Budget 2025: Skyrocketing growth in Indian aviation, but challenges linger

In 2024, India’s civil aviation industry recorded tremendous growth via an increase in fleets, the development of new airports and an unprecedented growth in passenger footfalls. In 2025, the launch of two new airports is on the anvil – Jewar and Navi Mumbai airport – with a capacity to handle 12 million and 20 million passengers, respectively. Several new airlines from Kerala and Lucknow are anticipated to begin operations, boosting facilities and vibrant competition in the sector.

While this year holds much hope, challenges remain that require the government’s prompt attention if the ambitious goals of Indian aviation are to be attained. Data indicates service delays impacted 224,000 passengers last November, nudging airlines to spend Rs2.90 crore on facilitation. Meanwhile, flight cancellations affected more than 27,500 passengers, with Rs36.79 lakh paid as compensation.

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Therefore, two major hurdles hurting Indian aviation are highlighted below along with recommended solutions:

Supply chain issues: Global supply chain issues are affecting aircraft and engine deliveries to India. In 2024, domestic airlines augmented their fleet with 120 to 130 aircraft. In 2025, however, achieving this target may not be possible due to supply chain problems faced by both global aircraft manufacturers, Boeing and Airbus. Out of the capped production per month of 38 Boeing 737 Max planes, the manufacturer can deliver 25 to 30 aircraft only, leading to an overall reduction of more than 15 to 25 per cent in the targeted domestic fleet numbers. Imposed by US regulators on Boeing 737 MAX planes, this cap is meant to facilitate faster resolution of quality issues detected in its previous deliveries. As a result, IATA (International Air Transport Association) predicts severe supply chain issues will continue hurting the performance of airlines well into 2025, inflating costs and limiting growth.

Supply chain problems in engines have also affected maintenance operations of existing planes, leading to more grounding of aircraft. Engine manufacturers Pratt & Whitney and CFM International have admitted challenges in meeting delivery schedules, with a global backlog of thousands of aircraft orders. Till December 2024, 102 aircraft were grounded because of supply chain issues linked to spare parts and consumables from OEM (Original Equipment Manufacturer) manufacturers that are crucial for keeping aircraft airworthy.

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Budget 2025 recommendations: Any delay in aircraft delivery and its grounding adversely affects the financial standing of airlines. Typically, aircraft acquisitions are backed by debt facilities that put perennial pressure on airlines. For aircraft leased from foreign owners, the airlines continue bearing the burden of high lease rentals although the planes remain grounded due to technical problems with the engines. Accordingly, the government may consider offering financial solutions such as low-interest loans and measures that address this dilemma to help keep the airline companies operational.

At the global level, the government should consider strict implementation of foreign conventions such as the Cape Town Convention (CTC), thereby demonstrating compliance with global standards while creating a conducive environment for global lessors to offer higher discounts and amenable means of resolution. According to the Aviation Working Group report, India’s CTC compliance index rating has come down from 69 in December 2022 to 61 in December 2024. India’s position was also downgraded from ‘positive’ to ‘negative’ after lessors failed to repossess their aircraft in the GoAir insolvency case in May 2023.

2. Passenger safety and comfort: Between August 2022 and 13 November 2024, a total of 1,143 hoax bomb threats were reported by domestic airlines with 666 reported in October 2024, which soared to 999 in November. These threats caused huge disruptions to airline operations.

To address this, the Civil Aviation Ministry revised the Aircraft (Security) Rules, 2023, adding two new provisions –Rules 29A and 30A. These rules allow authorities to refuse admission to any person or group of persons on the aircraft (Rule 29A) and mandate penalties ranging from Rs 1 lakh to Rs 1 crore (depending on whether the offender is an individual or a large organisation with up to 300 employees) for circulation of false information that could “cause panic among passengers, crew, ground personnel, or the public, or disrupt civil aviation operations” (Rule 30A).

Budget 2025 recommendations: Despite legislation being in place, the investigative authorities have failed to properly handle the hoax bomb threats. A more proactive approach is necessary to resolve such issues. One recommends the laws be made more stringent to act as a deterrent against practices that compromise the safety of thousands of passengers.

The government should also note that the Bharatiya Vayuyan Vidheyak Act, 2024, which has replaced the Aircraft Act of 1934, fails to classify most offences as cognisable, limiting the registration of any FIR without court approval and restricting jail terms to under two years. Consequently, the Ministry of Civil Aviation must introduce the proposed amendment in the Suppression of Unlawful Acts against Safety of Civil Aviation Act (SUASCA), 1982, which takes note of cognisable offences. If these steps are taken, it will make air travel in India more comfortable, convenient and safer.

The author is Partner, JSA Advocates & Solicitors. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.