Lack of infra, ATF prices acting as drags
Looking at the 18-20% growth in passenger traffic in 2010 and domestic travel growing in double digits post-slowdown, the induction of capacity by airlines has not kept pace. As a result, peak demand season saw a reduction in supply, which led to huge fare hikes. This was compounded by the fact that a good number of aircraft are grounded instead of being used to increase capacity.
The basic challenges the Indian aviation industry is currently faced with are primarily infrastructure and aviation turbine fuel (ATF) prices.
The development and growth of any sector and economy is directly dependent on the growth of its infrastructure. Several airlines plan regional sub-units, but lack of developed airports is blocking the growth. Development of new airports faces hurdles such as acquiring adequate land at appropriate locations with good connectivity options. There is clearly a shortage of trained and skilled manpower in the sector as a consequence of which there is cut-throat competition for employees which, in turn, is driving wages to unsustainable levels.
There is a growing need to set up a comprehensive strategic education and training agenda for the national air transport sector. Airport infrastructure needs to be upgraded to world-class standards with priority to the busiest airports and those handling international flights. It is time to remove non-core activities from the aviation
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