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Indian Aviation Industry

March, 2013

Brief Introduction

After the Indian aviation sector underwent liberalisation in late nineties, it has seen a flurry of private service airlines entering the industry. The aviation sector in India holds immense potential for growth; more so because it receives great impetus from the booming tourism industry driven by higher disposable incomes and favourable demographics.

Also, the robust policy regime created by the Indian Government acts as the blood-line of this industry. While the last five years have witnessed significant investments by large and small domestic companies, indigenous aerospace and defence industry has been evolving in a big way.

Recent developments and statistics pertaining to the sector are discussed hereafter.

Market Size

  • Total domestic passengers carried by the scheduled domestic airlines in November 2012 were 5.02 million (465, 000 higher than those carried in October 2012). The number of passengers carried by domestic airlines was 53.4 million between January-November 2012.
  • The market share of scheduled domestic airlines for the month of November 2012 was: Air India-20.7 per cent, Jet Airways-18.3 per cent, JetLite-6.9 per cent, IndiGo-27.3 per cent, Spice Jet- 19.5 per cent and Go Air- 7.4 per cent.

    The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 448.40 million from April 2000 to December 2012, as per the data released by Department of Industrial Policy and Promotion (DIPP).

Key Developments and Investments

  • Jet Airways has ventured with CentrumDirect (one of India's leading financial services groups), to offer Foreign Exchange Services to guests travelling abroad. The clients, or the guests, can avail this facility online by providing the stipulated details on the airline's website They will be then contacted by the authorised representatives from CentrumDirect in order to complete transaction.

    CentrumDirect offers 30 leading world currencies, travellers' cheques and prepaid travel cards across over 40 cities within India.

  • Singapore's Changi Airport and Switzerland's Zurich International Airport have expressed interest to carry out the operations and maintenance of the modernised terminal of the Netaji Subhas Chandra Bose International Airport, Kolkata. The Rs 2,300-crore (US$ 423.37 million) new integrated terminal has an annual capacity to handle 20 million passengers. It was jointly developed by ITD Cementation India Ltd and its parent company Italian-Thai Development Public Co Ltd, Thailand (ITD).
  • Hong Kong-based full service airline Cathay Pacific has unveiled its plan to add more direct flights from Mumbai to Hong Kong starting April 2013. The airline will also launch its new product line of the premium economy cabin on this route. Cathay that has India route among the top 10 revenue earners, along with its sister airline Dragonair, flies 46 weekly flights from six ports in India. It recently added Hyderabad in its network with four weekly flights.
  • IBS Software has signed a 'multimillion dollar' deal with Turkish Airlines for providing software support to its cargo service. The 10-year contract will make the airline have access to IBS' flagship product for air cargo operations named 'iCargo'. iCargo supports requirements of airline freight business by providing Web-enabled features that optimise operations, enhance profitability and provide scalability. iCargo will empower Turkish airline's air cargo movement worldwide and replace the legacy system.