TRENDS| Indian aviation poised for further leap

The demand for air travel is growing in India as a result of economic development, globalisation, regulatory liberalisation and declining passenger fares.

An aviation analyst at Prabhudas Lilladher expects air travel to grow at a compound annual growth rate (CAGR) of 16 per cent over the next four years until FY10. This growth in passenger traffic will drive far larger growth of 20 per cent in airline revenues.



The Indian aviation is growing at a fast pace and is poised for a further leap, with large airports modernisation efforts under way.
Currently, profitability is constrained heavily by costs thrust on the industry due to the inadequate infrastructure support.
While the airline industry is currently making losses, analysts expect a turnaround for the industry with the onset of rational pricing.
The move by a large number of international operators to offer improved connectivity to Indian cities opens up opportunities in the feeder segment.
Put simply, international flights discharge passengers at major hubs, who are thereafter flown by feeder airlines to smaller towns.
Rapid growth in the domestic passenger traffic has been quite remarkable with a clear contribution from low-cost carriers (LCCs). Of the total 9.48 million additional domestic passengers carried by local carriers from FY03 to FY06, 4.16 million (or 44 per cent) were carried by LCCs.
Business Standard