The impact on competition from the Gulf airlines has been a key concern for Indian carriers but as the market is expected to be very large by the financial year 2030, it can accommodate Indian as well as Middle Eastern carriers without strategic conflicts, CAPA Advisory said on Thursday. In a post-webinar presentation, CAPA Advisory projected that by 2029-30 India's international traffic is estimated to increase by 50-60 million annual passengers from pre-COVID levels to reach 115-125 million.
Hosted by CAPA, the webinar was on 'India-Middle East Aviation Dialogue: A Win-Win Outcome is Feasible and Likely'. It said more than 30 per cent of the country's international origin destination traffic is on long- and ultra-long haul routes. The domestic carriers are expected to add just around 70 wide-body planes by FY30, which is likely to address only half of the incremental long-haul demand, it added.
"However, the market will be very large and can accommodate Indian and Middle Eastern carriers without strategic conflicts. In fact, Indian carriers alone will not be able to meet projected demand. Such a scenario would constrain economic outcomes," CAPA said in the presentation.
It expects the air passenger traffic to double again by 2039-40 to around 240 million passengers and continue to grow. There are reasons to be bullish about the prospects for Indian carriers to expand and compete more aggressively on international routes, for example Air India privatisation, large fleet of long haul narrow-bodies, and possible revival of Jet.
But, supply will still remain short of demand, even based on conservative estimates, it added. Given the positive and strengthening outlook for Indian carriers, "we believe that win-win co-existence is feasible and likely. But, Middle Eastern markets must recognise that they will have to clearly spell out and tangibly demonstrate the benefits that they can bring to India's economy and tourism industry", it stated.
In particular, as Air India's financials deteriorated, the bilateral regime became more inward looking, CAPA said. "Broader strategic cooperation will be the pivot around which a more liberal approach may be seen.
"We recommend that stakeholders, of the likes of AACO (Arab Air Carriers Organization), the regional association of Arab airlines, could take the lead in defining a new approach based on shared interests, focusing on complementarity rather than conflict," it stated.
27/08/21 BusinessToday.in
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