New Delhi: India’s aviation sector is set for a dramatic rise in the coming years, but the journey requires a hefty investment in the global market. S&P Global Ratings has projected a staggering 170 billion dollar investment needed through 2030 to fuel the sector’s growth, driven by record aircraft orders and a surge in airport infrastructure development.
India, with its booming economy and burgeoning middle class, is experiencing a passenger traffic boom. According to government data, domestic passenger traffic is expected to double to 300 million by 2030, while international traffic is projected to more than double in the same timeframe. This rapid expansion is fueled by a growing demand for air travel and the government’s ambitious vision to establish global aviation hubs rivalling Singapore, Dubai, and Doha.
The Indian government has set an ambitious goal of doubling the number of airports by 2030.
India’s airlines have placed record orders for new aircraft, with Airbus and Boeing poised to deliver a staggering 1,700 new planes to the country to accommodate this burgeoning demand. This alone will require an estimated 150 billion dollars in financing.
S&P Global Ratings believes the timing is ideal for this investment surge. Favorable domestic financing rates and government policies encouraging foreign ownership are expected to make funding easier for the sector. “The timing is right to support higher borrowing. Rising passenger air traffic, relatively cheaper domestic financing rates, and conducive government policies on foreign ownership should boost funding prospects for the sector,” S&P Global analysts said as reported by Reuters.
To alleviate the financial burden, Indian airlines are expected to increase their reliance on aircraft lessors and domestic banks, offering alternative financing options.
