India will become the world?s third-largest aviation market by 2020, says a report published by the Centre for Asia Pacific Aviation (CAPA) and Sita, an air transport IT specialist. Technology and innovative practices will play a key role in meeting growth challenges but the report finds that IT is not always considered a tool of strategic importance. To meet the demands of air transport in 2020, up to $2 billion needs to be spent on air traffic control and more than $1.5 billion on upgrading security.
The joint CAPA-Sita report on ‘Innovation and Technology: Opportunities for Transformation in Indian Aviation’ builds on a previous report produced in 2010. It provides an update on the IT landscape in India?s air transport industry and also highlights some of the challenges in deploying innovative technology across the industry. The report incorporates the perspectives of the key stakeholders and makes some predictions.
Indian aviation has undergone a sea change since 2000 when just one carrier flew overseas. Today, there are seven. Passenger traffic has increased from 42 million to 150 million and the country?s fleet has grown from 119 aircraft to 437. The low-cost sector has grown massively and now represents 70% of the market. The CAPA-Sita report predicts that by 2020, 452 million passengers will fly each year and the fleet will grow to 1,030. This will make India the world?s third-largest aviation market.
Indian aviation has seen financial turbulence in recent years, but investment is vital if the industry is to meet the challenges of growth. Total investment in the Indian air transport industry since 2000 is estimated at $27 billion and is expected to reach $120 billion by 2020, of which $80 billion will be spent on new aircraft.
According to the report, airline IT spend as a percentage of revenue ranges from 1-3% with 70% of those surveyed expecting their IT spend to increase. The key drivers for investment are operational efficiency; enhancing the customer experience; and cost reductions. Mobility is a key focus with 90% of respondents expecting to increase investment in this area.
?The huge growth in air traffic presents a number of challenges. To address these, investment in infrastructure and skills will be needed. Perhaps even more importantly, technological innovation will be required to bring efficiency and speed to the sector. The initiative by Sita and CAPA to prepare this report on the state of technology adoption and innovation in Indian aviation today, and the outlook for the future is appreciated and will be helpful for the Indian air transport industry,? said civil aviation secretary Nasim Zaidi.
?India is poised to emerge as the world?s third-largest aviation market by 2020. This level of growth is inevitably accompanied by significant challenges and innovation will play an important part in addressing these to support the growing demands of India?s aviation,? said Sita country director (India and subcontinent) Maneesh Jaikrishna.
?Sita has been a catalyst for innovation in the Indian air transport community for over 60 years. We have been instrumental in bringing new technology to India and today, we are involved in all aspects of air transport in the country. As the world?s leading specialist in air transport communications and IT solutions, we look forward to continuing to work with the Indian aviation community and the government to drive innovation during this exciting period of transformation and change,? added Jaikrishna.
Since the 2010 report, deployment of technology has been slow due to financial constraints but there has been increased deployment of key IT solutions including websites for sales; implementation of common use terminal equipment (Cute) in airports; common use self service (Cuss); baggage reconciliation systems; flight information display systems; and others. Over the next few years the report forecasts an increase in mobility solutions including mobile check-in; biometric identification systems; increasing use of the cloud and social media applications amongst other developments.
?Technology has the potential to become far more pervasive and to transform the operations of airlines, airports, service providers and border control,? said CAPA India CEO Kapil Kaul. The aviation industry can leverage technology not only to deliver functionality and cost efficiencies, but to drive enhanced passenger experiences, new commercial revenue streams and improved security. In this report we set out to understand whether India?s aviation industry is positioned to grasp these opportunities, and to present a road map for the future.