India’s aviation industry is projected to grow by 11% in the medium term, according to a recent report.
Ratings agency Icra released its findings, basing the rise on increasing disposable incomes and a willingness to spend on air travel.
Despite this, the report also found that the recent higher cost of travel and impact of economic slowdown have affected passenger traffic growth, which has grown at a Compound Annual Growth Rate (CAGR) of 9.2% over the last five years.
Furthermore, the report found that the overall operating envirnment for domestic carriers is showing an improving trend after the government’s decision to allow foreign airlines to invest up to 49% in private domestic carriers.
These factors, combined with a decline in industry-wide capacity and improvement in pricing discipline, have helped improve the operating performance of airlines, the report added.