Sunday, February 09, 2020

India's plan to build 100 new airports set to spur Gulf passenger, cargo growth

India has unveiled plans to construct 100 greenfield airports by 2024 to expand its air connectivity network within the country, aimed at boosting air passenger and cargo traffic on the international and domestic routes in the coming years, as well as triggering investment requirements running into billions of dollars.

The massive airport infrastructure expansion plans have led many aviation industry experts and analysts to predict a big jump in air passenger traffic in the international route, especially on the India-Gulf sector, the busiest and most sought after international route from India, leading to increased competition among airlines in this sector.

“India will be embarking on the next phase of growth in air travel, with the Union Budget 2020 announcing a massive expansion plan in the country’s airport infrastructure,” Dhiraj Mathur, aviation sector expert and former Partner, PwC India, told Arabian Business.

“Air passenger traffic in India has more than doubled in the last decade, and the coming decade could see even higher growth considering the recent trend of robust air passenger growth and outward tourism from India,” Mathur added.

India has seen five years of double digit growth in air passenger traffic till FY19. The growth rate, however, is expected to come down to about 4.5 percent in FY20, according to projections made by rating agency ICRA.

“FY20 is also expected to witness a muted domestic capacity growth of about 3 percent, as two of India’s budget carriers - Indigo and Go Air – need to resolve their engine issues and another one, SpiceJet, waits for clearance of the B737 Max aircraft,” the latest ICRA report on the aviation sector said.

“Many Indian airlines are focusing on expanding on the international routes now,” says Kinjal Shah, aviation sector analyst and vice president with ICRA, adding that the proposed airport expansion could give a further boost to this.
09/02/20 James Mathew/Arabian Business

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