Thursday, August 24, 2017

Indian Aviation Sector Will Continue To Thrive In Price Conscious Market

The air transport sector in India has its own set of unique problems. First, thanks to grossly inadequate infrastructure and lack of affordability, the local market has not been fully tapped. This, in spite of its huge potential for growth with its wide geographical expanse, large population and higher mobility. Moreover, high operational cost and slow pace of policy reforms had made the business environment highly unviable for service providers. And, more importantly, monopoly of the state and the policy discrimination kept the private sector at bay for several years in the past even as the bureaucracy at Air India restrained its own growth.

However, if the vibrant growth that the sector has seen in the last decade — both in terms of the number of service players as well as passengers — is any indication, the recent economic progress and gradual change in the policy framework have started transforming the market, say industry analysts and experts.

International Air Transport Association (IATA) predicts that India will have 6 million aircraft movements and 300 million passenger departures by 2030, based on a Goldman Sachs economic projection for the country. However, India as a strongly price conscious market and a high-cost operational region for aviation, needs to develop a unique model to achieve the expected growth.

24/08/17 C H Unnikrishnan/Business World