Government, CAPA differ over domestic air traffic growth forecast

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Mumbai | Updated: Feb 01, 2018 6:25 AM

A day after aviation consultancy firm CAPA pegged domestic air traffic growth between 18% and 20% for FY19, indicating crossing of the 150-million passenger mark, minister of state for civil aviation Jayant Sinha on Wednesday put that forecast at a more modest 15%.

ait traffic growth, domestic air traffic in india, india domestic air trafficCAPA, in its report released on Tuesday, said Indian carriers will add a record of 124-130 aircraft in FY2019.

A day after aviation consultancy firm CAPA pegged domestic air traffic growth between 18% and 20% for FY19, indicating crossing of the 150-million passenger mark, minister of state for civil aviation Jayant Sinha on Wednesday put that forecast at a more modest 15%. Sinha, who addressed the CAPA aviation summit in Mumbai via video conference, said while there is tremendous latent demand for aviation in India, two factors are going to determine what that translates into over the next few years. The first is how quickly airlines are able to add planes for expansion, and the second is availability of slots at major airports, including Delhi and Mumbai. While Delhi will soon have its fourth runway operational, Mumbai airport remains the single-biggest bottleneck as far as aviation is concerned. The minister said the Navi Mumbai airport will take four to five years to become operational and this will mean a wait to get that capacity added in the market. “If we add this picture of airports to fuel prices stability, then we are looking at a growth in the range of 15% as opposed to the forecast of 20%,” Sinha said.

“Even if we continue to grow at 15% with over 800 million passenger trips per year over 10 years, we should be able to reach a target of a billion trips per year,” Sinha said. The entire capacity building and processes of the Indian aviation ministry are targeted towards achieving billion trips a year over a horizon of 10-20 years, he said.

On the issue of bilateral negotiations with foreign governments, Sinha said international capacity is not constrained in India by a lack of negotiations over bilateral rights with other countries, but it is pulled down by constrained airport capacity and also bringing in of the wide-body aircraft by airlines. “Slots are an issue, not so much the bilaterals.”

CAPA, in its report released on Tuesday, said Indian carriers will add a record of 124-130 aircraft in FY2019.

With Indian budget carriers targeting low-cost, long-haul flights, Sinha said the Indian aviation market needs a model like Scoot and other long-haul budget airlines that can offer comfortable flights at competitive price points. There is a lot of unlocking to be done in that segment, he said. As India is a very price-sensitive market, if players offer flights to Europe and east Asia at the correct price points, the number of international passengers will sky-rocket.

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