India Has To Evolve An Enabling Ecosystem To Emerge As A Global Airline Hub

Major hubs like Delhi, Mumbai, and Bangalore are nearing capacity. Expanding and modernizing these airports will be crucial to avoid bottlenecks in the future

India’s strategic location positions it as a competitive hub for routes connecting Europe, the Middle East, Africa, and Asia Pacific. This geographical advantage could enable 2-3 Indian airports to rival established hubs like Dubai, Abu Dhabi, Doha, Singapore, and Hong Kong.

A key opportunity lies in developing Indian airports as global hubs. This requires world-class infrastructure and airlines with competitive networks, fleet and products.

Air India, India’s leading global airline, and Bangalore International Airport Limited (BIAL) have entered into an agreement intended to develop Bengaluru as a premier aviation hub for southern India, with an aim to boost air travel connectivity to and from India over the next few years.

The agreement marks a significant milestone in the Indian aviation industry. Air India (along with other Tata Group airlines – AIX and Vistara) and BIAL will collaborate to enhance international connectivity, operational efficiency, and passenger experience over the next five years.

This includes strengthening the group’s presence at Kempegowda International Airport, Bengaluru (KIAB or BLR airport) through an enhanced network and establishing a dedicated domestic lounge for premium and frequent travellers of Tata Group airlines Air India and Vistara.

India’s airport modernization program has significantly improved infrastructure, while the privatization of Air India (AI) and IndiGo’s (6E) expansion are positioning these carriers for hub operations.

Air India aims to become a leading global airline with an extensive international network and modern widebody fleet. IndiGo is expanding its short- and medium-haul international network, attracting transfer traffic. CAPA Advisory predicts Indian carriers will add 150 widebodies by 2035, complemented by A321XLRs for medium-haul routes.

The complementary business models of Air India and IndiGo could capture both premium and price-sensitive passengers, leveraging India’s geography for connecting traffic through Indian airports.

India’s unique cultural offerings enhance its appeal as a stopover destination, potentially boosting long-term inbound tourism. The Indian government recognizes this opportunity and aims to support hub development.

However, successful airport hubs require decades of investment and effort. Dubai’s success stems from a 20-30 year national commitment to aviation and tourism.

Central and state governments must develop tourism infrastructure, ensure competitive costs, simplify visa processes, improve multi-modal infrastructure, promote destinations, enable cargo trans-shipment, invest in airspace efficiency, and prioritize safety and security.

Indian aviation is poised for unprecedented growth, with domestic and international markets expected to double by 2030. India has already seen tremendous growth in air travel, thanks to a booming middle class and rising disposable incomes. The country’s domestic passenger traffic shot up by 14.8 per cent in 2023-24 having carried 172 million passengers. Domestic passenger numbers could reach 600-700 million, while international traffic may hit 140-160 million annually.

This growth is expected to continue, with estimates forecasting 3 billion passengers by 2047. India is the third-largest domestic aviation market and its aviation sector has shown substantial growth, with a 15 per cent YoY increase in total air passengers handled across airports reaching 37.6 crore in FY24.

A notable trend in the Indian aviation industry is the increase in direct flights between India and international destinations. The UK-based air consultancy firm OAG recently compared data from 2019 to 2023, revealing that despite a slight dip in total international air traffic, the number of passengers opting for non-stop routes has risen significantly.

India's aviation industry has experienced significant growth in the past 10 years. The number of operational airports in the country has doubled from 74 in 2014 to 157 in 2024 and the aim is to increase this number to 350-400 by 2047. The domestic air passengers have more than doubled in the past decade, with Indian airlines significantly expanding their fleet.

India’s airport infrastructure is rapidly expanding. The number of operational airports is set to increase from 148 today to over 300 by 2047.

However, major hubs like Delhi, Mumbai, and Bangalore are nearing capacity. Expanding and modernizing these airports will be crucial to avoid bottlenecks in the future.

The Indian carrier fleet is projected to expand to 1,400 aircraft by 2030, replicating 90 years of growth in just 5-6 years. This rapid expansion, comparable only to China’s aviation boom, has the potential to transform India’s economy.

To support this growth, India must develop an enabling ecosystem, including institutional infrastructure, policies, regulations, and skilled workforce across the aviation value chain.

Efficient airports and a seamless passenger experience will be vital to compete on the global stage.

Innovations like integrated security checks, which can reduce wait times by 20-30 per cent, and the adoption of biometrics and AI-powered customer service, are among the measures that could significantly enhance the passenger experience.

India is well-positioned to become a major global aviation hub, but success will depend on significant investment in infrastructure, workforce development, and regulatory reforms.