India has the potential to become the third-largest aviation market by 2020 and the largest by 2030 as there is a large untapped potential for growth due to the fact that access to aviation is still a dream for nearly 99.5% of its population, stated the FICCI-KPMG ‘India Aviation 2014-Enhancing Air Connectivity’ report released here on Thursday.
The Indian civil aviation industry is on a high-growth trajectory, albeit with minor hiccups. The sector has ushered in a new wave of expansion driven by low-cost carriers, modern airports, FDIs in domestic carriers, cutting edge IT interventions and a growing emphasis on no-frills airports and regional connectivity, the report said.
The Indian civil aviation industry is among the top 10 in the world with a size of around $16 billion, a fraction of what it can actually achieve. FICCI president Sidharth Birla said, “In view of the enormous growth prospects of air traffic and substantial investment projections, Indian aviation market offers significant long-term opportunities for global aviation players. The Indian government and industry are already working together closely to improve regional connectivity and promoting sustainable development of the civil aviation sector in the country.”
The next generation of aviation growth in India will be triggered by regional airports. At present, there are around 450 used/unused/abandoned airports and airstrips spread all over the country. Many Indian states, especially in Eastern India, have started taking pro-active measures to promote air connectivity, the report said.
There has been a significant growth in the Indian aviation sector over the last decade. As per data from the Airports Authority of India (AAI), passenger throughput grew to 159 million (FY 13) and cargo throughput to 2.19 million tonne (FY 13), registering an impressive growth of 13% and 10% CAGR, respectively, over the period FY 2003-2013.
On the global front, aircrafts transported around 3.1 billion passengers and over 51.6 million tonnes of freight in 2013. The growth in passenger traffic has been led by the strong progress made by West Asian countries and supported by other emerging economies of Latin America, Africa and Asia-Pacific. However, developed economies of North America and Europe lagged behind in terms of growth in passenger traffic. The Asia-Pacific region promises to emerge as the largest aviation market by 2032.