India to become third largest aviation market by 2020
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India is well on its way to becoming the world’s third largest aviation market by 2020, according to the FICCI-KPMG ‘India Aviation Report 2016’, which was launched at the India Aviation event in Hyderabad this week.
With 81 million annual trips, India’s domestic aviation market grew at a rate of 20.3% during 2015, marking the world’s highest growth rate. Increasing disposable income, falling fuel prices and rising tourism have contributed to the growth. The Indian aviation industry is currently ranked ninth globally.
Harshavardhan Neotia, president of FICCI said; “Enormous growth in domestic passenger traffic, substantial strengthening through government initiatives, decrease in global crude oil prices and airlines showing profits indicates a significantly positive transformation for the Indian civil aviation market.”
The report highlights that the National Civil Aviation Policy (NCAP 2016) will provide a significant fillip to the industry. Effectively reviving and operationalising around 160 airports will improve air connectivity and broaden the domestic flyer base.
Amber Dubey, partner and India head of KPMG’s aerospace & defence division, sad; “The positive impact of NCAP 2016, rise in disposable incomes and the fall in ATF (jet fuel) prices are likely to help India leapfrog into the top three of the world. Growth of aviation and tourism can create a huge multiplier in terms of GDP growth and jobs.”
According to IATA, passenger traffic on international routes showed an increase of 6.5% in 2015 whereas in India it was 7.7%. Further the growth in the total passenger throughput for 2015-16 was 17.1% standing at 184m. Passenger traffic is expected to reach around 370m by 2020.
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