaged in other aviation segments, by 2040Investments envisaged in other aviation segments, by 2040Investments envisaged in other aviation segments, by 2040

MRO

Ground handling

Simulators

Flying

school/training


Civil aviation industry plays an extremely crucial role on multiple facets. It should therefore be a critical

pillar of any policy making framework.

Interlinkages with several other businesses and sectors which drive economic activity:

● Economic benefits span key sectors such as petroleum and chemicals; manufacturing; construction;

transportation; trade and commerce; banking and insurance; retail; supply chain and logistics;

IT/technology; tourism including hotels/hospitality and allied industries.

Creates direct and indirect jobs apart from multiplier impact.

Creates strong invisible assets through people to people connect, including Indian diaspora of almost

16 million across the globe, and geo-political convergence. This crucial benefit of aviation is beyond

quantification.

Build “Brand India”: Apart Bollywood and cricket, aviation is perhaps the only other sector which can

contribute to build “Brand India” at a global scale.

Civil aviation industry should be a critical pillar of policy making in light of its Civil aviation industry should be a critical pillar of policy making in light of its Civil aviation industry should be a critical pillar of policy making in light of its Civil aviation industry should be a critical pillar of policy making in light of its

multiplier economic impact, and more importantly a stronger invisible impact. multiplier economic impact, and more importantly a stronger invisible impact. multiplier economic impact, and more importantly a stronger invisible impact. multiplier economic impact, and more importantly a stronger invisible impact.

indian civil aviation – indian civil aviation –––the ......build “brand india”: apart...

Documents