Noida: Prime Minister Narendra Modi on Saturday inaugurated the Noida International Airport in Jewar, Uttar Pradesh. Uttar Pradesh Chief Minister Yogi Adityanath also graced the event. The airport, which is considered to be a dream project of the BJP government, will not only boost connectivity, but could also plug the ‘revenue leakage’ in India’s aviation sector.
The government has launched several projects to uplift the India’s aviation market. However, it may be noted that some amount of earnings from the sector are flowing out of the country. Indian passengers heavily rely on foreign hubs like Dubai, Doha, and Singapore, for international flights, thus allowing those countries to capture earn margin revenues from transit, retail, and connecting flights.
According to a CAPA report, in FY20, around 69 per cent of Indian passengers taking flights to Europe and North America flew via Dubai, Abu Dhabi, and Doha. This reflects that India’s international traffic is becoming a source of revenue for foreign airports.
Notably, the UAE accounts for 27% of India’s international traffic, Additionally, GrabOn data shows. This reflects the entire ecosystem built around transit passengers, including duty-free shopping, lounges, retail, and connecting flight revenues. Besides this, India is also not able to get a major source of revenue through Maintenance, Repair, and Overhaul (MRO).
Indian airlines have placed orders for 1,359 new aircraft in the past two years. However, about 90% of aircraft maintenance is still conducted in foreign countries, such as Singapore, Dubai, and Malaysia. Upstox quoted Citing Grand View Research to state that approximately $2.5 billion flows out of India every year.
Jewar Airport
The government has designed the Noida International Airport in a manner that it would function as a transit hub so that Indian passengers can connect from within the country itself. MRO services are being developed so that aircraft maintenance spending can be retained domestically.
The government faces a major challenge to turn Noida International Airport into a successful transit hub. International connectivity needs to be expanded rapidly so the airport can establish itself on the global route map.