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India to beat Japan to become third largest domestic aviation market globally

Times of India:  February 09, 2017

Mumbai: The Indian aviation market is likely to overtake Japan this year to become the world's third largest domestic market after US and China.

"The Indian domestic market is on track to surpass 100 million passengers in 2017," said Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA) in his address at the CAPA aviation meet on Wednesday.

In fact, domestic air traffic could grow by close to 25 percent in 2018 and approach 130 million passengers.

"In reaching this milestone, India will have achieved average domestic traffic growth of over 15 percent per annum since the liberalisation of the sector commenced in 2004," he said.

The reasons for the growth are primarily strong economic fundamentals, although traffic has been over-stimulated by low fares, Kapil Kaul said. The ramifications of the Indian government's demonetisation initiative announced in November last year is unclear but the introduction of the GST in the next fiscal year may possibly have a short term negative impact on economic growth for a couple of years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.