India / Jet Airways will make a comeback into Indian skies: Scindia

New Delhi: Jyotiraditya Scindia, Union Minister of Civil Aviation, on Thursday said competition in the civil aviation space is extremely important, and there should be at least four-five airlines in a country like India so that customers have a choice. In that context, he mentioned that India will have two new airlines next year along with a completely new Air India.

"On that note let me tell you, the first time in the last two decades when you see an era in civil aviation where as opposed to airlines being weeded out and closing down you are actually going to see next year the birth of two new airlines. You are going to have a reborn avatar of Jet Airways and you are going to see Akasa come into the fold along with a new crescent Air India," the aviation minister said in a fireside chat with Rahul Shivshankar, the Editor-in-Chief - Times Now & Editorial Director, during the second-day of Times Now Summit 2021 being held in the national capital.

Scindia said over the last two months as a civil aviation minister his focus has been on bringing structural reforms in the industry. "For me what is important is to see that the resurgence that has happened is continued. For that, I have looked at both demand-side factors and supply-side factors."

He said the civil aviation sector in India has changed a lot--from a low-volume high margin game to a high volume-low margin game is being playout now.  

Speaking on the supply side issues that the Narendra Modi-led NDA government has addressed so far, he said, "In 70 years in India (from1947-2014) we have built 74 airports. In seven years from 2014 till date, under Prime Minister Narendra Modi, we have built 62 airports."

He further added that by 2024-25, India will have 220 new airports and heliports together. In the last seven years, democratisation of air travel has happened. "Today second-AC train fares of 6-8 hour train journey are 10-20% higher than airfares for that distance....The CAGR for air travel is 10.4% compared to 5.1% for rail travel. Over the next three years, many will switch from second, first-class AC train to air travel," the aviation minister said.

On the contribution of the aviation sector to the GDP

Speaking on the contribution of the aviation sector to the country's GDP, Scindia said: "Every dollar invested in civil aviation results in $3.25 in terms of GDP. It is also an employment multiplier. Every single direct job created in civil aviation creates six indirect jobs."

Talking about demand revival in the sector, he said 90% of aviation traffic has now recovered. "Last weekend we have seen a high of 3.80 lakh travellers per day. Pre-Covid high that India witnessed was 4.20 lakh passengers per day.  So we are only 10% below the pre-Covid high."

He further mentioned the seat load factor of planes, a crucial profitability metric for the industry has improved to 82% now as compared to the minimum 70-75% required for an airline to sustain. 

On Air India privatisation

Scindia said Air India's privatisation is a landmark event and a win-win for all the stakeholders. By disinvesting an airline that is making Rs 20 crore loss every day, the government has saved taxpayers money and ensured that the interests of employees, jobs are protected, the minister added. He further added that by the 3rd week of January the process of transfer of Air India to the new owner will be complete.