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India: Flying on top gear

India: Flying on top gear

Ravi Capoor, Former CEO, IBEF

Mar 15, 2016 10:25 AM

The domestic air traffic in India has been on the rise topping global growth charts for the past many months now. For instance, the domestic market grew 22.9 per cent in January 2016, the highest among all countries, according to the recently released data from the International Air Transport Association (IATA). It is also important to note here that the Indian market also reported the highest capacity addition (21.9 per cent) and the highest load factor among all markets (84.7 per cent) on a year-on-year basis. In comparison to the overall 6.8 per cent growth in domestic air traffic on a global level, India has been able to outshine the global growth primarily because of a comparatively strong domestic economy and increase in air services.

The fact that the Indian market has been able to continue its growth run in 2016 is a positive sign for the domestic aviation industry. India's domestic air passenger traffic grew by a whopping 20.2 per cent YoY in 2015, helped by higher economic growth and increase in number of flights across domestic airlines network. The Indian market overtook both Australia and Japan during 2015 and is currently on par with Russia at around 1.2 per cent of global revenue. Industry experts believe that India will continue its growth run in the remaining months in 2016. According to a recent IATA forecast, India is going to be the third largest aviation market in the world within 10 years.

With strong growth potential and policy-level changes expected in the coming months, the Indian aviation industry is expected to further raise the bar for the global aviation industry in coming months.

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