Union Budget 2026: Air India Express MD calls aviation reforms a ‘long-term growth’ blueprint

New Delhi: Air India Express Managing Director Aloke Singh hailed the Union Budget 2026-27 as a transformative blueprint for the aviation sector on Sunday, as the government introduced sweeping customs duty exemptions to bolster domestic aircraft manufacturing and maintenance.

Delivering the budget in Parliament, Finance Minister Nirmala Sitharaman announced that basic customs duty would be waived for raw materials used in the manufacture of aircraft parts, specifically targeting maintenance, repair, and overhaul (MRO) units within the defence sector. The government also extended these exemptions to components used in the production of civilian aircraft to stimulate local assembly.

"The Union Budget 2026–27 sends a strong and reassuring signal for India’s long-term growth, anchored in fiscal discipline and a sustained push on infrastructure-led development," Singh said in a statement. "The continued emphasis on capital expenditure and destination-focused investment provides a solid structural framework for the expansion of tourism and, by extension, the civil aviation sector."

Regional and Strategic Connectivity

The budget placed a heavy emphasis on unconventional aviation and regional accessibility. Key initiatives include:

• Seaplane Development: Incentives for the indigenous manufacturing of seaplanes and a new viability gap funding (VGF) scheme to subsidise seaplane flights.
• Tourism Integration: The development of five regional medical hubs and new eco-tourism destinations is expected to drive purpose-driven travel from the Middle East and Southeast Asia. "The Budget’s focus on strengthening medical value tourism and destination development is particularly relevant for aviation, as it creates high-frequency, purpose-driven inbound travel, especially from regions such as the Middle East and Southeast Asia. At the same time, the emphasis on developing heritage, archaeological, and eco-tourism destinations across multiple states will stimulate demand for air connectivity to Tier-2 and Tier-3 cities, supporting the next phase of domestic aviation growth," Singh observed.
• Tier-2 and Tier-3 Expansion: Infrastructure pushes are designed to link major metros with smaller cities, supporting what Singh described as the "next phase of domestic aviation growth."

Singh noted that the budget’s focus on professionalising the hospitality and tourism workforce addresses critical capacity needs. "Taken together, these measures create an ecosystem in which airlines like Air India Express are well positioned to play a meaningful role," he added.

Surging Demand

The policy shift arrives as the Economic Survey 2025-26 projects Indian airport passenger traffic to reach 665 million by the end of the decade. Currently, India handles roughly 412 million passengers annually, necessitating a rapid scale-up of both fleet size and ground infrastructure.

Beyond manufacturing, the government also proposed the creation of five university townships near industrial corridors to ensure a steady pipeline of skilled labour for the expanding aerospace industry.