SP’s Civil Aviation Yearbook 2021-2022 Aviation Industry –The Phoenix Rises from the Ashes

The COVID-19 pandemic had a huge impact on the airline industry in 2020 due to travel restrictions and a decimation in demand among travelers. This resulted in massive losses for the airlines and the entire aviation sector. Planes were grounded and millions of workers worldwide in the aviation sector lost their jobs. However, after nearly two years of being in a critical condition and barely surviving, the year 2022 marked a significant turning point for the global civil aviation market as it emerged from the depths of the COVID-19 pandemic. With the gradual easing of travel restrictions and the growing desire to explore the world again, air travel experienced a resurgence.

Consumer Demand And Spending

In 2022, consumer spending in the civil aviation sector was bolstered by low unemployment rates and accumulated savings during the pandemic. The pent-up demand for air travel, combined with improved economic conditions, fueled a robust growth in passenger numbers. Despite a global macroeconomic slowdown, the strong consumer sentiment towards air travel remained evident throughout the year.

International And Domestic Traffic

The recovery of international air travel outpaced domestic travel in 2022. Domestic passenger traffic experienced a 12 per cent increase compared to 2021, but still remained 20 per cent below pre-pandemic levels. Conversely, international passenger traffic surged by approximately 175 per cent but was still 30 per cent lower than the equivalent figures in 2019. However, the growth differential between international and domestic traffic is expected to narrow in 2023.

Total Global Traffic Forecast

Based on projections, total global passenger traffic (measured in Revenue Passenger Kilometers - RPKs) witnessed a remarkable 70 per cent increase in 2022, followed by an additional 20 per cent growth in 2023 as per IATA forecast. However, the recovery of the Chinese and Asia Pacific markets remains uncertain and holds significant implications for the overall outlook. Travel restrictions lifting and pent-up demand being unleashed, especially in China, is anticipated to drive the resumption of travel from mid-2023 onwards.

Financial Performance And Regional Outlook

Despite facing unprecedented challenges, the air transport industry exhibited resilience in 2022. The air transport industry posted a loss of nearly $7 billion in 2022 and is expected to deliver a profit of $4.7 bil- lion in 2023. This is a remarkable performance given the $138 billion loss seen in 2020. Traffic is projected to experience a record growth rate during the year, with a slightly slower pace expected in 2023 and beyond. Financial performance across different regions has shown signs of improvement since the substantial losses incurred in 2020. North America leads the way in terms of profitability, while Europe and the Middle East are anticipated to return to profitability in 2023. Latin America, Africa, and Asia Pacific may require additional time to achieve sustainable profitability.

Set of kind words from Dr S. Radhakrishnan, Second President of India, addressed to our Founder Editorin- Chief, in March 1966 in the context of our first Yearbook - the ‘Military Yearbook’ launched in 1965, and now known as SP’s Military Yearbook. This very long-established background of the Yearbook has been the foundation of SP’s Civil Aviation Yearbook.

Following the path of the first Yearbook, SP Guide Publications had introduced SP’s Civil Aviation Yearbook in the year 2018 to fill the vacuum of such a detailed reference document on civil aviation industry covering not just India but the countries across Asia. SP’s Civil Aviation Yearbook strives to remain the leader in Asia after having become the first mover in the space of civil aviation reference document.

Cargo Market Performance

The cargo market has outperformed the domestic and international passenger sectors. Although cargo tonne kilometers (CTKs) have moderated, the associated revenue is expected to surpass 2019 levels due to the rebound in global trade. Despite the pressure on yields as belly capacity returns, the share of cargo in airlines’ total revenue increased significantly from 12 per cent in

2019 to 40.3 per cent in 2021. In 2022, cargo account for nearly 27.7 per cent of airlines’ total revenue.

Aircraft Deliveries And Environmental Sustainability

Aircraft deliveries to airlines experienced a sharp decline in 2020 due to the pandemic and have yet to fully recover to pre-pandemic levels. However, as passenger air travel gradually rebounds, a resurgence in aircraft deliveries is expected, reaching 2019 levels by 2023. The industry’s commitment to environmental sustainability and the reduction of carbon emissions is reflected in the adoption of a collective long-term global aspirational goal (LTAG) to achieve net-zero carbon emissions by 2050.

Global Supply Chain

Air transport also plays a vital role in global supply chains, particularly for international trade in manufactured goods. Over the course

of Air Travel:

of this year, trade flows have been impacted by the softer global economy, in addition to the conflict in Ukraine and the various Covidrelated restrictions in Asia Pacific – a major manufacturing hub for the world’s goods. The WTO forecasts world trade will slow sharply in 2023 to just one per cent (from 3.4 per cent previously), as a result of the various headwinds in the global economy.

Indian Market

The Indian civil aviation market experienced a transformative year in 2022, marking its recovery from the pandemic’s aftermath. Airlines focused on expanding passenger counts and destinations, resulting in a mix of established carriers, newly privatised airlines, and emerging players that shaped the industry landscape.

The most significant development was the successful privatisation of Air India, the country’s flag carrier. After a two-year process, the airline transitioned to the Tata Group, bringing rapid changes despite initial challenges. Air India improved the passenger experience, addressed service and scheduling issues, and set its sights on global expansion under the leadership of Campbell Wilson. The Air India privatisation had an effect on other Tata Group-owned airlines, leading to the merger of Vistara and AirAsia India, operating as a budget carrier, with Air India.

A significant development was Air India’s historic order for 470 aircraft, impacting the Indian aviation sector and providing an economic boost to Western countries. Air India’s fleet expansion aims to support its ambitious growth strategies, positioning it as a strong competitor in the Indian market. Delivery of the first aircraft is expected by the end of this year, marking a significant step in Air India’s transformation into a world-class airline.

New players also emerged, with Akasa Air entering the market as an ultra-low-cost carrier aiming to connect Tier-2 and 3 cities to major hubs. The airline made a significant impact with its order for 72 Boeing 737 MAX aircraft and plans for international expansion in 2023. Jet Airways faced challenges in its revival plans, delaying its relaunch until 2023 due to obstacles from creditors, employees, and banks. Safety was a prominent focus in 2022, with SpiceJet facing temporary flight schedule reductions but later regaining full compliance.

The Ministry of Civil Aviation had a remarkable year in 2022,

Role of Air Cargo:

Cargo and supply chain operations facilitated the movement of goods and ensuring seamless connectivity, supporting the recovery and growth of global travel achieving significant milestones and implementing key initiatives to enhance the aviation sector in India. One of the notable achievements was the commencement of 50 new Regional Connectivity Scheme (RCS) routes. These routes have played a crucial role in improving regional connectivity and accessibility, benefiting travelers and boosting economic growth. Additionally, the Ministry awarded 140 new RCS routes under the UDAN 4.2 and 4.3 schemes, further expanding air connectivity to underserved areas of the country.

India’s re-election to the International Civil Aviation Organization (ICAO) Council for the 2022-2025 term was a significant diplomatic achievement. It reaffirmed the country’s standing in the global aviation community and provided an opportunity to contribute to international aviation policies and regulations.

The Directorate General of Civil Aviation (DGCA) played a pivotal role in the issuance of Commercial Pilot Licenses (CPL) in 2022. The year witnessed the highest number of CPLs issued in the last decade, indicating the growing interest and demand for aviation careers in India. This achievement reflects the DGCA’s commitment to maintaining high standards of aviation training and safety.

One of the key initiatives launched by the ministry was Digi Yatra, aimed at providing a seamless and hassle-free airport experience for travelers. By eliminating the need for multiple ticket and ID verifications at various touchpoints, Digi Yatra streamlined the check-in process and enhanced passenger convenience. This digital transformation initiative showcased the ministry’s focus on leveraging technology to improve the overall travel experience.

The ministry also took significant steps in regulating drone operations in the country. The introduction of the Drone Certification Scheme, Drone Import policy, and Drone (Amendment) Rules, 2022 demonstrated the government’s commitment to ensuring the safe and responsible use of drones. These regulations have laid the foundation for the growth of the drone industry in India while addressing security concerns.

Under the Krishi Udan 2.0 scheme, the ministry expanded air connectivity to agricultural regions by adding five more airports. With a total of 58 airports now included in the scheme, Krishi Udan has facilitated the efficient transportation of agricultural produce, benefitting farmers and contributing to the development of the agricultural sector.

Sustainablility:

As the production of SAF increases, it will become a more affordable and viable option for airlines to reduce the environmental impact of air travel

Overall, the Ministry of Civil Aviation’s performance in 2022 showcased its commitment to enhancing connectivity, ensuring passenger safety and convenience, and promoting the growth of the aviation industry in India. Through strategic initiatives and successful implementations, the ministry has played a vital role in transforming the country’s aviation landscape.

LOOKING AHEAD:

The global civil aviation market demonstrated resilience in the face of the COVID-19 pandemic, with 2022 marking a significant rebound. Despite the challenging environment, the industry showcased a strong recovery in passenger numbers and cargo performance. As we move into 2023, the sector is poised for continued growth, albeit at a slightly slower pace. The path to recovery remains dynamic and contingent on factors such as vaccination rates, travel restrictions, and economic stability. Nonetheless, the revival of air travel presents opportunities for stakeholders to adapt to the evolving landscape and explore new avenues for sustainable growth.

The Indian aviation market expects increased demand and airlines aim for sustained profitability, while passengers can expect expanded travel opportunities. As the industry continues to evolve, the Indian civil aviation market holds limitless potential.

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Clarifications:

 Data has been collated and analysed from various sources in each listed country including their official websites of Ministry of Civil Aviation, Directorate of Civil Aviation, Airports Authority and various airlines. Some of the other sources used are various business aviation association websites, IATA, ACI, Wikipedia and OEM websites. Despite this, variations are possible.

 Suggestions for improvement will be appreciated and carried out to the extent possible.

Aviation in India:

As one of the largest aviation market in the world, reflecting the country’s burgeoning economic growth, India has the potential to shape the future of global aviation

Acknowledgments

Several distinguished authors and industry experts have contributed to make this edition of SP’s Civil Aviation Yearbook an indispensable reference document that attempts to surpass international standard and quality. We at SP Guide Publications convey our sincere thanks to all of them for their contributions.

As usual, our research team comprising of Bharti Sharma, Rimpy Nischal, Survi Massey and the design team that includes Vimlesh Yadav, Sonu Bisht, did a splendid job under the guidance and supervision of Rohit Goel. It is their dedication and the hard work that has enabled an enormously updated edition. An edition that is not only comprehensive in its data and analysis, but also presented in a very easy-to-understand format.

Jayant Baranwal Editor-in-Chief